THE Senate Committee on Finance has adopted the P9.82 billion confidential and intelligence funds (CIFs) recommended by the House of Representatives when it approved the proposed P5.768 trillion General Appropriations Act (GAA) for 2024.
The amount is estimated to be P300 million lower than the Malacañang request of P10.139 billion included in the proposed 2024 National Expenditure Program (NEP).
Sen. Juan Edgardo Angara, committee chairman, made the disclosure during yesterday’s plenary discussion on the general principles of the proposed national budget next year.
It was minority leader Aquilino Pimentel III who asked Angara how much CIFs were included in the proposed national budget for 2024 amid the controversy generated by the decision of the House to realign the requested confidential funds of civilian agencies amounting to P1.2 billion to security departments and to offices involved in the protection of the country’s sovereignty, particularly the West Philippine Sea (WPS).
Pimentel has been vocal in his opposition to the grant of confidential funds to civilian agencies not involved in national security matters and criminal law enforcement.
In response to Pimentel’s questioning, Angara said the Senate finance committee adopted the House’s recommended CIFs which was pegged at P9.82 billion.
“Total of P9.82 billion in the committee report, you honor… The House reduced it, your honor, and we adopted it (amount) in the (Senate) committee report,” Angara said.
When Pimentel inquired how the executive came up with the requested CIF amounts and how it decided what agency should be given the secret funds, Angara said the decision to allot CIFs to agencies was based on “who requested for it and what was the justification for it and did it contribute to the agencies’ mandate.”
Pimentel said the reduction of around P300 million from the total CIFs under the NEP was small especially since “one agency” requested a confidential fund in the amount of P500 million.
The minority leader, without naming the agency, was obviously referring to the Office of Vice President Sara Duterte (OVP), whose P500 million request for confidential funds in next year’s budget has been criticized by minority lawmakers at the House and by opposition organizations.
Angara said the P500 million confidential fund of the “agency” was realigned to other agencies like the Philippine Coast Guard, National Security Council, and the National Intelligence Coordinating Agency.
The estimated P300 million, he said, was slashed from the NEPs’ proposed CIFs.
“So, the item is still the same although it is no longer in the same agency,” he added.
Pimentel asked for a detailed summary of how the CIFs “were rebalanced” so he can further study it.
CONTINGENCY FUND
Pimentel also sought clarification from Angara on the P125 million “released” by the Office of the President (OP) to the OVP in December 2022, noting that the appropriation was “treated as confidential funds.”
“The amounts in the contingency fund, they are regularly COA (Commission on Audit) auditable in the regular process, am I correct? If it is true, then by releasing it as confidential fund, did we now allow a conversion of a fund which is audited in the regular COA manner to a special COA manner, Mr. President? Therefore, theoretically speaking, if that is allowed, the entire P13 billion contingent fund is convertible to a confidential and/or intelligence fund, Mr. President?” Pimentel inquired.
Angara replied in the affirmative but stressed “that will not happen” since contingent funds are supposed to be spent on “contingencies which may occur” in government agencies.
He added that “it will not be responsible to release it in the form of confidential funds for the whole amount” since there are other agencies which might need emergency funds.
Pimentel also asked for clarification whether the funds were “released” or “transferred” from the OP to the OVP since he is confused with the explanation of the Department of Budget and Management (DBM).
Angara said it was considered a “release,” but Pimentel said that when “you look at the official documents” on the movement of the funds, “it was classified as a transfer.”
“Transfer to contingent fund but when it reached the OVP it was ‘transferred from’. So does the word transfer have different meanings when we use it in relation to the budget?” Pimentel said.
Angara said there was an “error” in the use of the word “transfer,” saying what should have been used was the word “released.”
“They are changing the terminology for 2024 to be more precise, your honor,” Angara said.
SMOOTH SAILING
Rep. Zaldy Co (PL, Ako Bicol), chairperson of the House Committee on Appropriations, said he sees the upcoming bicameral meetings with senators on the 2024 national budget to be smooth sailing following the consensus among senators to remove the CIFs of civilian agencies.
“This jibes with or is a vindication of the decision of the House of Representatives to realign those appropriations. With such consensus, we foresee a smooth bicameral conference on the 2024 budget,” Co said.
Co said the reported agreement of senators to strip civilian agencies of CIFs would expedite the approval of next year’s spending program.
The House of Representatives earlier realigned some P1.23 billion in confidential funds from several government agencies to efforts to boost security in the WPS, which has prompted former President Rodrigo Duterte to retaliate by saying the chamber has hidden “pork barrel” and is “the most rotten institution” in the country.
