Public should keep eye on government use of 'bloated' unprogrammed funds — budget expert

Cristina Chi - Philstar.com
Public should keep eye on government use of 'bloated' unprogrammed funds � budget expert
A homeless woman sleeps on the sidewalk of Mabini Street in downtown Cebu City. Mayor Michael Rama said he does not want to see them on the streets starting June 12, Independence Day.

MANILA, Philippines — The public must keep an eye on how the government will spend the unprogrammed appropriations it had “bloated” in the 2024 national budget, a budget expert cautioned on Tuesday, in light of recent proposals allowing the government to tap state firms’ revenues for unprogrammed funds.

With a whopping P450 billion added to unprogrammed funds during the closed-door meetings of the bicameral conference, the national budget had climbed to P6.2 trillion — above the P5.7 trillion ceiling outlined in the National Expenditure Program, said Zyza Suzara, executive director at iLead, a public finance think tank.

Unprogrammed appropriations are funds set aside for priority programs and projects that do not have allocated funds yet in the budget. These funds are a form of standby appropriations that are contingent upon the availability of additional revenues, such as windfall revenue collections or foreign loans.

“Because legislators who sat in the bicam had to make sure that there were guaranteed revenues to cover for the pork projects. And so they deprioritized some projects and put them in the unprogrammed appropriations, which doesn't have guaranteed funding,” Suzara said during an interview with ANC’s "Headstart."

Earlier, Senate Minority Leader Koko Pimentel and former Sen. Panfilo Lacson flagged the insertion as unconstitutional, with Pimentel noting that the additional P450 billion was not requested by the executive branch.

Pimentel also said that this is the second year that Congress had bloated the unprogrammed funds.

GOCC funds opened

Suzara said that what’s concerning about the bloated unprogrammed appropriations is a recent special provision proposed by the House of Representatives that includes the reserve funds of government-owned and controlled corporations (GOCCs) as a revenue source.

“This is very similar to the initial version of the Maharlika Investment Fund where Congress proposed that the treasury can basically sweep the cash of GOCCs,” Suzara said, referring to the initial proposal for the Maharlika Investment Fund to draw funds from GOCCs like the GSIS and SSS, which received widespread pushback.  

Current government rules only allow unprogrammed appropriations to come from three sources: new revenues, excess revenue collections or foreign loans.

House Bill 9513, which allows the use of GOCCs’ excess funds as a new source of unprogrammed appropriations, has been passed on final reading by the lower chamber and has yet to be tackled in the Senate.

Rep. Arlene Brosas (Gabriela Women's Party), who voted against the House measure, said that the move has "potential implications on social services and programs" and may only serve to "expand the pork barrel system."

In the execution of the 2024 budget, there is a possibility that this would be “exploited” as the special provision leaves the use of GOCCs’ excess funds to the president’s discretion, Suzara added. 

“Furthermore, aside from the financial health of GOCCs, their programs have beneficiaries too. If undisbursed funds are taken from them, then ultimately, beneficiaries may lose out,” Suzara added.

Suzara said that the public should demand information from agencies on how they plan to spend the unprogrammed funds and “where exactly the sources of financing come from.”

“Which GOCC funds will be sweeped by the treasury? Is that going to be PhilHealth? NHA? because there are some of the GOCCs that have very large unused or unutilized subsidies from the national government,” she added.

President Ferdinand Marcos Jr. signed the 2024 budget on Wednesday and described the spending plan as a “renewal of our annual social contract with taxpayers that what they have paid faithfully will be rebated to them in full.”

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