Nancy Binay grills Abad: DAP hijacks fiscal independence

Ayee Macaraig
Nancy Binay grills Abad: DAP hijacks fiscal independence
The neophyte senator takes an aggressive stance in questioning the budget chief on fund transfers the executive branch made to the Commission on Audit and the Commission on Elections

MANILA, Philippines (UPDATED) – “Ang nakakatakot, Secretary Abad, kasi nagiging discretion ninyo kung bibigyan ng pondo o hindi.” (What is scary, Secretary Abad, is that it becomes your discretion to give funds or not.)

Unlike her colleagues from the majority, opposition Senator Nancy Binay pressed Budget Secretary Florencio Abad to answer why the administration resorted to its controversial Disbursement Acceleration Program (DAP), instead of just asking Congress to fund its priority projects.

The neophyte senator took an aggressive stance in questioning Abad, at times raising her voice at the secretary and cutting him off. Binay zeroed in on the fund transfers the executive branch made to the Commission on Audit (COA) and the Commission on Elections (Comelec), which the Supreme Court declared unconstitutional.

Binay said Abad could have prevented the scenario by either including the amount needed to purchase Precinct Count Optical Scan (PCOS) machines in the national budget, or asking Comelec to request Congress for a supplemental budget.
The Comelec had to buy the machines needed for the 2013 senatorial polls.

“The fiscal independence of constitutional bodies is hijacked by DAP. Kung ‘di pa nagmakaawa si [Comelec Chairman Sixto] Brillantes, ‘di pa nabigay ang pondo?” (If Comelec Chairman Brillantes did not plead, the funds wouldn’t have been given?)

Asked about Binay’s question on fiscal autonomy in a media interview after the hearing, Abad explained: “It’s an extraordinary circumstance. It just happens once in 4 years. It’s at the instance, they were the ones who asked and we just granted the request. I don’t think you can say their independence or autonomy was at risk because that was just one instance.”

Abad said the executive branch could not turn down the request. “Especially for Comelec, it’s hard because the consequence will be the elections won’t push through or back to manual. We will be the ones held accountable there, not Comelec.” 

In questioning Abad, Binay said the same thing happened with COA, which received fund releases from DAP for its IT infrastructure program and the hiring of additional litigation experts.

“There is a provision in the Constitution that the constitutional bodies need fiscal autonomy so they have independence. It now appears COA has a huge debt of gratitude to you because you added funds to their agency,” Binay told Abad.

In response, Abad explained that the Department of Budget and Management (DBM) advised COA to use its own savings for the expense but it responded that it needs to use the money for its offices in the provinces. “That’s where they wanted to spend the funds.”

The secretary said it was the same advice DBM gave to Comelec: to use its own savings for the purchase of the PCOS machines.

“The problem is the Comelec never showed to us the financial report how they spent the money. If Comelec were transparent and accountable for all the funds they have, they will submit detailed reports like the one you are asking me now. We won’t have that problem. It’s the same thing for other agencies,” Abad said.

He added, “They think being fiscally autonomous has nothing to do with us. That doesn’t exempt them from fiscal transparency.”

The DAP was the administration’s program meant to address underspending to boost economic growth, spanning years from 2011 to 2013. Yet the Court ruled that key acts under DAP violated the separation of powers between the branches of government.

‘DAP for lawmakers has no cap’

The daughter of Vice President Jejomar Binay also focused on the fund releases for lawmakers.

She asked Abad how much exactly was given to senators and congressmen. She said by her office’s computation, it was P17 billion or more than the 9% of DAP that the administration said was channeled through legislators. 

Abad replied that the 9% was just an “estimate,” including projects of local government units and national agencies. 

He said the DBM has yet to check the Special Allotment Release Orders (SAROs) of the DAP projects to trace the actual amount.

Binay then asked if there is a limit to fund releases to lawmakers under DAP, like those set for the Priority Development Assistance Fund (PDAF) where congressmen get P70 million ($1.616 million) yearly and senators P200 million ($4.6 million) annually.

Sa PDAF, may cap. Sa DAP, puwede sa legislator makakuha ng P300 million, P100 million ($2.3 million*) so mas maigi pala ang DAP?” (In PDAF, there is a cap. In DAP, the legislator can get more than P100 million so it seems DAP is better?)

