Senators eye budget law provision to stop fund transfer practice in gov’t procurements

MANILA, Philippines — Senators are eyeing a provision under the 2022 General Appropriations Act (GAA) that would put an end to the practice of government agencies of transferring their funds to procurement bodies as well as inter-agency fund transfers.

During the budget hearing of the Department of Budget and Management (DBM), Senate Minority Leader Franklin Drilon lamented the practice of agencies in transferring their funds to other agencies or to the Procurement Service-DBM (PS-DBM) and the Philippine International Trading Corp. (PITC).

“That system does not help our economy because the funds are not actually utilized, is that correct?” Drilon asked.

DBM officer-in-charge Tina Marie Canda agreed with Drilon.

“We can probably rectify it is in the next couple of years, similar to the Bayanihan law. It was provided that transfers of funds would ultimately mean reversion if at the end of the year it has not been utilized,” she told senators.

“It is a good practice and it is in connection with the Executive Order No. 91 on cash-based budgeting that if you don’t implement it without the period specified, you don’t try to get around a law and transfer it to another agency and consider it already assigned,” she added.

Drilon asked if Canda would be able to submit to the Senate finance committee a proposed provision to that effect.

“Can [you] suggest any special provision that can stop this practice because this is, as a practice, prevents the budget from being an instrument to move forward projects and to contribute to our gross domestic product because the budgets are not actually utilized,” the minority leader said.

Canda said she will comply.

Finance committee chairman Senator Sonny Angara agreed with Drilon on the crafting of a provision.

“I’d like to clarify the provision…a sort of Bayanihan type provision that would provide that if you have not used these funds by a certain date they will revert to the national government so they cannot stay there indefinitely or fester or rot in a particular department?” he asked.

The DBM official answered in the affirmative.

“We’ll work with you and Senator Drilon and the other senators to craft that provision,” Angara went on.

The senators raised this issue on fund transfers after the Technical Education and Skills Development Authority (TESDA) was recently quizzed Monday over the low utilization of its 2021 budget.

Drilon, during TESDA’s budget hearing on Monday, pointed out that merely transferring money to regional offices does not mean fund usage.

READ: Villar, Drilon to gov’t agencies: Why are you so in love with PITC?

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