ON THE 2015 BUDGETRep. Antonio L. Tinio

Party-List, ACT Teachers

The DAP DecisionAraullo v. Aquino, G.R. No. 209287

LEGITIMIZING DAPRedefinition of Savings

2014 GAASection 65. Use of Savings. The President of the Philippines, the Senate President, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the Heads of Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to use savings in their respective appropriations to augment actual deficiencies incurred for the current year in any item of their respective appropriations.

2015 GABSection 66. Use of Savings. Insertion of “An item of appropriation shall pertain to a program, activity or project authorized in this Act” in the last sentence and the following as last paragraph:“The foregoing constitutional officers authorized to use savings shall be responsible for ensuring that an annual report on their respective use of savings shall be submitted to the Senate Committee on Finance and the House Committee on Appropriations, copy furnished the DBM. The report shall indicate, among others, the amount of savings generated, the sources and grounds used therefor, and the existing program, activity or project in their respective appropriations augmented. They shall likewise ensure that said reports are posted on their respective official websites.”

2014 GAASection 66. Meaning of Savings and Augmentation. Savings refer to portions or balances of any programmed appropriations in this Act free from any obligation or encumbrance which are: (i) still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized; (ii) from appropriation balances arising from unpaid compensation and related costs pertaining to vacant positions and leaves of absence without pay; and (iii) from apprpriation balances realized from the implementation of measures resulting in improved systems and efficiencies and thus enabled agencies to meet and deliver the required or planned targets, programs and services approved in this Act at a lesser cost.

Augmentation implies the existence in this Act of a program, activity, or project with an appropriation, which upon implementation or subsequent evaluation of needed resources, is determined to be deficient. In no case shall a non-existent program, activity, or project, be funded by augmentation from savings or by the use of appropriations otherwise authorized in this Act.

2015 GABSection 67. Meaning of Savings and Augmentation. Savings refer to portions or balances of any programmed appropriations in this act which have not been released or obligated as a result of any of the following:(a) Discontinuance or abandonment of the program, activity of project (P/A/P) for justifiable causes, at any time during the validity of the appropriations;(b) Non-commencement of the P/A/P for which the appropriations is authorized within the first semester of FY 2015, unless the implementing agency shows that the P/A/P may still be undertaken or accomplished in FY 2015. For this purpose, non-commencement shall refer to the inability of the agency or its duly authorized procurement agent to obligate an allotment within the first semester of FY 2015; or(c) Decreased cost resulting from improved efficiency during the implementation or after the completion by agencies of their P/A/Ps to deliver the targets and services approved in this Act.Savings may likewise refer to available balances of appropriations arising from unused compensation and related costs pertaining to: (i) unfilled, vacant or abolished positions; (ii) non-entitlement to allowance and benefits; and (iii) leaves of absence without pay.

2015 GABSection 67 (?). Meaning of Savings and Augmentation. (cont’d)

Augmentation is the act of filling up a deficiency in any existing P/A/P of an agency or office from savings in other items of said agency or office’s appropriations. A deficiency in a P/A/P may result from:

(a) Unforeseen modifications or adjustments in the P/A/P; or

(b) Re-assessment in the use, prioritization and/or distribution of resources:

PROVIDED, That the particulars of the expenditures to be funded from savings are within the scope of the P/A/P. In no case shall a non-existent P/A/P be funded by augmentation from savings or by the use of an appropriations otherwise authorized in this Act. The existence of a P/A/P regardless of the availability of allotment class/es is sufficient for the purpose of augmentation. The allotment classes referred to herein may either be Personnel Services, MOOE or Capital Outlays.

2014 GAASection 67. Priority in the Use of Savings. In the use of savings, priority shall be given to the augmentation of the amounts set aside for the payment of compensation, year-end bonus and cash gift, retirement gratuity, terminal leave benefits, old-age pension of veterans and other personnel benefits authorized by law, and those expenditure items authorized in agency special provisions and in other sections of the General Provisions in this Act.

