Congress proposes: Gov’t savings not only at yearend | Inquirer News

Congress proposes: Gov’t savings not only at yearend

MANILA, Philippines–Responding to President Aquino’s request that Congress clarify the definition of savings, two administration allies are proposing that savings be declared in the first half of the year or as early as the first quarter.

Sen. Francis Escudero said Thursday that Congress could declare savings in the middle of the year and still be compliant with the Supreme Court’s ruling that the Disbursement Acceleration Program (DAP) was unconstitutional.


In the House of Representatives, Eastern Samar Rep. Ben Evardone filed House Bill No. 4770 that seeks to ensure the maximum use of the national budget by allowing “quarterly augmentation, realignment or utilization of savings, or at any time once savings are clearly determined even prior to the end of the fiscal year.”

Escudero, chair of the Senate finance committee, said one form of savings that would comply with the high court’s ruling on the DAP was the difference between the bid price and contract price of a government project.


“We can declare that as savings and that would still be compliant with the Supreme Court ruling, and we don’t even need to pass a joint resolution,” he told reporters in a phone interview.

Escudero cited the case of the Department of Public Works and Highways, which conducts preaward bidding of next year’s projects as early as this year, so that by January next year, it knows the difference between the bid price and contract price.

If the savings are realized as early as January next year, there’s no reason for the government to wait for yearend to declare these as savings, he said.

“If we expressly allow it under certain conditions, that can be done,” he said on the phone.

Supplemental budget

In his State of the Nation Address, President Aquino asked Congress to pass a supplemental budget to fund projects that would otherwise be suspended because of the Supreme Court’s adverse ruling on the DAP.

Aquino also asked Congress to pass a joint resolution clarifying definitions of savings that were still being debated as a result of the court ruling.


In voiding the DAP, Supreme Court justices struck down the executive branch’s practices of declaring savings from unreleased appropriations and using unprogrammed or standby appropriations.

They ruled that savings and standby appropriations could be declared only at the end of the fiscal year.

Congress’ prerogative

Senate President Franklin Drilon and Speaker Feliciano Belmonte Jr. agreed with Malacañang that Congress had the prerogative to revise the definition of savings.

Drilon said savings could be redefined to an extent that these could be declared before yearend.

Escudero said Congress could revise the definition of savings through a joint resolution, a new law, or the General Appropriations Act (GAA) itself.

This early, Sen. Nancy Binay aired her objection to a plan to declare savings before yearend, arguing that the government shouldn’t fund a project that it was not sure of implementing in the end.

She threatened to file a bill holding government officials accountable for discontinuing a project so savings could be realized.

“As much as possible we should avoid that window that could be abused,” she told reporters at a press forum.

To address this, Congress could put in a provision in the GAA requiring the executive branch to submit a supplemental budget so it could use the allocation for a discontinued project, Escudero said.

“Again, as I said, we will be compliant with the SC decision on the DAP,” he said.

In the House, Evardone’s bill seeks to create a much more potent version of the DAP, which declared savings midyear but without the features ruled unconstitutional by the Supreme Court due to  cross-border transfer of funds and spending on items outside of projects approved by Congress.

Evardone, spokesman of the Liberal Party, said no cross-border fund augmentation, realignment, transfer and utilization would be allowed.

While the DAP was based solely on the decision of the budget secretary with authorization by the President, the bill would authorize the

President, the Senate President, House Speaker, Chief Justice, all heads of constitutional commissions and the Ombudsman to declare savings within their respective offices.

This juggling of funds could be done on a quarterly basis or at any time within six months from the time the savings arose or were declared.

Slow implementation

“The slow implementation of programs and projects encourages inefficiency and thus is a great disservice to the taxpaying nation. Yearend augmentation from savings may have already killed the [goose] that laid the golden eggs,” Evardone said.

Evardone’s bill defines savings as “available balances or portions thereof of any programmed appropriation in an Appropriations Act free from any obligation or encumbrance arising or declared as such at any time within the current year of appropriation.”

It also identifies the circumstances in which savings may arise, such as after the completion of a program, activity or project for which appropriation is authorized, or from unpaid compensation and related costs pertaining to vacant positions, and leaves of absence without pay.

But Bayan Muna Rep. Neri Colmenares balked at Aquino’s redefinition of savings that he feared would entrench the President’s desire to usurp the power of Congress to appropriate government funds.

Act of defiance

“This new definition will unduly delegate to the President the power to reappropriate a budget in the middle of a fiscal year. President Aquino is insisting that his unconstitutional acts be entrenched in the national budget. That is an act of defiance against the Supreme Court ruling,” Colmenares said.

“With the lump sums in the proposed budget and President Aquino’s command to Congress to change the definition of savings, he wants to legalize the unconstitutional Disbursement Acceleration Program and insert it in the budget. Pork barrel is defined as a public fund where the selection of projects and beneficiaries rests on one official while a lump sum is a pork barrel because only the President selects the projects and beneficiaries,” he added.

Future plunderous president

Deputy Speaker Giorgidi Aggabao expressed concern that Malacañang’s proposal that Congress pass a stand-alone law defining savings might lead to its exploitation by “a future plunderous president.”

“Rather than a joint resolution, or a stand-alone law defining savings, I propose that the definition be embodied in the yearly GAA. If so embodied, not only would it have the solemnity of a law; it would have the additional benefit of flexibility,” Aggabao said.

Aggabao, a representative of Isabela province, said the definition of savings would be reviewed yearly as its definition in the GAA would have no bearing on succeeding GAAs.

“My apprehension is this: if savings is defined by resolution or by a specific law, there might be a character of permanence to it which a future plunderous president may exploit,” he said.

But Speaker Belmonte did not agree, saying a stand-alone law with more permanence would be preferable. “Stand alone is of course better. It has a long-term effect and will soon win universal acceptance by all organs of government,” he said.


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TAGS: Congress, definition of savings, Disbursement Acceleration Program (DAP), Government, Philippines, savings
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