Miriam Vs. Supplemental Budget

(Editor’s note: This has been derived from the Senate of the Philippines’ official website that was duly published and entered into the record of the Senate on 17 December 2014)

With a huge chunk of the 2014 budget still unspent, asking for a supplemental budget in late December is ridiculous. For the first three quarters of 2014, Congress has authorized the President to spend P1.730 trillion. By the end of the third quarter, he has spent only P1.456 trillion, thus underspending was a staggering P274 billion.

The total spending authority for 2014 is P2.3 trillion. The underspending continued in October and is expected to increase further. With so much money to spend, and so little time to do so, why is the President asking for a supplemental budget in late December?

What’s a special appropriations bill?

The proposed 2014 supplemental budget totaling P23 billion is in the nature of a special appropriations bill. The Philippine Constitution provides that “A special appropriations bill shall specify the purpose for which it is intended, and shall be supported by funds actually available as certified by the National Treasurer, or to be raised by a corresponding revenue proposal therein.”

A supplemental budget for 2014 is running against time. Today, December 17th, there are effectively only 4 working days in December, assuming December 26th and 29th are both declared non-working holidays. Congress will adjourn on Friday, December 19th.

It would require an express train on the part of both Houses of Congress to have this 2014 supplemental budget approved before December 19th. Congress would have approved a new spending authority worth P22.5 billion in less than a week of discussion.

Issues

The substantive issues related to the supplemental budget are staggering.

First, there has to be a clear justification for the special appropriations act.

Are the proposed spending items so urgent that they can’t wait another two weeks when a new budget will take effect?

Or is the supplemental budget meant to give President Aquino and Budget Secretary Abad a way out of the Supreme Court unanimous decision that some aspects of the Disbursement Acceleration Program (DAP) are unconstitutional?

The major items need to be disaggregated. By Secretary Abad’s admission some of the items in the supplemental budget are already contracted out and needs to be paid out of the P22.3-billion supplemental budget.

In my many years in government, I know that one cannot enter into any contract with a service provider or contractor without the spending authority issued by the Department of Budget and Management (DBM). Such spending authority emanates from the general appropriations act.

Hence, it is highly probable that the supplemental budget is meant to legitimize what the Supreme Court ruled as illegal? It would now appear that Secretary Abad is still trying to remedy what the Supreme Court ruled as illegal in its decision on the DAP. He appears to be asking Congress to legitimize his illegal acts, making members of Congress accomplices in the act of circumventing the Supreme Court decision on the DAP.

The supplemental budget is irregular. It talks of “obligations arising from implemented infrastructure projects.” Who approved the projects?

If the projects were in the GAA, there’s no reason why they can’t be implemented. If the projects were in the GAA, and it was not implemented or only partially implemented, it cannot be due to lack of funds.

The Aquino III administration has the resources to implement all the projects listed in the GAA. They have in fact underspent a lot of money. I estimate that from 2011 to the third quarter of 2014, the Aquino III administration underspent by P594 billion. There’s enough slack in the budget to fund a legitimately identified project.

The fact that the projects were not implemented or were only partially implemented suggests that there must be something wrong with the projects. Most likely, Congress did not authorize the projects in the first place. [This has to be clearly established].

Second, the National Treasurer’s certification of availability of funds should be valid.

The House, and separately the Senate, has to summon the National Treasurer to certify that the P23-billion special appropriations bill shall be supported by “funds actually available.”

One can rule out the possibility of raising the resources for the supplemental budget by passing new taxes since President Aquino is averse to raising new taxes.

Third, the supplemental budget bill as approved by the House requires the Senate’s amendment or concurrence.

What is the sense of urgency of the 2014 supplemental budget when the fiscal year is coming to a close and that a new budget is within a few days of signing? What specific items are being requested?

The budget secretary has to go beyond vague generalities. Have the required items not been adequately provided for in the 2014 budget? Is there redundancy in funding as alleged by some legislators? Is the certification of availability of funds by the National Treasurer valid?

If funds are available how come we continue to borrow money to finance government operations?

Special appropriations should be used sparingly

The passage of special appropriations act should be done sparingly. It is best done during extreme crisis, when the government has to step up public spending in order to avoid a major economic downturn. It is best done in times of grave natural calamities like a major earthquake or killer typhoons when the existing budget may be inadequate to finance urgent reconstruction work.

On the other hand, the passage of a special appropriations act is not justified when the Executive Department has shown gross inability to disburse what Congress has authorized it to spend. Incompetence should not be rewarded.

It would be a monumental mistake to use the supplemental budget to legitimize what clearly were illegal acts by some executive officials.

By going along with this dark scheme, legislators, who are supposed to make laws, become accomplices in undermining the rule of law.