2015 GABSection 68. Priority in the Use of Savings. Insertion of “and in this Act, as well as the implementation of priority programs, activities or projects covered in this Act” in the last sentence.

LEGITIMIZING DAPRedefinition of Realignment

2014 GAASection 68. Rules in the Realignment of Savings. Departments, bureaus and offices of the National Government, including SUCs are authorized to augment any item of expenditure within Personnel Services and MOOE, except for the following:

(a) Intelligence funds which require prior approval from the President of the Philippines; and

(b) Payment of Magna Carta benefits authorized under Section 49 hereof which shall require prior approval of the DBM. Realignment of savings by the foregoing agencies from one allotment class to another, and among objects of expenditure within Capital Outlays shall require prior approval of the DBM: PROVIDED, That realignment of savings from Capital Outlays may only be undertaken not later that the third quarter of the current year.

Implementation of this provision shall be subject to guidelines issued by the DBM.

2015 GABSection 69. Rules in the Realignment of Allotment Classes and Reprioritization of Items of Appropriations. The general rule is that agencies and offices must spend what is programmed in their appropriations in this Act. Therefore, any request to realign or to reprioritize is an exception to the rule and must be strictly construed against the agency or office requesting it. The exception may be allowed in the following instances:

(a) The respective heads of agencies in the Executive branch, including SUCs are authorized to realign any object of expenditure e.g., Salaries and Wages, Travelling Expenses, or Investment Outlays, within an allotment class i.e, Personnel Services (PS), MOOE or Capital Outlays (CO) within the same program, activity or project (P/A/P) in their respective agency allocations, except for the following:

(i) Intelligence funds which require prior approval from the President of the Philippines; and Payment of Magna Carta benefits authorized under Section 49 hereof which shall require prior approval of the DBM.(ii) The realignment of object of expenditure within CO of agency allotments is allowed: PROVIDED, That the realignment is within the same P/A/P and may only be undertaken until the second quarter of the year.

2015 GABSection 69. Rules in the Realignment of Allotment Classes and Reprioritization of Items of Appropriations (cont’).

(b) Any realignment within the same P/A/P that will entail the reallocation of funds from one allotment class i.e., PS, MOOE or CO to another without augmentation of the amount appropriated for the said P/A/P, shall be subject to approval by the DBM: PROVIDED, That any realignment from CO to another allotment class may only be undertaken until the second quarter of the year.

(c) Reprioritization is the augmentation of a deficiency in an existing P/A/P that is subject to the provisions on savings and augmentation. In this instance, the approval of the President of the Philippines must be secured. The heads of the constitutional offices enjoying fiscal autonomy are likewise authorized to realign allotment classes and reprioritize items of appropriations within their respective offices, subject to the rules on savings and augmentation as well as to the pertinent budget execution guidelines issued by the DBM.

LEGITIMIZING DAPRealignment of Funds

DPWH Special Provision 18 (GAA 2011)Realignment of Funds. The Secretary of Public Works and Highways is authorized to approve realignment of allotment released from appropriations of the Department from one project/scope of work to another: PROVIDED, That the 1) realignment is within the same DPWH Implementing Unit and the same project category as the original project; ii) allotment released has not yet been obligated for the original project/scope of work: PROVIDED, FURTHER, That the Secretary of Public Works and Highways shall inform the DBM, in writing, of every such realignment within (5) calendar days from its approval and shall post the realignment on the DPWH website.

DPWH Special Provision 12 (GAA 2012)Realignment of Funds. The Secretary of Public Works and Highways is authorized to approve realignment of allotment released from appropriations of the Department from one project/scope of work to another: PROVIDED, That the 1) realignment is within the same DPWH Implementing Unit and the same project category as the original project; ii) allotment released has not yet been obligated for the original project/scope of work: PROVIDED, FURTHER, That the Secretary of Public Works and Highways shall inform the DBM, in writing, of every such realignment within (5) calendar days from its approval and shall post the realignment on the DPWH website.

