Deputy Majority Leader and Valenzuela City Rep. Magtanggol Gunigundo has scored the BIR for practically abolishing the Bank Secrecy Act through Memorandum Circular 9-2014 issued on Feb. 11, 2014, which requires corporate and individual taxpayers to declare the income earned on their bank deposits and other investments in their tax returns. congress.gov.ph/
MANILA, Philippines—Another bill that may invite legal wrangling has been filed in the House of Representatives allowing national agencies and local government units to retain and make use of their savings for unprogrammed projects beyond the fiscal year instead of reverting such funds to the treasury.
Valenzuela Rep. Magtanggol Gunigundo proposed authorizing government agencies and LGU heads to retain savings from their Maintenance and Other Operating Expenses (MOOE) and Capital Outlay (CO) to “accelerate the disbursements for [government’s] intended programs.”
Under his proposed measure, such savings may be used, beyond the year they accrued, for “other unprogrammed capital outlay projects” such as acquisition at bargain prices of equipment that is not available all year round.
Gunigundo, a deputy majority leader, said House Bill 4787 would encourage austerity and provide budget flexibility in government, helping cut down red tape and corruption in the procurement process.
“This is an effective measure to reduce the budget deficit of the national government and likewise a good alternative for the national government to accelerate the disbursements for its intended programs,” he said.
He noted that there was neither incentive nor motivation for LGUs and government agencies to implement belt-tightening measures “since they have to return their savings to the national treasury or to the local treasury at the end of the fiscal year.”
But the bill appears to go against an earlier ruling by the Supreme Court declaring unconstitutional certain practices under the Disbursement Acceleration Program (DAP), a stimulus program launched by the Aquino administration in 2011.
In July, the high court struck down the government’s practice of withdrawing funds from implementing agencies and declaring them as savings before the end of the fiscal year.
The Supreme Court ruled that such savings should revert to the national treasury at the end of the fiscal year, a ruling that the executive branch appealed in its motion for reconsideration still pending before the high tribunal.
As a result of the high court’s ruling, calls have mounted in Congress to pass a new law redefining savings and how it may be used and realigned for other purposes.
Eastern Samar Ben Evardone earlier filed a bill that would allow the President and heads of the legislature and judiciary to “accelerate the disbursement of funds within their offices, and authorize theaugmentation from savings and its realignment.”
Under Evardone’s proposal, the President, the Senate President, Speaker of the House of Representatives, the Supreme Court Chief Justice, all heads of constitutional commissions, and the Ombudsman shall be allowed to use their respective savings on a quarterly basis or any time within six months from the time of its declaration.
Budget Secretary Florencio Abad also submitted to Speaker Feliciano Belmonte Jr. a draft bill redefining government savings and clarifying the rules on augmentation.
But no lawmaker has adopted Abad’s proposed measure, which is described as “curative and retroactive” in nature.
Evardone’s and Gunigundo’s bills are now pending in the House committee on appropriations chaired by Davao City Rep. Isidro Ungab.
Gunigundo’s bill defines savings as the “excess amount in the financial account of an agency for the appropriation year after spending for the intended and programmed projects.”
It provides that all heads of various LGUs and national government departments, bureaus, commissions and other agencies shall hereby be allowed to retain savings from the MOOE and CO beyond the fiscal year such savings had accrued.
“These savings may be used by the said government unit in funding unprogrammed CO projects, subject to post-audit,” he said.
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