Malacañang: President’s Social Fund not pork

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For the nth time, Malacañang on Tuesday told its critics to stop treating the Presidential Social Fund (PSF), which is considered as one of the funds lumped together under the Special Purpose Fund (SPF), as President Aquino’s pork barrel.

The PSF cannot be scrapped because it is not part of the annual national budget but is mainly funded by revenues from state-owned Philippine Amusement and Gaming Corp. (Pagcor), said deputy Malacañang spokesperson Abigail Valte.

The other lump sum funds under the SPF are the calamity fund, the contingency fund, and miscellaneous personnel benefits fund.

“(These are) not pork barrel. The pork barrel is the layman’s term for what you refer to as the Priority Development Assistance Fund (PDAF),” Valte said.

The amount that goes into the PSF varies because, unlike other programs in the executive’s budget, it is not sourced from revenues of the Bureau of Internal Revenue or the Bureau of Customs, Valte explained at a briefing in the Palace.

Trust fund

“It’s essentially a trust fund. We don’t propose an amount for the Presidential Social Fund every year. That fund is supported and replenished by a percentage of the profits from Pagcor and … a small percentage from PCSO (Philippine Charity Sweepstakes Office),” said Valte.

As of December 2012, funds from Pagcor alone amounted to P5.256 billion. The Commission on Audit (COA) describes these as PSF’s “net income share from Pagcor.” If the amount is not fully consumed within the year, it is rolled over to the next year.

“So this is a continuing (fund). It’s really a trust fund,” Valte said, stressing that the Aquino administration had been judiciously using PSF.

“We have a clear idea of where it should go, and every year it’s being audited (by) COA. Just to give you a general idea of how the audit process goes—at least from the point of view of an agency or a particular department—all the receipts, supporting documents for liquidation, vouchers, disbursement requests are submitted to COA. Then COA will look into how (PSF) is being spent, and if it’s being booked properly,” she said.

‘Unforeseen events’

“At the end of the calendar year, the observations are all summarized in the annual audit report, or the AAR, that COA posts and uploads as soon as they finished it. So we invite everybody to look at these COA reports to familiarize yourselves with its contents. And additionally, if you go to the website of the Department of Budget and Management, it’s all there (in) what you call Statement of Allocations, Obligations and Balances,” she said.

The DBM postings are updated every quarter, she said.

Former National Treasurer Leonor Briones has claimed that the PDAF is part of the P310-billion SPF of the President, but Valte disagreed, saying that the SPF “are funds, by their nature, that can’t be itemized” in the budget because they are being used for “unforeseen events.”

“So, by the very nature of some of these funds, it is obviously something to draw (from) in times of need,” Valte said. “And also, if I can point out, these funds are audited (by) the Commission on Audit. You know, to call it completely discretionary is a little bit too general because special purpose funds have specific uses,” she added.

Aquino himself said on Friday, when he announced the scrapping of PDAF, that the executive still needed lump sum funds to prepare for contingencies as a result of storms, earthquakes and other natural disasters.

Contigency funds

“I, in principle, view this as a good idea,” Aquino said. Citing the utilization of the calamity fund, however, he quickly asked: “How can you itemize at the beginning of the year the expenses to be funded by the calamity fund when a storm has yet to hit (the country)?”

This is also the case when it comes to government’s response to and rehabilitation efforts for communities devastated by quakes and other calamities, he said.

Aquino explained further that the contingency fund—as the name implies—is used for expenses that could not be programmed in the General Appropriations Act such as the hiring of new teachers and state employees.

“So by their very nature, there are certain funds that can’t be itemized. But, to a large degree, we really want the budget to be transparent and easy to understand, so that when people (check for these specific projects, they will know) where every peso coming from the national treasury was spent,” said Mr. Aquino, referring to “roads, bridges, schools, etc.”

General label

As explained by Budget Secretary Florencio Abad on Saturday, the PSF is “an off-budget item,” Valte said.

“Meaning, the funds (are) not from the tax collections … but from (other sources) because of certain laws, or a PD (Presidential Decree) … that created Pagcor,” she said. “It’s a general label for these (special purpose) funds,” she said.

The miscellaneous personnel benefits fund, for its part, goes to retirement benefits and gratuities of retiring state workers because the government cannot predict the number of personnel who are going to retire the succeeding year.

The law allows early retirement or mandatory retirement, thus government “can’t exactly program that year-per-year,” she said.

This fund also bankrolls the expenses of newly created offices or units under a government agency.

Originally posted: 9:13 pm | Tuesday, August 27th, 2013

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