In the realignment of funds, splitting of projects or deliberate creation of gaps to justify itemization of a single project shall in no case be allowed.

Implementation of this provision shall be subject toguidelines to be issued by the DPWH.

DPWH Special Provision 15 (GAA 2013)Realignment of Funds. The Secretary of Public Works and Highways is authorized to approve realignment of allotment released from appropriations of the Department from one project/scope of work to another: PROVIDED, That i) the realignment shall be made only once to another project/scope of work within the same project category as the original project and within the same DPWH Implementing Unit; and ii)the allotment released has not yet been obligated for the original project/scope of work: b) realignment of unutilized allotment from a project/scope of work that are: (i) still available after completion or final discontinuance or abandonment of the work, activity, or purpose for which the allotment is authorized; or (ii) realized from the implementation of measures resulting in improved systems and efficiencies allowing for lesser cost in project implementation: PROVIDED, that the realignment shall be made to an existing program, project, activity or project of the Department and within the same DPWH implementing unit. PROVIDED, FURTHER, That the Secretary of Public Works and Highways shall inform the DBM, in writing, of every such realignment within (5) calendar days from its approval and shall post the realignment on the DPWH website.

In the realignment of funds, splitting of projects or deliberate creation ofgaps to justify itemization of a single project shall in no case be allowed.Implementation of this provision shall be subject to guidelines tobe issued by the DPWH.

DPWH Special Provision 24 (GAA 2014)Realignment of Funds. The Secretary of Public Works and Highways is authorized to approve realignment of allotment released from appropriations of the Department from one project/scope of work to another: PROVIDED, That the realignment may only be undertaken once per project and not later than the third quarter of the current year: PROVIDED, FURTHER, That realignment is made to another project/scope of work within the same project category, as the original project and within the same DPWH Implementing Unit: PROVIDED, FURTHERMORE, That the allotment released has not been obligated for the original project/scope of work: PROVIDED, FINALLY, That in no case shall splitting of projects or deliberate creation of gaps to justify itemization of a single project shall in no case be allowed.

The DPWH shall inform the DBM, in writing, of every realignment within (5) calendar days from its approval. The Secretary of Public Works and Highways and the Agency’s web administrator or his/her equivalent shall be responsible for ensuring that such realignment is likewise posted on the official website of the DPWH within the same period.

Implementation of this provision shall be subject to guidelines to be issued by the DPWH.

DPWH Special Provision 25 (GAA 2014)Project Modification. The Secretary of Public Works and Highways is authorized to modify the details of the projects covered by allotment released from appropriations of the Department: PROVIDED, That the modification shall be within the same project category as the original project and within the same DPWH Implementing Unit: PROVIDED, FURTHERMORE, That the allotment released has not been obligated : PROVIDED, FINALLY, That in no case shall splitting of projects or deliberate creation of gaps to justify itemization of a single project be allowed.

For modifications in the project category and or DPWH Implementing Unit, the DPWH shall first secure approval by the DBM before implementation of the project.

The DPWH shall inform the DBM, in writing, of every modification within five (5) calendar days from its approval. The Secretary of Public Works and Highways and the Agency’s web administrator or his/her equivalent shall be responsible for ensuring that such realignment is likewise posted on the official website of the DPWH within the

same period.

HIDDEN CONGRESSIONAL PORK IN THE 2015 BUDGET

FORMAL AND INFORMAL PRACTICES OF PORK ARE UNCONSTITUTIONAL

“The Court hereby declares the 2013 PDAF Article as well as all other provisions of law which similarly allow legislators to wield any form of post-enactment authority in the implementation or enforcement of the budget, unrelated to congressional oversight, as violative of the separation of powers principle and thus unconstitutional. Corollary thereto, informal practices, through which legislators have effectively intruded into the proper phases of budget execution, must be deemed as acts of grave abuse of discretion amounting to lack or excess of jurisdiction and, hence, accorded the same unconstitutional treatment.

x x x“WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional violations discussed in this Decision, the Court hereby declares as UNCONSTITUTIONAL: x x x (d) all informalpractices of similar import and effect.”

