Budget Watch

Quimbo says listing project funds as ‘for later release’ is unconstitutional

Aika Rey
Quimbo says listing project funds as ‘for later release’ is unconstitutional

UNCONSTITUTIONAL? House Deputy Minority Leader Stella Quimbo asks House appropriations vice chairman Junie Cua on September 23, 2021 on the 'For Later Release' allocations.

House of Representatives

'I stand by my position na tila unconstitutional ito dahil ang power of the purse rests with Congress,' says House Deputy Minority Leader Stella Quimbo referring to tagging budgets as 'for later release'

Deputy Minority Leader Stella Quimbo said that withholding the budget of select projects under the General Appropriations Act is “unconstitutional,” as it diminished Congress’ power of the purse.

At the House plenary deliberations of the proposed P5.04-trillion budget for 2022, the Marikina 2nd district representative questioned the practice of placing projects under “For Later Release” (FLR).

“I stand by my position na tila unconstitutional ito dahil ang power of the purse rests with Congress. Na kung ano ang budget document na lumabas dito – at wala namang distinction between what is FLR or not – ay siya ring dapat na aprubahan o i-veto man ng Presidente. At kung anuman ang inaprubahan ng Presidente ay dapat i-execute [ng mga ahensya] – to the letter,” said Quimbo.

(I stand by my position that this practice seems to be unconstitutional because the power of the purse rests with Congress. That whatever budget documents come out here – and there are no distinctions between what is FLR or not – are what should be approved or vetoed by the President. And whatever the President approves, should be executed by the agencies – to the letter.)

Being placed under FLR essentially means that agencies need to submit necessary requirements to prove that a certain project is implementation-ready. Ultimately, releasing the budget for these projects is up for the President’s approval.

Projects that were inserted in the general appropriations bill (GAB) during congressional deliberations were typically placed under FLR.

The logic behind this, according to House appropriations panel vice chairman Junie Cua, is that projects that were not part of the National Expenditure Program (NEP) as submitted to Congress were not implementation-ready.

“Any amount over and above what was originally proposed by the DBM (Department of Budget and Management) ‘yon ang mailalagay sa FLR (will be placed under FLR),” said Cua.

Note that since 2019, GAAs have been signed into law as cash-based budgets, which means that the projects should be shovel-ready or implementation-ready.

Critics have pointed out that FLRs are pork barrel allocations. However, some lawmakers in the past also raised that necessary social welfare and health projects could not get the funding it immediately needs because of the prerequisites for FLR allocations.

During her interpellation, Quimbo raised that some P748 million under the Philippine General Hospital (PGH) were placed under FLR. This includes funds for mechanical ventilators which are used by COVID-19 patients.

Cua explained that it was not the DBM that decided the project to be placed as FLR, but “the agency” which is PGH.

Are budget deliberations useless then?

Quimbo argued that if congressional realignments will be placed under FLR, then would that make budget deliberations useless?

“Our budget for COVID-19 response is very low. The budget for vaccines and allowances for medical frontliners do not have funding. If Congress will be proposing increases to the Department of Health, then it will go to FLR,” Quimbo said.

She said that placing projects under FLR would appear, in effect, like a veto.

“It’s like our efforts in scrutinizing the 2022 GAB will be put to waste,” said Quimbo.

The Marikina lawmaker also pointed out that FLRs of some agencies are yet to be released.

“As an economist, I think this is a huge problem. As we all know, our economy is in a slump. The only way we can recover is for the government to spend,” she said.

Cua, as sponsor for the DBM’s budget, said that as long as agencies are able to submit the necessary documents, then their budgets would be released.

He then pointed to the agencies’ absorptive capacity.

“If they can’t implement it right away, even if you release the money, the cash would just remain dormant,” he said. “Of course, the government is also managing the budget deficit level.”

But speaking as a legislator, Cua said, “I really feel that it diminishes our effectiveness.”

Cua suggested “better coordination” between the legislative and the executive to ensure that congressional realignments would not be immediately regarded as FLRs.

“There is a need to look into the process. I think leaders of Congress would have to sit with the executive and the legislative so that we are already informed that if we increase the budget for certain items, the agencies will be able to implement it,” he added.

FLRs were a source of tension in 2020, which eventually led to the ouster of then-House speaker Alan Peter Cayetano.

Under the 2020 budget, some P280 billion in local infrastructure and development budget was placed under FLR, as these were alleged insertions made even before amendments were introduced to the budget bill.

Only half of the multibillion-peso allocation was released, with Cayetano allies allegedly getting the shares of their districts ahead of the others. The rest could no longer be released in 2020 as it was used for the pandemic war chest. The said projects were instead passed as part of the 2021 budget. – Rappler.com

Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.