COULD this just be a “false controversy”?

This question was raised by an economist and erstwhile consultant to a former chairman of the House of Representatives’ appropriations committee in light of the recent exposé by Senator Panfilo Lacson on cases of “double entry” in last year’s national budget.

The issue of double appropriation, says the source (who wishes to remain anonymous), is “possibly a false controversy,” even as he notes that the proper questions have yet to be asked in a proper forum.

Senator Lacson made public last week the first case of “double entry” involving a P200-million redundant appropriation for supposedly the same road extension project. The first instance is found on the second page of the Department of Public Works and Highways (DPWH) budget for the “construction of Pres. Garcia Avenue Extension from the SLEX (South Luzon Expressway) to Sucat Road including ROW (right of way)” as part of locally funded road projects to decongest traffic in Metro Manila.

The second instance is found under the subheading “Urgent Infrastructure Including Local Projects” but which referred to the C-5 Road Extension. C-5 Road, however, has since been renamed Pres. Carlos P. Garcia Avenue.

Last Tuesday, Lacson also divulged another “double entry” involving Aguinaldo bridge in Cavite which was allotted P50 million under two subheadings, one as part of roads in other areas to be decongested of traffic, and another, again as part of “Urgent Infrastructure Including Local Projects.”

What should be important to establish, the source says, is whether, having identical amounts, the appropriations refer to the same project or not. “Do these two appropriations refer to the same scope of work?” If not, then this, he says, could just be a sloppy job, a problem arising from a lack of specific descriptions given to projects in the General Appropriations Act.

DPWH senior undersecretary Manuel Bonoan clarified, though rather belatedly, last weekend that the similar entries are actually two components of just one project, the “Alignment of the C-5 Road,” meant to connect the North Luzon Expressway to the SLEX and to the Coastal Road in Parañaque and Las Piñas. One component is the 300-meter, four-lane flyover in front of the SM shopping mall on Sucat Road, while the other component is an 800-meter, six-lane highway in Las Piñas.

Granting that the DPWH’s claim is true, the source nonetheless faults the agency for not providing specific locations as a way to distinguish the said components of the project. “It’s the agency’s responsibility,” he stresses.

Former budget secretary Benjamin Diokno does not think that this is the case here though. As he surmised in Manuel L. Quezon III’s Inquirer column today, the first project (Pres. Garcia Avenue Extension) is a “congressional insertion” by a legislator done at the level of the bicameral conference committee, while the second (C-5 Road Extension) is the original project proposed by the Executive as specifically mentioned in a National Expenditure Program‘s attached document, the Details of Selected Programs/Projects.

Diokno’s hunch is that this was a budgetary insertion the President allowed as it gives her leeway to declare the extra P200 million as savings, an amount she can later use for whatever purpose she sees fit.

Meanwhile, the double appropriation for the Aguinaldo bridge could also be a case of “congressional insertion” as it does not appear in the NEP or any of its accompanying documents.

Budget ‘politics’

For sure, legislators have every right to make insertions, or introduce amendments to the Executive’s proposed budget so long as these do not increase its amount. Only that our source says the problem is that insertions are most often dictated by politics.

Legislators, he says, are known to insert new appropriations for portions of road projects that lead to their districts or areas because they want the road immediately finished and be credited for having allocated funds for it.

The insertions in the 2008 budget can be found under the item bearing the heading “Urgent Infrastructure Including Local Projects.” Total insertions amounted to P4.126 billion, including a lump-sum appropriation of P3.426 billion for “Other National Public Works/Local Infrastructure Projects” that Senator Lacson also called attention to in his privilege speech. (see table)

Completion of the Cagayan de Oro International Trade and Convention Multi-Purpose Center, Cagayan de Oro City
P100 million
Repair and Rehabilitation including Improvement of Safety Standards of Various Roads along Public Schools
P100 million
Construction of Access Road (West Lateral Dike) connecting to Hacienda Dolores, Porac Interchange of the Subic-Clark-Tarlac Expressway
P100 million
Construction of Tagaytay-Silang Road (Balalong Matanda Section)
P13 million
Construction of Molino Boulevard including ROW
P37 million
Repair/Rehabilitation of Aguinaldo Bridge*
P50 million
Construction of C5 Road Extension from SLEX to Sucat Road including ROW*
P200 million
Rehabilitation/Reconstruction of Damaged Paved National Roads Generated from Pavement Management System Highway (HDM-4)
P50 million
Road Upgrading (Gravel to Concrete) Based on Gravel Road Strategies Traffic Benchmark for Upgrading to Paved Road Standard (HDM-4 Project Analysis)
P50 million
Other National Public Works/Local Infrastructure Projects
P3,426.5 billion
P4,126.5 billion

* with double appropriation

The item “Urgent Infrastructure Including Local Projects” actually first appeared in the GAA in 2007. Back then, however, it only had a total allocation of P160 million for the following projects:

Improvement of Nueva Ecija-Pangasinan Road
a. Km. 165+832.70-Km. 166+000
b. Km. 171+760-Km. 172+195.5
P15 million
P5 million
P10 million
Improvement of San Jose-Lupao Road, Km. 167+461-Km. 175+385, Nueva Ecija
P5 million
Improvement of Lucena-Tayabas-Mauban Port Road, Km. 127+628-Km. 132+070, Lucena
P10 million
Construction of San Vicente-Gatan-Lubac Road, Sta. Ana, Cagayan, 1st District
P30 million
Completion of the Cagayan de Oro International Trade and Convention Multi-Purpose Center, Cagayan de Oro City
P100 million
P160 million

All told though, the larger issue to civil-society groups, particularly alternative budget advocates, is actually one of transparency, or the lack of it, in the process of crafting the yearly GAA.