- Belgica v. Ochoa, G.R. No. 208566 (19 November 2013)

AGENCY PROGRAMAMOUNT

(in ‘000 Pesos)

DOH Assistance to Indigent Patients - “for hospitalization and the grant of assistance to indigent and poor patients” (Special Provision 8)

3,193,950

DOLE Government Internship Program (GIP) and Tulong Panghanapbuhay sa Ating Disadvantaged Workers “TUPAD” Project - “for the payment of stipend of beneficiaries equivalent to seventy five percent (75%) of the existing minimum wage in the area” - “for the payment of wages of displaced workers resulting from weather and regulatory shocks and internal conflict during their short-term employment under the TUPAD Project” (SP 8)

1,022,000

TESDA Special Training for Employment Program - “for the conduct of community-based specialty training for employment” (SP 4)

1,022,000

Realignments from PDAF in the 2014 GAA

AGENCY PROGRAMAMOUNT

(in ‘000 Pesos)

DSWD Crisis Intervention Program - “to provide financial assistance to individuals and families in crisis situations” (SP 4)

4,090,000

DPWH Regional and Local Infrastructure Program - “for the construction and rehabilitation of the following local infrastructures: a.) Local Roads and Bridges; b.) Classrooms and Academic Buildings; c.) Multi-Purpose Buildings; and d.) Levels 2 and 3 Water Supply Systems” (SP 8)

7,309,494

CHED Scholarship Program - “for the grant of scholarship assistance to deserving students” (SP 3)

4,124,200

TOTAL HIDDEN PORK IN 2014 BUDGET P 20,761,644

Realignments from PDAF, 2014 GAA

Where are these programs in the 2015 NEP?

AGENCY PROGRAMAMOUNT

(in ‘000 Pesos)

DOH Assistance to Indigent Patients (Special Provision 8) 1,762,349 DOLE Government Internship Program (GIP) and Tulong

Panghanapbuhay sa Ating Disadvantaged Workers “TUPAD” Project (SP 2)

611,730

TESDA Special Training for Employment Program (SP 4) 543,350 DSWD Comprehensive and Integrated Delivery of Social

Services (page 645, NEP Volume IV)3,642,405

DPWH Local Infrastructure Program (SP 8) 18,369,350 CHED Tulong Dunong Program (SP 3) 1,471,042 SUCs Tulong Dunong Program 988,245

TOTAL HIDDEN PORK IN 2015 BUDGET P 27,388,471

Hidden Congressional Pork in 2015The amounts of hidden pork per agency decreased by up to 46.83%

…except DPWH’s, which more than doubled (increased by 105.31%)

…But the total hidden pork increased by 31.92%.

2014P20.76 billion

2015P27.38 billion

2014 GAA(in ‘000)

2015 NEP(in ‘000)

VARIANCE

DOH P 3,193,950 P 1,762,349 - 44.82%

DOLE 1,022,000 611,730 - 40.14%

TESDA 1,022,000 543,350 - 46.83%

DSWD 4,090,000 3,642,405 - 10.94%

CHED & SUCs 4,124,200 2,459,287 - 40.37%

DPWH 7,309,494 18,369,350 + 105.31%

P 20,761,644 P 27,388,471 + 31.92%

LUMP SUM PER SOLON, 2014 GAA

LUMP SUM PER SOLON,

2015 NEPDOH P 10.5 M P 6.08 MDOLE 3.5 M 2.11 MTESDA 3.5 M 1.87 MDSWD 14.0 M 12.56 MCHED & SUCs 14.0 M 8.48 MDPWH 25.2 M 63.34 M P 71.6 M P 94.443 M

