Aquino administration to use unspent funds for rehabilitation of flood-hit areas
Senator Franklin Drilon
MANILA, Philippines — Foreign funding will play a significant role in jump-starting the P352-billion flood-control plan of the Department of Public Works and Highways (DPWH), according to Sen. Franklin Drilon, the Senate’s finance committee chairman.
The Department of Budget and Management (DBM) would also divert part of its “savings” from slow-spending agencies for the government’s massive rehabilitation of flood-ravaged cities and provinces, Budget Secretary Florencio Abad Jr.
Abad said he had obtained approval from President Aquino to mandate all government agencies to return their unspent funds from 2011 to the first half this year.
“Originally, we had plans to use these funds for roads to tourism zones, credit for agrarian reform beneficiaries, emergency employment, augmentation for local infrastructure projects. But with the relief and rehab needs due to the floods, we may have to redeploy some of these funds,” he said in a text message.
According to Drilon, countries like Japan and South Korea are “willing and able” to help the Philippines in developing infrastructure projects.
He said, however, that the development of those projects would not have immediate results despite the obvious urgency.
The DPWH has prepared a master plan for a comprehensive flood management system to protect Metro Manila and nearby provinces, which are quickly inundated during heavy rains. The plan includes 11 projects whose development will take up to 2035.
“We would need foreign funding and development assistance [funds] for these projects,” Drilon said in a radio interview on Sunday.
“As far as I know, some countries that want to help in terms of development assistance and concessional loans, including South Korea and Japan, two countries that are willing and able to lend us funds, are lined up,” he said in English and Filipino.
Japan has a long history of extending aid to the Philippines through its Official Development Assistance.
Recently, South Korea extended a $208-million loan to the Philippines for the construction of a dam in Iloilo province.
“There is constant proof that our neighbors are willing to lend loans for infrastructure projects of the DPWH,” Drilon said. “However, these are for long-term solutions. And it would take years for these projects to be completed.”
The repair of roads, bridges and dams damaged by last week’s floods would already use up the P500 million in quick response fund the government has allotted for such contingencies, Drilon said.
“It appears we need to augment this allocation because by the looks of it, it would not be enough,” he said. “The DPWH said that in Metro Manila alone, the P500 million would already be used up. And then there are the dikes in Pampanga that have also been damaged. That [ require] P300 million.”
Drilon said the quick response fund must at least be doubled for the government to adequately respond to the situation.
“At least P1 billion is needed,” he said.
Drilon said the DPWH’s P3 billion in savings could be tapped if necessary.
“The department has not used this amount because of reforms in the awarding of projects, because the bids (for infrastructure projects) are now lower so there would be adequate funds to repair those damaged,” he said. “But a long-term solution is still required.”
Also on Sunday, Sen. Francis Escudero, chairman of the Senate committee on the environment, said a portion of the government’s P12.2-billion flood control budget for 2012 should be spent for a “stepped-up” waste management campaign, especially in urban areas.
Statistics from the Environmental Management Bureau show that local governments in Metro Manila manage to collect only 73 percent of the 5,000 metric tons of waste generated daily. The remaining 27 percent end up in the waterways, including rivers, and vacant lots and spaces in the metropolis.
Escudero said tropical storm “Ondoy” in 2009, last week’s torrential monsoon rains and floods, and past natural calamities had taught us one very simple lesson that somehow we all had forgotten: trash we throw indiscriminately will find its way back to our homes.
“Obviously, we have not done a good job of managing our solid waste based on the amount of trash washed back on our doorsteps,” Escudero said. “It’s time to take our lessons to heart.”
Malacañang said it would ask for a P5.2-billion increase in the government’s flood-control budget. The amount would bring next year’s allocation to P17.5 billion.
For her part, Sen. Loren Legarda proposed that the President raise the People’s Survival Fund from P1 billion to P10 billion.
“It only needs to be signed by the President as Congress had already approved and transmitted the People’s Survival Fund to Malacañang for his signature,” Legarda, chair of the Senate climate change committee, said in a radio interview.
The senator assured that Mr. Aquino would not be committing an irregularity by increasing the survival fund.
Legarda added that if the government could ask Congress for a P40-billion conditional cash transfer in 2013 to benefit the poorest families across the country, “why not this sector that clearly suffered following the floods?”
If no additional funds can come from the annual General Appropriations Act, Legarda suggested that Malacañang tap foreign grants for relocation and housing of affected informal settlers.
The survival fund can also be used to finance the cleaning of “esteros,” building dikes and planting mangroves.
Legarda recalled that the DBM had indicated its willingness to release P3 billion instead of just P1 billion for the fund.
The budget department has yet to finalize its estimate of how much funds would be withdrawn from state agencies, but this is expected to reach tens of billions of pesos.
“We have not completed that assessment as many agencies appealed their situation, explaining that their projects were in various stages of procurement. … But we have identified clear savings from unfilled items and retirement funds,” Abad said.
Last month, Abad signed National Budget Circular No. 541 that ordered agencies to list down how much of their 2011 and 2012 budgets had not been used as of July 30.
The secretary has expressed concern that low spending would have an adverse impact on economic growth.
He said the slow spending could be attributed to the agencies’ lack of preparedness to implement projects or to their tendency to implement projects under a two-year window.
“For the first five months, the national government has not met its spending targets. In order to accelerate spending and sustain fiscal targets during the year, expenditure measures have to be implemented to optimize the utilization of available resources.
In the event that a measure is necessary to improve the operational efficiency of the government, the President is authorized to suspend or stop further use of funds allotted for any agency or expenditure authorized in the General Appropriations Act,” according to Abad’s circular.
The withdrawal of budget allocation would cover personal services, capital outlays, maintenance and other operating expenditures.
Exempted are constitutional offices, groups with fiscal autonomy, state universities and colleges, intelligence funds, foreign-assisted projects, special-purpose funds, quick-response funds, savings from travel, communication and transportation, and automatic appropriations.
Under the circular, the DBM has until the end of this quarter to realign these funds with the unused funds to be classified as the government’s general savings.
