WATCH OUT: P317.5B in special purpose funds, other lump-sum items in 2013 national budget

By: InterAksyon.com
September 16, 2012 9:17 AM

InterAksyon.com
The online news portal of TV5

MANILA - Social Watch Philippines (SWP) and Alternative Budget Initiative (ABI) noted that the 2013 national budget under discussion in both Houses of Congress includes P317.5 billion in Special Purpose Funds (SPFs) and P117.5 billion in unprogrammed funds vulnerable to "distortion."

“SPFs should be continually subject to open scrutiny by the House of Representatives and the Senate with media coverage and public participation before these are approved,” according to Social Watch Lead Convenor Prof. Leonor Magtolis Briones.

She explained that SPFs are lump sums which are included as part of the national budget. These are not as detailed and specific as the budget proposals of regular agencies. Once these are approved, they are vulnerable to reductions, transfers and “adjustments” since these are lump sums.

For 2013, P317.5 billion has been proposed as SPFs, along with P117.5 billion as unprogrammed funds. The biggest items are Budgetary Support to Government Corporations for P70.8 billion, Allocation to Local Government Units for P17.5 billion, Miscellaneous Personnel Benefits Fund for P70 billion, Retirement Benefits Fund for P70 billion, and Priority Social and Economic Projects Fund for P22.4 billion.

A claim has been made that only the P22.4 billion Priority Social and Economic Projects Fund are “true” SPFs. Social Watch pointed out that no less than the Department of Budget and Management has identified P317.5 billion as Special Purpose Funds in the National Expenditure Program for 2013.

SPFs tend to distort the budget as approved by Congress

In answer to queries on why SPFs tend to distort the approved budget, Prof. Briones gave this example: “DepEd has a proposed budget of P249.2 billion. This is then approved by Congress. Later, if P1 billion is added to DepEd from the SPF, the DepEd budget becomes higher than the Congress approved budget by P1 billion.”

Another example: “In 2011 DBM transferred a total of P8.001 billion from the Department of Agriculture, Office of the Secretary; Department of Agrarian Reform, Office of the Secretary; and from the Department of Health, Office of the Secretary to an SPF, Budgetary Support to Government Corporations. Thus the Congress-approved budgets of these three regular agencies were reduced when these transfers were made. There are other many examples of transfers from the Congress-approved budgets of regular agencies to SPFs."

"When done on a largescale basis, the risk of distortion is real,” she said.

Transparency for in SPFs and other lump-sum allocations

For decades, lump-sum appropriations have always been problematic because they are vulnerable to abuse, documentation is difficult, and accountability is hard to establish, Prof. Briones said.

“As early as 2006, Social Watch Philippines/Alternative Budget Initiative already warned about the growing size and magnitude of SPFs. In 2009, in an audit briefing to the Speaker of the House, the Commission on Audit already reported transfers from regular appropriations to SPFs without the required documentation. It warned that allotments exceeded appropriations for some SPFs totaling P2.61 billion. I was present when COA officials advised the House to abolish SPFs."

“The DBM is required by law to submit quarterly reports on the utilization of SPFs and Unprogrammed Funds. In its 2010 Annual Audit Report on the DBM, the Commission on Audit recommended that ‘DBM refrain from transferring appropriations from one lump-sum/Special Purpose Fund (SPF) to another or utilizing the appropriation of one Fund for purposes of another Fund, otherwise, the intentions of the appropriations law would be circumvented,'” Prof. Briones said.

Together, Social Watch and the Alternative Budget Initiative are composed of more than 100 civil society organizations monitoring the national budget.