’21 budget definition of ‘savings’ questioned

ASENIOR lawmaker on Sunday questioned the new definition of “savings” under the proposed 2021 P4.5-trillion national budget.

In a statement, Bayan Muna Rep. Carlos Isagani Zarate said the new definition of savings is like giving President Duterte a “blank cheque.”

“Savings under the above new

General Provisions [2021] of the national budget may be declared by the President as savings in case of a state of national security. This is a new provision,” Zarate said.

“What happens to the savings when there is no state of national emergency? What happened to the savings in the previous fiscal years? Essentially this gives a ‘blank cheque’ to President Duterte and he can almost do what he wants with the budget without the benefit of congressional debate or intervention,” he added.

If this is allowed in the GA A, Zarate said, Congress is practically relinquishing its power of the purse.

“It’s like just watch[ing] on the sidelines while the President does as he pleases and wants on the GA A. It erases the concept of separation of powers as well as checks and balances,” said Zarate.

Under the NEP submitted by the Department of Budget and

Management, the President of the Philippines, the President of the Senate of the Philippines, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, the Heads of the Civil Service Commission, the Commission on Elections, and the COA are hereby authorized to declare and use savings in their respective appropriations to augment actual deficiencies incurred for the current year in any item of

their respective appropriations.

It describes savings as portions or balances of any released appropriations in the proposed budget, which have not been obligated as a result of any of the following: completion, final discontinuance, or abandonment of a program, activity or project for which the appropriation is authorized; or implementation of measures resulting in improved systems and efficiencies and thus enabled an agency to meet and deliver the required or planned targets, programs and services approved in this proposal at a lesser cost. Allotments that were not obligated due to the fault of the agency concerned shall not be considered savings.

Also, the NEP said notwithstanding the foregoing, final discontinuance or abandonment of a program, activity or project, whether released or unreleased, allotments for which remain unobligated, may be declared by the President as savings in case of a declaration of a state of national calamity as may be necessary to augment deficient programs, activities or projects in the Executive department or special purpose funds that are necessary to immediately address the existing calamity.

Since 2016, Zarate said the government has had an excess of ten to hundreds of billions of pesos of funds.

“What is the reason for this? Is it the absorptive capacity of departments and agencies? If we are having problems with the spending capacity of our departments/agencies, why do we keep on increasing the level of our national budget?” he asked.

“Aside from the unreleased and unused portion of the budget, there are also yearly savings. So what is the reason for the yearly increase in the national budget that increases the yearly debt to the present unsustainable proportions?” he wanted to know.

According to Zarate, the DBM web site is replete with the concept of transparency and similar phrases such as “Fiscal openness,” “Promoting transparency,” and “citizen engagement,” and right to participate in governance.

“The DBM is responsible in the formulation and implementation of the national budget and preparation of the Expenditure Program of the government. But is it really open and transparent?” he asked.

In the government’s response to the Covid-19 pandemic, Zarate said a huge bulk of the fund came from the 2019 savings.

“The public only came to know about the 2019 savings when the government was obliged to report the sources of funding for the Covid19 response. If there are savings in 2019, why did the DBM, then, omit the information on the overall savings in the Budget Books from 2016-2019? Is it not contrary to the government’s fiscal transparency?”

For his part, Budget Secretary Wendel Avisado told lawmakers last Friday that the savings provision in the NEP is a similar to the provision of the Bayanihan Law, in the event that a national emergency happens.

Under the Bayanihan law, the Chief Executive has the power to “reallocate and reprogram” funds in the P4.1-trillion 2020 national budget and use the money for combatting Covid-19.