Senate panel crafts budget provision to ‘sweep’ unspent fund transfers to PS-DBM

The Senate building at the GSIS Complex in Pasay City. (Photo by LYN RILLON / Philippine Daily Inquirer)

MANILA, Philippines — The Senate finance panel has introduced a special provision under the proposed 2022 General Appropriations Act (GAA) that would revert to the treasury funds lodged with the Procurement Service of the Department of Budget and Management (PS-DBM) if it remains unspent by the end of 2023.

“We have a special provision regarding the PS-DBM. That’s also one of the things commented on by the members. Yung parang ‘sweep provision’ siya [It’s like a sweep provision’],” Angara told reporters in an online interview Tuesday.

“Fund sweep siya [It’s a fund sweep]. Meaning, all the funds with PS-DBM, ‘pag hindi nila nagastos by the end of 2023, ibabalik na sa national government yun [if they are unspent, the funds will be reverted to the national government],” he added.

Angara said the provision aims to prevent instances wherein funds transferred by different agencies to the PS-DBM for the procurement of items will remain unspent for several years.

“Hindi na mauulit yung nakikita natin na eight years na pala nandoon yung pondo hindi pa nabi-bid yung project…’Di na pwedeng mangyari. May deadline sila. Basically, finished or not finished, pass your paper na yon,” the senator said.

(We will prevent instances that we’ve seen that funds are sleeping for eight years without the project being bidded out…This should no longer happen. They will have a deadline to comply with. Basically, it’s finished or not, pass your paper.)

Why 2023?

If passed into law, the 2022 GAA will be effective until Dec. 31, 2022.

But agencies, according to Angara, will be given one more year to make payments for the projects it bidded out.

“We’re giving them additional time to pay, na ma-disburse yun [to disburse the funds],” he added.

“They [agencies] will lose the funds [if they don’t meet the deadline], so yun ang penalty nila. Hindi nila magagamit yung pondo,” Angara also said.

(They will lose the funds. That’s their penalty. They can no longer use the funds.)

‘False sense of security’

The provision seeks to avoid the issue of agencies parking funds under the PS-DBM, said Angara.

“Ang feeling kasi ng agency once nalipat na niya sa PS-DBM, naobliga na niya, when the truth is hindi. It’s a false sense of security na parang ‘nagawa ko na yung trabaho ko’ pero sa totoo hindi e. Hindi mo na-bid out,” he pointed out.

(Agencies feel that once they transfer the funds to the PS-DBM, it means that they’ve obligated it already, when the truth is it is not the case. It’s a false sense of security that ‘I’ve already done my job’ but it’s not.)

“And it’s not good na natutulog yung pera kasi ang daming pangangailangan, dapat gastusin kaagad yon,” he added.

(And it’s not good that the funds are sleeping when we have so many need for it, it should be spent right away.)

PITC, too

Angara was also asked if the fund transfers to the Philippine International Trading Corp. (PITC) will also be covered by the special provision.

“We can do that for PITC also. Sama namin [We can include that],” the senator said in response.

The finance committee’s report on the budget is expected to reach the Senate floor on Tuesday.

Once the plenary deliberations in the upper chamber are finished, the Senate and the House of Representatives will then hold a bicameral conference committee to reconcile disagreeing provisions of their respective versions of the 2022 GAA.

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