Abad responded, “Hindi naman (It’s not like that).”

Binay also asked how come the fund transfer to Comelec for the PCOS machines was not included in the list of DAP projects the DBM released.

At this point, Abad clarified that the fund release was not under DAP after all.

The secretary explained that the fund release was from “regular savings,” prompting Binay and other senators to clarify if there are other forms of savings not under DAP, and therefore another list of projects funded by these savings.

Abad said: “DAP is more than a source of fundings. The Comelec project was not included because of the urgency but it qualified to be under DAP. But it’s just use of regular savings.”

Asked if there was another name for these other types of savings, Abad said these are just called regular savings.

This prompted Senator Ferdinand Marcos Jr to ask Abad for a complete list of sources of funds pooled in DAP, where they came from, and how and why they were declared savings. Abad agreed but said for now, it is hard to do a “one-to-one correspondence.”

“We just pool savings. We can’t tell you which money went to which project. It’s difficult to answer,” Abad said.

Asked to expound, Abad said after the hearing, “Ang pera walang tatak na galing sa unprogrammed funds, unreleased appropriations o galing sa personal savings. ‘Pag inipon mo lahat ‘di mo makilala saan galing. Alam natin magkano pero ‘di masabi ang inilagay sa housing project, tulay ay galing dito kasi ang pera pag hinalo mo, pareho lang.” 

(The money has no sign whether it came from unprogrammed funds, unreleased appropriations or personal savings. If you put it all together, you won’t know where it came from. We just know how much it is but we cannot say that this money went to this housing project or this bridge because the money is commingled.) 

At best, Abad said what can be done is to identify the sources of the funding and the projects under DAP. 

Ona, Abaya grilled, too

Besides Abad, Transportation Secretary Joseph Emilio Abaya and Health Secretary Enrique Ona also faced questions from Binay on DAP projects on stalled projects of the Department of Transportation and Communications (DOTC) and stem cell research.

“You know a few months back, I was at Vicente Sotto hospital, 3 mothers and 3 babies were sharing a bed. Didn’t you think it would be better to buy hospital beds than use the money for stem cell research? You know that P70 million, that’s already 1,400 beds,” Binay told Ona.

The health secretary responded that the department is “balancing” the different needs of the health sector. He added that research for stem cell also involved other purposes like for lung cancer and pulmonary diseases done by the Lung Center.

Binay also rejected the Cabinet secretaries’ explanations on why they changed decisions on procurements at the middle of the year, after the passage of the budget.
“It appears there was no foresight when it comes to planning and budgeting,” she said.

Binay questioned the move of the DOTC to “withdraw” projects which it had sought funding from Congress under the General Appropriations Act – totaling over P14 billion ($323.25 million) in a span of two years – including the rehabilitation of the Ninoy Aquino International Airport Terminal 1, and seaports and lighthouses.

Senator Francis Escudero, chair of the Senate commitee on finance, agreed with Binay and read the portion of Abaya’s letter to the Department of Budget and Management (DBM) on the withdrawal of the projects funded under the GAA.

“I think the question is on the part of Congress, why did the Executive  propose that to begin with, only to tell the Secretary of DBM halfway through the year, ‘Get this;  we can’t use it all.’ Why was it proposed to begin with and then reallocated to projects that Congress did not know about anymore?” Escudero said.

He added that the  Aquino administration remedied this problem through line-item budgeting starting from the 2014 budget.

Abaya explained that when the DOTC asked for funds for the NAIA 1 rehabilitation, it did not anticipate that the task would entail more than just cosmetic improvements for passenger comfort, as the facility was found to have structural issues with a different set of requirements.

“At the time I suppose, when the budget was crafted, it wasn’t imagined that structural issues would come up. We thought it would have been a plain rehab. These are developments that even the best of the secretaries couldn’t foresee during the time the budget war made,” he said.

Abaya also said the DOTC “lacks the organization and personnel to handle the budget that we have to push out all these projects” and is in the process of hiring more people.

“We commit that we will have it procured and bidded out by 2015,” he said. –

*$1 = P43.3

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