Last year’s calamities eat into 2010 funds

(Editor’s Note: This story was first published by Newsbreak.)

MANILA, Philippines—The huge damage caused by the Typhoons Ondoy and Pepeng last year and the massive spending for the rehabilitation and reconstruction after that has depleted the national calamity fund for 2010, an official of the Department of Budget and Management (DBM) said.

Carmencita Delantar, director at the DBM, said that portions of the P2-billion national calamity fund for 2010 have been used for rehabilitation and reconstruction needed after the two typhoons ravaged the country last year.

The spending of calamity fund recently made headlines after Budget Secretary Florencio Abad revealed that 70% of the fund for the entire 2010 has already been spent in the first half of the year despite the absence of any major disaster.

“There was a spill over because of major calamities like Ondoy and Pepeng. For the typhoons that occurred in November and December, the reconstruction is somehow carried over [the current year],” Delantar said Thursday night on the show “The First 100 Days” aired on the ABS-CBN News Channel.

“Under the General Appropriations Act, there is a special provision that the P2-billion national calamity fund can be used for the calamities that occur in the current and prior years,” Delantar added.

Delantar said that the damage caused by the two typhoons was so massive that portions of the current national calamity fund have been used to sustain reconstruction and rehabilitation efforts in the affected localities.

National Statistical and Coordination Board (NSCB) secretary general Romulo Virola wrote in a column that the combined cost of damage brought by the two tropical cyclones reached P38 billion.

Delantar said that they are currently reviewing the provision that allow the use of the current year’s calamity fund for the damages incurred in previous years.

The national calamity fund is a lump sum amount included in the annual budget and is directly released to the departments, government agencies, and local government units upon the recommendation of the National Disaster Coordinating Council (NDCC) and approval of the President.

Since 2008, the Philippines has been allocating P2 billion for the national calamity fund.  Of this amount, P1.1 billion goes to aid, relief, and rehabilitation of the affected areas, while P850 million is allocated for rehabilitation of permanent structures and expenditures for pre-disaster operations.

Disaster-prone

Ronald Flores, director of the Office of Civil Defense, said that the P2 billion allocated as national calamity fund is not enough considering the number of disasters that hit the country every year.

The Philippines is along the Pacific Ring of Fire, an area where most of the major earthquakes and volcanic eruptions occur. Every year it is also visited by around 20 typhoons that cause landslides, floods, and damages to agriculture, infrastructure, and properties.

A 2006 study by the World Bank Independent Evaluation Group, “Hazards of Nature, Risks to Development,” estimated that 85.2%of the Philippines’ gross domestic product is at risk due to disasters.

The study ranked the Philippines 10th in terms of vulnerability based on economic risks from two or more disasters. Vietnam and Bangladesh ranked 5th and 9th, respectively, while Thailand landed on the 13th spot. Indonesia ranked 28th while China was on the 29th spot.

“Every year, we sustain on the average P8-10 billion worth of damage from the various disasters that happened,” Flores said. “Considering the P2 billion appropriated for the national calamity fund, naturally there will always be a deficit. Last year was extraordinary because we, at the NDCC, received request amounting to P90 billion.”

Insufficient local funds, too

Even the local calamity funds of local government units (LGUs), Flores said, are not enough to cover all the damage caused by the calamities.

“The local government units are the primary responders to calamities and their calamity fund is very miniscule so they usually rely on assistance from higher councils from the municipal, provincial, regional, and national disaster coordinating councils. Primary responding agencies like DSWD (Department of Social Welfare and Development) also helps and if neither is still not enough, the NDCC comes in using the national calamity fund,” Flores said.

The Local Government Code or Republic Act 7160 mandates local government units to allocate a portion of their regular revenue sources to expenses caused by calamities.

Section 324 of the LGC reads: “Five percent (5%) of the estimated revenue from regular sources shall be set aside as an annual lump sum appropriation for unforeseen expenditures arising from the occurrence of calamities: provided, however, That such appropriation shall be used only in the area, or a portion thereof, of the local government unit or other areas declared by the President in a state of calamity.”

RA 8185 amended a provision of the Code and allowed transferring the power to declare a state of calamity from the President to the LGUs.

Flores told Newsbreak that perhaps it is about time to review if the  5% estimated revenues allocated as calamity funds by the LGU is still enough to meet the needs of the localities.

Delantar, however, said that increasing the allotment of calamity funds of the LGUs will not be easy because it will have an effect on other items in the local budget like the salaries of government workers and capital outlay.

“You cannot increase it at the spur of the moment. This is good for first class LGUs because they have big revenues but what about the poor LGUs?” Delantar told Newbsreak.

Delantar added that funds for reconstruction can also come from other departments because it is included in their budgets.

“The Deped [Department of Education], for instance, has annual budget for repair of classrooms while DPWH [Department of Public Works and Highways] has allocation for repair and maintenance of roads,” Delantar added.

Disaster preparedness, too

Some local governments, Flores said, are not really aware of the guidelines on how they can use the calamity funds, especially on disaster-preparedness.

“There is a little confusion on the use of calamity funds based on our laws. Under the Local Government Code or RA 7160, and RA 8185, the use of calamity funds for preparedness purposes is blurred,” Flores said.

Flores said that although the DBM and the Department of the Interior and Local Government (DILG) signed a joint memorandum circular allowing the use of the fund for disaster preparedness programs.

Delantar said the Commission on Audit issued three months later a circular mentioning the guidelines on how LGUs can use the calamity for disaster preparedness.

“The circular was not taken seriously by local governments units because, according to local officials, the circular is inferior to national laws,” Flores said.

New law

Delantar and Flores said that the new law, Republic Act 10121 or the Philippine Disaster Risk Reduction and Management Act of 2010, tries to address the problems in funding disaster preparedness and response.

Flores said the new law, which was approved on May 27, 2010, mandates that LGUs can now set aide at least 5% of their estimated revenue from regular sources as local calamity fund. This provision is different from the 5% cap mandated by the Local Government Code.

RA 10121 also allows LGUs to use local calamity funds in pre-disaster preparedness programs like training, buying life-saving equipment, supplies and medicines; post-disaster activities and payments of premium from calamity insurance. – Rappler.com