THE leadership of the House of Representatives is at loggerheads with the Department of Budget and Management (DBM) over its decision to temporarily halt the funding for 35 percent of programmed appropriations under the 2020 national budget and use these instead to fund the government’s response to the coronavirus disease 2019 (COVID-19).
Speaker Alan Peter Cayetano said the DBM, which is under Secretary Wendel Avisado, has not been transparent after issuing a circular which took effect last April 1.
“We want it to be done openly,” Cayetano told radio dzBB on Sunday. “What programs are we exactly scrapping and what will be temporarily postponed?”
Under National Budget Circular (NBC) No. 580, at least 10 percent of funds released for maintenance and other operating expenses (MOOE) and capital outlays will no longer be released. It also stopped the release of funds for “new programs, activities, including Congress-introduced increases which are not likely to be implemented” within the year.
The projects to be affected include construction or repair of buildings, foreign travels with exceptions, local travels with exceptions, celebrations, cultural and sports events, and hiring of new contractual workers except for COVID-19 response.
Congress has allowed the executive to reprogram, reallocate or realign any appropriation in the 2020 General Appropriations Act to address and respond to the COVID-19 emergency, including social amelioration for affected communities and the recovery and rehabilitation of affected areas.
This power was given to the President by Republic Act No. 114469 or the Bayanihan to Heal as One Act.
Cayetano dismissed critics’ claim that the issue is about “pork” barrel, saying the infrastructure projects are above board as these are all part of the GAA.
“It’s not pork barrel,” he said as he pointed out that the projects are all “very specific” in the GAA and were approved by the executive, the Senate and the House of Representatives.
“If the intention is to protect what they say is pork barrel, we should have made it clear under the law that the budget for infrastructure is untouchable (but we did not),” the Speaker said.
Besides, Cayetano said, Finance Secretary Carlos Dominguez and the rest of the economic team have made it clear that there is a need to enhance the “Build, Build, Build” program to help save the economy post-pandemic.
Reps. Stella Quimbo of Marikina and Precious Castelo of Quezon City backed the Speaker, saying funds for infrastructure projects under the 2020 national budget should be left untouched to provide the economy the stimulus it needs during and after the pandemic.
“Given its multiplier effects, a conservative estimate would show that a P100-billion loss in the infrastructure budget would translate into a corresponding drop in GDP valued at P300 billion,” said Quimbo, the co-chair of the economic cluster of the House of Representatives’ Defeat COVID-19 committee.
Quimbo, an economist, said that if labor accounts for 37 percent of the P100-billion cut in infrastructure spending, then the loss in wages would amount to P111 billion.
“If workers are paid P500 per day for 22 days per month for a period of six months, then total wages would amount to P66,000 per worker. Hence, a loss of P111 billion in wages for every P100 billion cut in infrastructure spending would mean 1.68 million workers losing their jobs,” she said.
Castelo urged the executive to spare big projects under the Build, Build, Build program from the extended enhanced community quarantine (ECQ).
“We have at most May and June to do public works activities before the onset of the rainy season, which will surely slow down again the implementation of our national and local government infrastructure programs,” she said.
She said resuming work on certain BBB projects would provide income to those who lost their jobs due to ECQ and “would be a way of restarting the economy, even on a limited scale.”
Quimbo recalled that Dominguez has underscored the need to sustain funding for infrastructure projects to help restart the economy and generate jobs and other livelihood opportunities once the pandemic is effectively contained.
Dominguez has also committed to keep the budgetary allocations for the infrastructure program intact, during the recent hearing of the panel’s economic cluster.
Dominguez pointed out during a recent virtual hearing that on top of realigning savings from the 2019 and 2020 national budgets as authorized by Congress under the Bayanihan law, the government can cover the funds needed to defeat COVID-19 and revitalize the economy once the crisis is over by borrowing from the domestic market and multilateral lenders such as the World Bank and Asian Development Bank.
The committee at that time had tackled the proposed Philippine Economic Stimulus Act (PESA) which is a consolidation of fiscal stimulus bills filed by Quimbo and Albay Rep. Joey Salceda, chair of the House ways and means committee.
Quimbo’s version of the economic recovery measure calls for a fiscal stimulus amounting to P370 billion, which is on top of the estimated P330 billion that the government would spend under the Bayanihan law.
Rather than curtail infrastructure spending, Quimbo and other lawmakers proposed that the consolidated PESA provide additional funding of P650 billion for the BBB program so that it could be expanded to cover projects in universal health care, education and food security.