Palace, critics clash on scrapping of SARO
Malacañang says scrapping the SARO system is an anti-corruption move; critics say it removes the paper trail of government funds now centralized in the Palace

RELEASE DOCUMENT. The budget department says the 2014 budget is the official release document, effectively scrapping the SARO system. Malacañang says it's an anti-corruption initiative but critics say it removes the paper trail of government funds. File photo of 2014 budget signing by Lauro Montellano Jr/Malacañang Photo Bureau

MANILA, Philippines – Malacañang hailed the budget department’s decision to scrap the special allotment release orders (SAROs) system, saying it will help reduce corruption. For Palace critics, it was a step back for transparency.

Deputy Presidential Spokesperson Abigail Valte said on Friday, January 3, that the Department of Budget and Management’s (DBM) move will expedite the implementation of projects. 

On Thursday, the DBM announced that departments and agencies no longer need to secure SAROs to get funds because the 2014 budget acts as the government’s official budget release document.

“Agencies will be able to act faster and, more importantly, removing the SARO requirement will cut the red tape or the papers that have to be accomplished or submitted, and you lessen opportunities for corruption because there is less red tape,” Valte said in a Palace press briefing Friday.

A SARO is a document of the DBM that paves the way for the issuance of a notice of cash allocation (NCA) that will trigger the release of funds.

The DBM decision to scrap the SARO system comes as the National Bureau of Investigation (NBI) investigates a scam in the department involving so-called fake SAROs. A syndicate supposedly involving DBM employees and congressional staff created and used the fake SAROs to demand advance payments from contractors of farm-to-market road projects.

The new system also comes on the heels of the pork barrel scam, the biggest corruption scandal in recent history. In the scam, lawmakers allegedly siphoned off funds intended for their pet projects to fake non-governmental organizations in exchange for millions of pesos in kickbacks. (VISIT: Pork Tales, A story of corruption, Rappler’s multimedia year-end special)

Valte explained how doing away with the SARO requirement will fast-track government projects.

“Before, it takes two to 3 weeks before a SARO is issued even if the project is already approved under the agency’s budget. So that means that when the year starts, the agency has to wait instead of starting bidding in January. Now, because you no longer need SAROs for most of the projects, they can start bidding at the start of the year,” Valte said.

Valte said it will now be easier for agencies to carry out their projects, and they can do pre-procurement activities even before the start of the year.

“It will be easier for them to front-load projects, at least within the first week of January, you can already award projects…. So, ideally, by [the] first week of January, they can already grant the notice of award,” she said.

“Before, the SARO is really your green light [for project implementation]. So now, the agencies can expedite the process. You can cut time out of the procurement process,” added Valte.

Lump-sum funds excluded

Calling it the “GAA-as-Release-Document budget regime,” the DBM said the new system means that all disaggregated budget items in the GAA are already considered released to their respective agencies.

Yet there is an exception. Budget Secretary Florencio Abad said lump-sum funds, the President’s Special Purpose Funds, and Budgetary Support to Government Corporations will still require prior clearance and approval before the release of the funds.

Valte cited the calamity funds as an example.

“For calamity funds, there is a criteria before the agency’s request is approved. It’s a process that is in the NDRRMC (National Disaster Risk Reduction and Management Council) Law that was passed in 2010. That has to be followed because it is a lump sum and we have to see whether the purpose that is applied for is within conformity of the law,” she said.

Abad said scrapping the SARO system allows agencies to use funds on the first working day of the year, when the budget officially takes effect. He said it will minimize irregularities in the use of funds.

“In 2013, we were made aware of a well-established and highly coordinated racket that centered on the dissemination of fake SAROs. We asked the [NBI] to launch a probe into this, the official results of which we’re still waiting for. It appears that unscrupulous individuals have taken advantage of the necessity of release documents so that these parties were able to profit from the distribution of fake SAROs,” Abad said.

The budget chief said that the new system will “thwart those who’ve made the budget implementation process a hotbed of graft and corruption.”

“This is part of our deliberate, focused campaign to facilitate greater transparency and accountability in the expenditure process, so that every peso spent by government will indeed benefit all Filipinos,” Abad said.

‘Patronage politics still rules’

For Bayan Muna Representative Neri Colmenares, scrapping the SARO system will only benefit Malacañang’s allies. 

“With the 2014 budget littered with pork barrel, it will now be easier for legislators close to Malacañang to get their pork barrel. The P14.6-billion supplemental budget supposedly for calamity victims is the PDAF (Priority Development Assistance Fund) of congressmen and senators,” Colmenares said in a statement on Friday. 

Colmenares added that the old SARO system allowed the public to trace the money trail.

“Without SARO, [lawmakers’] access to their pork is difficult to trace especially for legislators allied with Malacañang. It will also mean a lot of scrambling for congressional insertion in the next budgets. Patronage politics still rules.”

Para sa mga corrupt, it does not matter kung walang SARO,” he added. (To the corrupt, it does not matter if there is no SARO.)

In 2013, the Supreme Court issued a landmark decision striking down the PDAF but what militant lawmakers call presidential pork like the President’s Social Fund remained intact in the 2014 budget. 

Valte though said there will still be safeguards in the use of government funds even without the SARO.

“The agency remains responsible for the budget that is given to them and, of course, that involves processes when it comes to procurement, disbursement, liquidation because the COA (Commission on Audit) audits them and it will be revealed if they did not use their funds properly,” Valte said. 

What are your thoughts on the scrapping of the SARO system? Let us know in the comments section below. – Ayee Macaraig /



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