Hidden pork for each solon under the 2015 budget amounts to

P94,443,003(67% for hard projects, 33% for soft projects)

PRESIDENTIAL PORKConcentration of Funds with the

Executive Branch

Lump Sum Funds have fattenedunder the Aquino administration

Budgetary Support to Government CorporationsYEAR #

identified GOCCs

AMOUNT

For identified GOCCs

For “Others”

2011 15 10.690 13,6062012 19 21.577 13.6062013 20 44.665 13.6062014 24 46.255 13.6062015 23 61.319 28.606

Allocation to Local Government Units—Local Government Support Fund

(formerly Financial Subsidy to Local Government Units)YEAR AMOUNT2011 0.200 B2012 0.200 B2013 0.200 B2014 0.405 B2015 2.989 B

Grew to nearly 15 times in five years

Lump Sum Funds have fattenedunder the Aquino administration

National Disaster Risk Reductionand Management Fund (Calamity Fund)

YEAR AMOUNT2011 5.00 B2012 7.50 B2013 7.50 B2014 13.00 B2015 14.00 B

Grew to nearly 3 times in five years

Lump Sum Funds have fattenedunder the Aquino administration

Miscellaneous Personnel Benefits Fund

YEAR AMOUNT(in Billions)

2005 P 2.3602006 8.7992007 6.8882008 41.0042009 27.5302010 74.167

2011 70.6582012 109.2972013 69.0892014 80.7142015 P 118.142

Bloated to 50 times compared to its level in 2005.

Lump Sum Funds have fattenedunder the Aquino administration

DAP was funded by MPBFA significant portion of DAP was sourced from MPBF—funds intended for salaries and benefits of government employees

P145.87 billion= about 62% of total funds pooled from DAP (P237.5 bilion)= covered the entire amount of DAP projects

reported by DBM (P144.3 billion)

2010 2011 2012 2013 TOTALMOOE P 17.75 P 11.80 P 12.60 P 4.10 P 46.25

CO 9.50 11.90 11.74 12.12 45.26PS 36.30 35.97 42.40 31.20 P145.87

Lump Sum Funds are appropriations under the President’s control

Budgetary Support to Government Corporations (P61.319 B), Special Provision 9

Allocations to LGUs (P2.989 B), Special Provision 1

NDRRM Fund (Calamity Fund) (P14 B), Special Provision 4

Contingent Fund (P2 B), Special Provision 1

E-Government Fund (P1 B), Special Provision 1

Miscellaneous Personnel Benefits Fund (P118.142 B), Special Provision 4

International Commitments Fund (P7.444 B), Special Provision 5

Pension and Gratuity Fund (P140.566 B), Special Provision 6

Rehabilitation and Reconstruction Program (P1 B), Special Provision 2

Pork padding pork:The DAP Experience

On the purported appropriations cover for the P40 billion given to Bangko Sentral ng Pilipinas for its capitalization (P30 billion from DAP, P10 billion from GAA):

SEN. RECTO. What was the appropriations cover nga pala for this 30 billion, just to set the record straight? MR. ABAD. The item that was augmented was Budgetary Support to GOCCs. x x xSEN. RECTO. Magkano iyong Budgetary Support to GOCCs in the programmed fund? MR. ABAD. Ang mga kasama kasi dito the subsidies we gave to NEA, to National Electrification Administration, to Philippine Fisheries Development Authority, Cultural Center x x xSEN. RECTO. Okay. Wala akong natatandaang may Central Bank doon. MR. ABAD. Mayroon ho sa dulo, iyong “others.” SEN. RECTO. Others? MR. ABAD. Oho, “and others.” Doon pumasok ho iyon.

Pork padding pork:Grassroots Participatory Budgeting Process

ALGU—LGSF will be paddedwith a total of P2,789,061,572 worth

of GPBP projectsExcerpt from Table A, Volume I of 2015 NEP: