Philippines: Three reasons why the 2014 national budget is prone to misuse

Prof. Leonor Briones

In the Philippines, Social Watch Philippines monitors the MDG programs as implemented by the government. Its main advocacy is more government spending for health, education, agriculture, the environment, and for social protection for all. It has organized the Alternative Budget Initiative (ABI) which proposes alternative budgets for these MDG-related expenditures.

I am often interviewed on TV, radio and print. To avoid the risk of one-line comments being misinterpreted, misquoted, or taken out of context, allow me to speak and write for myself on at least three topics: the 2014 national budget, special purpose funds, pork barrel and related topics. 

I am the lead convenor of Social Watch Philippines, which belongs to an international network of civil society organizations that reports to the United Nations, monitors the implementation of the Millennium Development Goals, and conducts assessments of international issues related to poverty, unemployment, social protection, and the environment, among others. 

In the Philippines, Social Watch Philippines monitors the MDG programs as implemented by the government. Its main advocacy is more government spending for health, education, agriculture, the environment, and for social protection for all. It has organized the Alternative Budget Initiative (ABI) which proposes alternative budgets for these MDG-related expenditures. 

For the record, Social Watch does not accept financial assistance from the national government. On a personal level, even as a candidate for Kaakbay Partylist in the last elections, I have stated publicly that I favor the abolition of pork barrel. 

1) Special funds in the 2014 National Budget don't go through the same rigorous examination as those allotted for agencies and departments.

As a social development organization, Social Watch conducts briefings upon request. We have done this for senators, congressmen, civil society organizations, media, and the general public. We have already conducted several briefings based on public information from concerned government agencies. Our power point presentations are available to the public.

Our supposed public statements can be tested against our published documents. What are the vulnerabilities in the proposed 2014 budget? During the press briefing last year for the proposed 2013 budget, one member of the press angrily demanded, "why don't you say outright that the president is corrupt"? 

I answered as patiently as I could that at that time, the 2013 budget was not even appropriated, so I could not make any claims of corruption. I could only talk of vulnerabilities.

This is the very word I use in all my power point presentations and briefings. 

The National Expenditure Program (NEP) proposes "a total national expenditure program of P 2.268 trillion" composed of the following:  

New General Appropriations: P 1,611,874,584;
Automatic Appropriations: P 796,029,175
Total Available Appropriations: P 2,407,903,759
Less: Unprogrammed Funds: P 139,903,759

Total Expenditure Program: P 2,268,000.000 

The NEP further clarifies that the New General Appropriations is composed of P 1,161,922,924 in department and agency budgets plus Special Purpose Funds of P 449,951,660. 

In turn, the Special Purpose Funds (see No. 2) is composed of Programmed Funds of P 310, 047,901 and unprogrammed funds of P 139,903,759. Thus, NEP states that the New General Appropriations is P 1.612 trillion as shown above.

Clearly, this amount includes unprogrammed funds of P 139.9 billion. 

On the other hand, Section 1 of the draft General Appropriations Act clearly appropriates only P 1,471,970,825,000 and does not include the unprogrammed funds. 

QUESTION: Does this mean that if and when the provisions for the expenditure of unprogrammed funds are fulfilled, these will have to be appropriated since these are not included in the draft General Appropriations Act? Which is the correct number for the "New General Appropriations"? P 1.612 trillion as claimed by NEP or P 1.472 trillion as provided for in the draft General Appropriations Act?  


It will be recalled that the past administration availed of unprogrammed funds when the special purpose funds were not sufficient. 

A) While the budgets of the departments and agencies amounting to P 1.162 trillion is spelled out in detail, P 449.952 billion in special purpose funds (programmed and unprogrammed) are composed only of one-line items. 


B) In addition to the General Appropriations Act which Congress will approve, there are the automatic appropriations, or funds which are automatically considered approved by Congress.

These are the following: 

Interest payments for debt service: P 352.7 billion
Net lending: P 24.9 billion
Internal revenue allotment: P 341.5 billion
Employees’ retirement and life insurance premiums: P 28.9 billion
Special accounts in the general fund: P 21.1 billion
Tax expenditures: P 26.9 billion

Total: P 796.0 billion 

It must be noted that while these are automatic appropriations, Congress still has a duty to look into the details of these accounts, especially the interest payments for debt service. 


Out of the total expenditure of Ph 2.268 trillion, only the budgets of the departments and agencies have details which can be examined lengthily by Congress, totaling P 1.162 trillion. 

The balance composed of special purpose funds of P 310.047 billion (programmed) and P 796.02 billion--a total of P 1.106 trillion--don't go through the same rigorous examination as the departments and agencies.

Unprogrammed funds of P 139.9 billion is not included. The above explains why I consider this budget vulnerable. 

Another source of vulnerability is the fact that the Constitution allows the President to transfer funds in "the office of the President." 