To Professor Leonor Magtolis Briones of the National College of Public Administration and Governance and convenor of Social Watch Philippines, the “double entry” episode has only brought to light a major part of the budget process that has remained “dark and murky.”

‘Third House’

Briones refers to the negotiations and compromises that materialize as congressional insertions at the level of the bicameral conference committee. Often regarded as “The Third House,” the body is composed of representatives of the majority and minority from both the House of Representatives and the Senate. It reconciles the two chambers’ versions of the budget to craft the final form of the appropriations act.

In contrast to the deliberations and plenary debates that are done in full view of the public, meetings of the bicameral committee are held in an undisclosed “neutral” place without the benefit of public scrutiny. No minutes are taken of its proceedings, which are also not allowed to be covered by the media.

“It is in the bicameral committee where last minute negotiations and compromises are arrived at,” Briones wrote in a 2006 article. “The atmosphere is just as exciting, if not more, than the plenary sessions in either House. The members shed off their public faces and revert to their natural selves as they wheel and deal. It is said that one has to have a cast-iron stomach to participate in the no-holds-barred meeting.”

The former national treasurer would also rather call the bicameral committee as “the Bicameral Committee plus plus” for the constant consultations it holds with the Executive. Briones says the Executive is the “unseen third party” in bicameral negotiations.

No more ‘congressional insertions’

“This practice has to be stopped,” insists Briones, who has found allies in legislators like Senators Mar Roxas II and Miriam Defensor-Santiago. Both are pushing for the abandonment of the established practice of “congressional insertions” in the annual GAA in favor of a more transparent budget deliberation process.

“Insertions might be legal but are certainly improper,” says Roxas. “The procedure may have been followed, but buried in that thick book called the GAA are various things that are done in secret and escape the public eye.”

In this regard, Roxas recently filed Senate Bill No. 2623, the proposed Congressional Insertions Transparency Act of 2008, seeking to mandate the full disclosure of all congressional insertions.

Santiago, for her part, is proposing that the bicameral committee’s mandate be limited to reconciling disagreeing provisions in the House and Senate versions of the budget. The senator is also calling for a stop to the practice of introducing new budget programs, projects and activities during the bicameral process of harmonizing the budget versions of both chambers.

Saying that the national budget is “too important to be left to deliberations without records and decisions without the participation of constituents,” Briones enjoins citizens to involve themselves in the budget process, and if possible, all the way to the bicameral committee meetings.

The Alternative Budget Initiative (ABI), a national consortium of citizens’ groups of which Briones is a leading figure, has for the past two years engaged with legislators in formulating and lobbying for alternative budget proposals which prioritize social development focused on the areas of health, education, environment, agriculture and macroeconomics.

Part of ABI’s advocacy is to propose alternative sources of funding for social development which includes transferring vague and unreasonably big allocations to expenditure for social services. Its campaign for the 2008 national budget resulted in a total of P6.3 billion in additional allocations for basic education, higher education, health, environment and agriculture.

Yet even as the current Congress has encouraged the private sector to actively participate in the congressional deliberations on the national budget, it remains uncertain if a soon-to-be consolidated draft of the three pending bills seeking to institutionalize people’s participation in the budget process will extend to negotiations within the bicameral committee.

But public participation alone, the former House appropriations committee consultant thinks, will not address the problems hobbling the budget process.

Reclaim ‘power of the purse’

“The budget is too important a piece of public policy to continue to be hostaged by politics,” he says, alluding to the legislators’ woeful exercise of their “power of the purse.” He points to members of Congress, particularly those aligned with the administration, who behave as if the government operates within a parliamentary system, defending the President’s budget instead of acting independently as guardians of the people’s money to scrutinize every appropriation proposed by the Executive.

Groups like the Freedom from Debt Coalition are similarly challenging Congress to reclaim its constitutional power of the purse in the face of the “unregulated fiscal powers” of the Executive Department. To clip what it describes as Gloria Macapagal-Arroyo’s “fiscal dictatorship,” FDC has specifically recommended to Congress the following measures:

  • amendment of the Revised Administrative Code of 1987 as instituted by Executive Order 292 of then President Corazon Aquino;
  • removal of the automatic appropriations for debt service (Section 31-B), and the presidential powers of impoundment (Section 38) and realignment of savings (Section 39);
  • amendment of the Foreign Borrowings Act of 1966 and the Official Development Assistance Act of 1996 to put limits and parameters on the unilateral contracting of loans.

Will our legislators face up to the challenge this time or will it be politics as usual?

1 Response to A ‘false’ controversy?


The Daily PCIJ » Blog Archive » Arroyo’s former budget chief sees negligence in ‘double entry’ controversy

September 23rd, 2008 at 4:58 pm

[…] are still bitterly locking horns whether or not to conduct an investigation on the issue of “double appropriations” in the 2008 national budget, former budget secretary Emilia Boncodin would like to give […]

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