Lawmakers: DBM can’t impound funds on its own

The Senate and the House of Representatives have made it harder for budget managers to “impound” or withhold funding for congressional insertions in the proposed 2021 appropriations law by requiring the President’s approval, among other conditions, according to the bicameral report on the budget.

One of the amendments approved by the two chambers last week was the addition of conditions that would prevent the Department of Budget and Management (DBM) from unilaterally declaring Congress-identified appropriations as “for later release (FLR),” a practice that senators and House members had denounced for essentially circumventing their exclusive power of the purse.

“At least there are parameters,” Sen. Panfilo Lacson said when asked to comment on the amendment to the general provisions of the General Appropriations Act (GAA) of 2021, which the two chambers ratified on Wednesday and is only awaiting the President’s signature.

Sen. Panfilo Lacson (Henzberg Austria/Senate PRIB)

Lacson was one of the lawmakers who called out the DBM for delaying the release of allocations that emanated from the House and the Senate, an act that was tantamount to impoundment under a cash-based system with only one year of validity of appropriations.

Practice not allowed

Impoundment refers to the refusal of the executive to spend funds appropriated by Congress for a particular purpose. The practice is not allowed under the 2020 GAA and previous budget years unless authorized by the DBM.

But the 2021 budget, as passed and ratified by Congress, would limit the scenarios when the DBM would be able to authorize impoundment of funds.

It added a restricting clause that would require any impoundment of funds to be “in accordance with the rules and regulations issued by the DBM” and “when there is unmanageable National Government deficit as determined by the Development Budget Coordination Committee (DBCC) and approved by the President.”

The provision reads: “No appropriations authorized under this Act shall be impounded unless in accordance with the rules and regulations issued by the DBM and when there is unmanageable National Government budget deficit as determined by the [DBCC] and approved by the President.”

The DBCC is chaired by the budget secretary with the National Economic and Development Authority director general, the executive secretary, the finance secretary and the Bangko Sentral ng Pilipinas governor as members.

Budget deficit

The Senate and the House also gave a specific definition for when the budget deficit could be considered unmanageable.

The phrase “as used in this section shall be construed to mean that the actual national government budget deficit has exceeded the quarterly budget deficit targets consistent with the full-year target deficit as indicated in the BESF (Budget of expenditures and Sources of Ffnancing) submitted by the President and approved by Congress pursuant to Section 22, Article 7 of the Constitution.”

Without basis

It would also apply if “there are clear economic indications of an impending occurrence of such condition,” according to the amendment.

During his interpellation on the budget, Lacson denounced the DBM’s FLR system and made a proposed amendment to “prohibit DBM from unilaterally impounding any of the funds appropriated in the GAA whether through FLR or any other nomenclature without sufficient basis or justification which should be clearly spelled out in a special provision.”

During House plenary budget deliberations, the DBM revealed that FLRs in 2020 amounted to P271 billion worth of budgetary items, of which only about half could be released within the year. INQ