The term "office" has been interpreted to mean the entire national government system, and not just the office of the President.

The former interpretation has led one leading member of Congress to observe that "while Congress has its pork barrel, the President has his beef barrel." 

2) The Budget department has failed to submit a report on how it spent special purpose funds.

Since 2006, Social Watch Philippines has been calling for the reduction, if not the abolition of lump sum appropriations as exemplified by the Special Purpose Funds. 

We have to bear in mind that this is not provided for in the Constitution. While there is mention of Special Funds, nothing is stated about Special Purpose Funds. 

NONETHELESS, programmed special purpose funds are included in the proposed General Appropriations Act. The one-line items in this fund are expected to be approved by Congress along with the detailed budgets of departments and agencies. 

In 2009, the Commission on Audit issued a report on Special Purpose Funds, pointing out abuses related to the utilization of these funds. In its 2010 Audit Report, COA advised DBM to" refrain from transferring funds from one lump-sum/special purpose fund (SPF) to another, or utilizing the appropriation of one Fund for purposes of another Fund, otherwise the intentions of the appropriation law will be circumvented." 

Because of their vulnerability, the Department of Budget and Management is required to report quarterly to the House Committee on Appropriation and the Senate Committee on Finance, regarding releases from the Special Purpose Funds, Supplemental Appropriations, Continuing Appropriations, and Automatic Appropriations. 

Last year, we inquired from the House Committee on Appropriations if this requirement was fulfilled. We received a negative answer. 

In this year's proposed General Appropriations Act, this requirement is reiterated in Section 86. Again, another vulnerability. 

3) The pork barrel distorts the constitutional definition of what a legislator and an executive official is.

At present, the most controversial item in the programmed Special Purpose Funds is the Priority Development Assistance Funds of P 25.240 billion.

While public protests about pork usually escalate during the budget season, the calls for abolition of the Fund are getting louder. At present, public disgust is at its highest and is exacerbated by the Janet Napoles and other related pork scandals. When I was eight years old, I used to read cartoon editorials in the Philippine Free Press excoriating members of Congress on the pork barrel. 

Now, 65 years later, abuses have become more shameless and open, even as the public repeats its annual denunciations of pork during the budget season. Both the Executive and the Legislature have sung paeans and hosannas to the noble intentions of the pork barrel. 

We all know by standard definition, that it is the use of national funds to benefit the constituency of a representative or a senator for patronage purposes. 

We also know that we picked up this practice from the spoils system of the American government which has long abandoned it.

A) It takes two to tango. 

While calls for its abolition are focused on congressmen and senators, it must not be forgotten that the pork barrel is beneficial both to the executive and the legislature. For the executive it is both carrot and stick which is utilized to reward cooperative legislators and punish those who are critical of the administration. 

We all know how effectively this was used by the previous administration. Surely, many of us remember that when queried last year as to why some congressmen were not receiving their pork allocation; the answer of the DBM was "it is political." 

For the legislator, the benefits are obvious--patronage for favored districts, local government units, and agencies. Many believe that Napoles is not alone. There are many of them out there, quietly operating for decades. A legislator can even do a Napoles by himself or herself. 

There is talk of good pork and bad pork. It does not change the fact that it distorts and blurs the constitutional definition of what the role of the legislator is and what the role of the executive is. 

Every child knows that the function of the legislature is to enact laws, the most important of which is the national budget, even as the function of the executive is to implement the law, while the judiciary settles legal disputes between the two. 

Pork addicts are wailing, "What will happen to congressmen and senators if their pork is withdrawn? All of them have budgets for their salaries and those for their staff, travel, district offices, and consultants--the whole lot." 

They have their perks for committee chairmanships and their usual bonuses. Their offices will not collapse. They will not be beholden to the executive if pork is abolished. They can examine the executive's budget proposal without being seduced by pork. They will not be besieged by contractors, suppliers, and other assorted hangers-on. 

The Napoles investigations and other cases which are surfacing have clearly shown that these scams could not have happened without the participation of the executive, as shown in the fertilizer scam, and the current scandal in the Department of Agriculture. 

I believe that considering the fact that pork is mutually "beneficial" to the executive and the legislature, they will not abolish it of their own volition. 

It will take the combined outrage and anger of media, civil society, the various religious faiths, educational institutions, and the ordinary citizens to push these two branches of government into doing the right thing.

(Leonor Magtolis-Briones is a Professor Emeritus of the University of the Philippines National College of Public Administration and Governance. Besides being the former president of the Freedom from Debt Coalition, she has also served as the Philippines' national treasurer under then-President Joseph E. Estrada.)

(This is a edited version of a piece originally entitled Speaking for Myself: The 2014 National Budget, Special Purpose Funds, Pork Barrel, at Iba Pa.)