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17th Congress of the Philippines: Will laws remain unfunded?

Aika Rey
17th Congress of the Philippines: Will laws remain unfunded?
The Congress that has made the most number of empty promises, so far, is the 15th Congress. How will the 17th Congress fare?

MANILA, Philippines – In 2013, Senator Francis “Chiz” Escudero landed in the headlines when he announced that some P500-billion worth of laws remain unfunded. 

In a statement, Escudero said that the enactment of a law is meaningless if no budget is alloted for it. In effect, they would be nothing more than empty promises.

Data from the Department of Budget and Management (DBM) show that P125.1 billion ($2.65 billion) worth of laws remain either without funding or with insufficient sums.

A third of these laws are lodged under education and health sectors. Of those measures, most involve the creation of schools in Northern Mindanao and increasing bed capacities in hospitals.

It’s a significant improvement from the way things were back in 2013. But as the 17th Congress convenes, will the list grow longer or shorter?

We examined laws passed since 1991 and give you the lowdown on types of measures that make it through the legislative mill without benefit of financial scrutiny. 

Unfunded

According to the legal division of the DBM, a total of 133 laws remain either partially funded or not funded at all.

The table below shows the inventory of unfunded laws passed since 1991 up to October 2015.

To navigate, scroll left or right to see the rest of the columns. Click next to see the rest of the laws.

On the spreadsheet, you will find the features of each law, when each of them was passed, as well as the status of funding.

Of the unfunded measures, only 31 laws specified budgetary requirements. The rest were categorized either as laws with non-quantifiable requirements or with unspecified budgetary requirements.

Of those with specified requirements, the total funding deficiency totals P125.1 billion ($2.65 billion). This status already reflects actual funding releases and allocations under the 2015 and 2016 budgets.

In a statement by the DBM legal division, the 2015 funding deficiency was 18.9% lower than the 2014 figures at P154.2 billion ($3.27 billion).

Empty promises

If passing laws without financing sources is akin to making empty, meaningless promises, then one could say the Congress that has made the most number of empty promises is the 15th Congress. 

According to the data, 88 of the 133 laws cited by the DBM were passed during the 15th Congress. Half of these fall under the education sector. Most involve the creation of new schools.

There are also quite a number of laws related to infrastructure which have no funding. Most of these pertain to the conversion of local roads to national roads.

These laws remain unfunded until their district public works offices propose funding requirement, the legal division said.

Meanwhile, those that fall under the health sector are mostly about increasing the bed capacities of hospitals. These were to be sourced from local government funds. (See spreadsheet above)

Fiscal responsibility

In an interview, former DBM Secretary Florencio “Butch” Abad explained that lawmakers who introduce bills with a spending measure should always indicate where the funding will come from.

“You have to start from the principle of fiscal responsibility,” said Abad. “If you propose a spending measure, because not all bills call for spending, fiscal responsibility dictates – you have to identify how you are going to fund that spending measure.” 

Without this, Abad said, laws without financing will accumulate.

Financing is typically sourced either from tax or non-tax sources. If current sources are not enough to cover the proposed measure, the lawmaker has to identify where he is going to borrow money, Abad said.

“When we submit a budget, 98% has a source, which are either tax or non-tax revenues. If it’s not enough, then you have to be on deficit. Then you have to identify, how you are going to raise deficits by way of debt,” he added. “Congress has to do that also.”

From the list specified, 102 laws do not even specify funding requirements, while 22 were identified to have non-quantifiable requirements.

An example of laws where requirements are “non-quantifiable”, according to the DBM, is RA No. 9994, which grants additional benefits and privileges to senior citizens. 

Abad said that it all boils down to identifying where a spending measure should be sourced from and how much it costs. In an ideal world, he said, a lawmaker should propose an increase of taxes to provide for the proposed new spending measure.

He cited the amended Sin Tax law as an example of a law where programs for livelihood and health care have a definite source of funding – the revenue coming from sin tax. 

Parochial interests

To a large extent, unfunded measures proliferate because legislators are typically driven by parochial interests and the need to woo their local constituencies.  

In the case of schools which make up most of the unfunded laws, for instance, congressmen typically only want to be able to tell their constituents that the law has been passed. How to find money to fund the law is left up to the executive. 

“They really don’t think about the source of funding,” Abad said.  

Congress has also been prone to creating additional bureaucracies. This can be a problem, Abad said, because funds get eaten up by administrative expenses, which is not good use of money.

“The problem with creating bureaucracies is that it will be so hard to stop it. It will have a life of its own,” said Abad.

Synergy

The proliferation of unfunded laws is an issue which the proposed Public Financial Management Accountability Act seeks to address, the legal division said.

The bill aims to strengthen Congress’ power to scrutinize the executive agencies’ budget performance. In that way, there is closer coordination between the legislative and executive.

In 2015, former Senate President Franklin Drilon and Senator Ralph Recto both introduced similars bills as part of the proposed budget reforms. The bills, however, were not passed during the 16th Congress.

Since July 4, the Bills and Index Service of the House of Representatives has started to accept bills.

Last Monday, July 25, marked the first joint session of Congress.

Will our lawmakers be more fiscally responsible or will they go back to bad habits of passing measures without thinking of where the money will come from?– with research by Ysh Nacino/Rappler.com

*$1 = P47.135

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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.