House of Representatives

P20 billion slashed from pension fund reignites Velasco, Cayetano allies’ feud

Mara Cepeda

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P20 billion slashed from pension fund reignites Velasco, Cayetano allies’ feud

HEATED EXCHANGE. Pictured here are Anakalusugan Representative Mike Defensor and Davao City 3rd District Representative Isidro Ungab.

File photos by Mara Cepeda/House of Representatives/Rappler

Representative Mike Defensor stirs the hornet's nest, but his speech attacking Speaker Lord Allan Velasco later backfires

Sparks flew at the Batasang Pambansa after allies of Speaker Lord Allan Velasco and his rival Alan Peter Cayetano clashed over the P20 billion removed from the 2021 national budget’s Pension and Gratuity Fund (PGF) for retired and uniformed personnel.

It was Anakalusugan Representative Mike Defensor, an ally of ousted speaker Cayetano, who stirred the hornet’s nest and stalled the plenary session on Monday, March 1. But his privilege speech attacking Velasco would later backfire on him.

Defensor wanted to hold Velasco responsible after only P152.9 billion was approved for the 2021 PGF, which was P20 billion lower than what was originally proposed by the Department of Budget and Management (DBM) when it submitted the national budget to Congress in 2020. 

The Cayetano ally cited DBM’s media statement in late January saying this P20-billion reduction in the PGF “largely affected” the payment of 2018 pension differentials for the retirees. 

“I now ask the leadership of the House, Speaker Lord Velasco: Why did this happen? Paano natin pinayagan na ang pension at gratuity fund ng ating mga pulis, ng ating mga sundalo, ng mga Coast Guard, ng mga taga-Bureau of Fire Protection, at mga jail guards ay mabawasan?” asked an impassioned Defensor. 

(I now ask the leadership of the House, Speaker Lord Velasco: Why did this happen? Why did we allow the pension and gratuity fund of the police, military, Coast Guard, Bureau of Fire Protetion, and jail guards to be reduced?)

Defensor then claimed this P20 billion was supposedly realigned to the Department of Public Works and Highways. Critics have long argued that infrastructure funds have become the new political currency in Congress ever since the Supreme Court ruled as unconstitutional the pork barrel or the Priority Development Assistance Fund.

Defensor also said he wants to take back his yes vote on the 2021 General Appropriations Act or the P4.5-trillion budget for 2021.

But House committee on appropriations chair Eric Yap said it was he, not Velasco, who should be held accountable for the P20 billion that was removed from the original PGF proposal. 

Yap said the money, along with other appropriations initially meant for other agencies, were realigned to fund various coronavirus pandemic response programs in the 2021 budget.

Yap also said he no longer consulted Velasco on these realignments to ensure that the budget would be passed on time. 

“Kaya po ako kinukuwestiyon lagi, hindi ko po tinanong kay Speaker Velasco kung puwede po bang tanggalin ito. Ako po ay nagdesisyon base sa tingin ko kung ano ang nakakabuti sa sambayanan,” said Yap.

(The reason why I am always being questioned is because I no longer asked Speaker Velasco if we could remove this. I decided based on what I thought was in the best interest of the country.)

Yap said his committee is now working on drafting a P40-billion supplemental budget to augment the 2021 PGF.

Velasco ‘blind?’

But this gave Defensor more fuel to question Velasco’s control in the House. 

“Marami po palang kaganapan at mga importanteng gawain, polisiya…and the Speaker is blinded and not aware, bulag po siya sa nangyayari. Eh nakakatakot po,” said Defensor. 

(So it turns out a lot of things are happening and there are many important policies…and the Speaker is blinded and not aware of what’s going on. That’s scary.)

The rivalry between Velasco and Cayetano – who were supposed to share terms as Speaker – had gripped the chamber in late 2020 and placed the 2021 national budget’s timely passage under peril. 

When Cayetano’s political maneuverings made him lose support in the House, Velasco unseated the Taguig congressman in a dramatic coup on October 12, 2020, during an unprecedented session held inside a sports club. 

Velasco and his allies then went on overdrive to successfully pass the 2021 budget on final reading 4 days later, giving the Senate ample time to scrutinize and approve the budget before it was sent to Malacañang for President Rodrigo Duterte’s signature. 

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Defensor’s speech backfires

Defensor’s privilege speech later blew up in his face when Deputy Speaker Isidro Ungab shifted the blame on the reduced retirees’ pension fund to no less than Cayetano and his ally, ex-deputy speaker Luis Raymund “LRay” Villafuerte. 

Ungab said the issues hounding the PGF now is allegedly rooted in the P70 billion that Cayetano and Villafuerte previously took away from the pension in the 2020 budget, which was passed when Cayetano was still speaker.

At the time, Ungab was still the appropriations panel chairperson. But Cayetano later kicked him out in March 2020 for supposedly sowing “intrigues” when rumors first swirled that Velasco was plotting to oust Cayetano.

Ungab would later be promoted as deputy speaker after backing Velasco’s coup against Cayetano.

On Monday, Ungab accused Cayetano and Villafuerte of making last-minute realignments worth over P209 billion to the bicameral conference committee report on the 2020 budget, including the P70 billion removed from the PGF. 

“And I have my records. Again, ‘di po ako nag-finalize nito. Sila ang gumawa nito. Ang binawasan, hindi lang po P70 billion; ang binawasan po P209.961 billion,” said Ungab. 

(And I have my records. Again, I wasn’t the one who finalized this. They were the ones who did it. They not only removed P70 billion; they removed a total of P209.961 billion.)

Other Cayetano allies jumped in to do damage control, such as Laguna 1st District Representative Dan Fernandez and Bulacan 1st District Representative Jose Sy-Alvarado. 

They glossed over Ungab’s allegations in their manifestations and cited figures on how many retirees would be affected by the slashed P20 billion that Defensor was initially questioning. 

Villafuerte also took the floor to say that Ungab’s allegations against him and Cayetano were “unfair.” The former deputy speaker for finance insisted Ungab had full control of the 2020 budget.

“It’s unfair that a former chairman names a former speaker and former deputy speaker when he was the one fully in charge of the budget…. I think it’s unfair to point fingers when sila po ang nasa posisyon (they are the ones in positions now),” said Villafuerte. 

In a separate media statement, Villafuerte categorically said “there was no such push by the then-speaker or by myself at the bicam committee talks for the 2020 GAA bill.”

He said if such a move had happened, then it was “probably initiated by the Senate.”

The heated exchange between the Velasco and Cayetano allies effectively stalled the House’s agenda for Monday’s session. This includes the scheduled plenary debates on the proposed charter change resolution, which was penned by Velasco himself.

Lawmakers’ interpellations on Defensor’s privilege speech dragged on for over 3 hours on Monday before the plenary was able to resumes its original agenda for the day. –

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Mara Cepeda

Mara Cepeda specializes in stories about politics and local governance. She covers the Office of the Vice President, the Senate, and the Philippine opposition. She is a 2021 fellow of the Asia Journalism Fellowship and the Reham al-Farra Memorial Journalism Fellowship of the UN. Got tips? Email her at or tweet @maracepeda.