Among the agencies that were stripped of confidential funds under the House-approved version of the 2024 GAA are the OVP (P500 million) and the Department of Education (P150 million), both headed by VP Sara Duterte.
UNOBLIGATED FUNDS
Also during yesterday’s plenary discussions on the general principles of next year’s national budget, Angara said the national government has P1.27 trillion in unobligated funds in the 2023 budget.
Angara disclosed this after Senate deputy minority leader Risa Hontiveros asked for an update on the government’s spending capacity this year.
During the interpellation, Hontiveros asked the “total current magnitude of obligated and unobligated balances in the 2023 General Appropriations Act” so she can have a picture on the spending capacity of the government.
Angara said: “Obligated amounts total around P4.08 trillion, whereas unobligated amounts total around P1.27 trillion.”
He said the P1.27 trillion is around 24 percent of the P5.268 trillion national budget for this year, adding the obligation rate is 76 percent while the disbursement rate is about 80 percent.
The DBM defines “unobligated allotments” as portions or balances of any programmed appropriation free from any obligation or encumbrance which are still available after the completion or final discontinuance or abandonment of the work, activity, or purpose for which the appropriation was authorized.
Hontiveros noted that the National Treasurer has reported that the government’s target disbursement level was at P2.58 trillion for the first half of the year, but the actual disbursements was only at P2.42 trillion.
She asked Angara what are the government agencies that “contributed to the lower than target disbursement performance and why they have not spent what they committed to spend in the first half of the year.”
Angara said the top five agencies which have contributed to underspending include the Department of Information and Communications Technology (DICT), Department of Migrant Workers (DMW), Department of Social Welfare and Development (DSWD), Department of Energy (DOE), and the Department of Tourism (DOT).
He said the “varied reasons” why these agencies have underspent were due to procurement-related difficulties, late delivery of goods, “sometimes” there are failed biddings, there are checks which have to be disbursed, and in the case of the DSWD, a lot of preliminary work like profiling, registration, evaluation, and validation of beneficiaries in its 4Ps program.
He said the agencies have already submitted to Malacañang their respective “catchup plans” to meet the target disbursement rate before the year ends.
Angara said the DICT has to catchup on its ICT systems, infrastructure development, advisory programs, e-government program, the Government Emergency Communication System program, ICT and cybersecurity policies management program, ICT work force rescaling, the Digital Transformation Center, national broadband, and government portal, among others.
For the DMW, he said it needs to catchup on its Overseas Employment Facilitation Services, overseas regulatory program, and promotion of international labor affairs.
For DSWD, Angara said it needs to fast track its 4Ps program, the Protective Services for Individuals and Families in Difficult Circumstances, sustainable livelihood programs, supplement refeeding program, multi-sectoral nutrition project, and the National Household Targeting System for Poverty Reduction.
He said the DOE needs catching up on its biofuels program, energy efficiency and conservation program, National Energy Efficiency and Conservation Program, alternative fuels and technology program, nuclear energy program, Philippine Conventional Energy Contracting program, among others.
For the DOT, it needs to improve on market and development program, tourism policy formulation and planning program, branding campaign program, and the Philippine Commission on Sports scuba diving program.
Angara said the agencies have to setup additional Bids and Awards Committees, hire more workers to assist in their respective procurement processes, and capacitate their procurement management teams.
Hontiveros said there are three government agencies which have the lowest obligation rates for this year that also needs to improve on their performance.
Based on a DBM report on the Status of Allotments, Obligations, and Balances, she identified them as the Department of Agriculture (DA), which has an obligation rate of only 60 percent but was only able to disburse 47 percent of the 60 percent obligated funds, the Department of Transportation (DOTR), which has a 42 percent obligation rate but was only able to spend 47 percent of the obligated funds, and the Department of Public Works and Highways (DPWH), which has an obligation rate of 75 percent but disbursed only33 percent of the obligated funds.
“These agencies have the highest budget allocations in the national budget and their spending performance are critical to drive growth, and DA in particular, to cushion the effect of food inflation,” Hontiveros said.
In her opening statement before the plenary deliberations, Hontiveros said the 2024 proposed national budget should not have “mis-priorities” and every single centavo should be spent wisely.
“We have to do so much amid a very, very tight fiscal space. Like many countries in the post-pandemic era, our fiscal situation is characterized by high debt and the deficit but more importantly set spending priorities that raise growth — growth that is both that is both inclusive and fiscally sustainable,” she said.
She said this can be done by “rechanneling allocations” like confidential funds in civilian agencies with no direct involvement in national defense and public safety “and funds that eat up other sources of development financing like the Maharlika Investment Fund.” — With Wendell Vigilia