Budget Watch

Lacson hits P469 B in lump sums, rehashed items in proposed DPWH 2021 budget

JC Gotinga

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Lacson hits P469 B in lump sums, rehashed items in proposed DPWH 2021 budget

Overpriced IT equipment: Sen. Panfilo “Ping” Lacson grills Philippine Health Insurance Corp. (PhilHealth) officials on the purchase of overpriced IT equipment during the Committee of the Whole Tuesday hybrid inquiry, August 11, 2020, on the alleged irregularities at the PhilHealth. (Joseph Vidal/Senate PRIB)

The public works department seeks fresh funding for past projects whose budgets were partially used for the pandemic. Senator Panfilo Lacson says this may be unconstitutional.

Senator Panfilo Lacson on Wednesday, September 9, questioned P469 billion worth of items in the proposed 2021 budget of the Department of Public Works and Highways (DPWH), which were in lump sums or were already funded in the 2020 national budget.

Upon initial scrutiny of the 2021 National Expenditure Program (NEP), Lacson said he found 2,933 “re-appropriated” items amounting to P73.5 billion under the proposed DPWH budget. These were projects funded under the 2020 national budget, but according to the budget department, the funds were realigned to the government’s response to the COVID-19 pandemic.

Lacson found another P396 billion in lump sums lodged in the proposed 2021 budget of the DPWH Central Office. These are projects whose individual components – and their costs – are not itemized in the budget proposal.

In total, Lacson said questionable programs, activities, and projects (PAP) in the DPWH’s proposed 2021 budget amounted to P469 billion.

The senator said appropriating this amount may be unconstitutional because, one, lump sums are expressly prohibited, and two, the P73.5 billion in items rehashed from the 2020 national budget should have been discontinued completely if they are to qualify for fresh funding. Instead, the 2021 NEP proposes only fractions of their original allocations.

The rehashed items in question also reveal a pattern, Lacson added. The proposed amounts in the 2021 NEP were roughly 10% of their original allocations in the 2020 General Appropriations Act (GAA), the national budget law.

For instance, an item for the Pangasinan-La Union Inter-Provincial Road worth P6.491 million in the 2020 GAA is proposed in the 2021 NEP for P649,000.

At the Development Budget Coordination Committee (DBCC) briefing with the Senate committee on finance on Wednesday, Lacson asked Budget Secretary Wendel Avisado to explain the issue.

“Even as we were trying to have these projects implemented, all of them, we were not able to do so because of COVID-19. They were part of the budget that was utilized to respond to the pandemic,” Avisado told the Senate panel, referring to the rehashed items.

“There goes our problem. We’ll be treading dangerous ground insofar as constitutional challenge is concerned,” Lacson said.

Citing an earlier ruling by the Supreme Court, Lacson said only savings from the national budget may be realigned for other purposes. Savings are derived if the project is completed, abandoned, or discontinued. In this case, the DPWH projects should have been discontinued if their funds were to be considered savings and then realigned to the pandemic response.

To be considered discontinued, a project should have been halted and its budget, realigned in full. Since the DPWH is proposing only fractions of the rehashed projects’ original appropriations from the 2020 GAA, it means they were not actually discontinued – and if so, no savings were generated.

If the funds for the rehashed projects were not converted into savings, it would be unlawful to have them funded again in the 2021 national budget, Lacson said.

Avisado cited the Bayanihan to Heal as One Act, which allowed the executive to realign items on the budget to efforts to respond to the COVID-19 pandemic. However, the measure still requires projects to be officially discontinued before the funds allocated for them can be realigned.

Lacson said whether or not the Bayanihan law covered the DPWH’s realignment of project funds, it still should have followed the Constitution, which states that only savings can be realigned for other purposes.

“Primarily because of the constitutional issues involved, I don’t think we should allow this when we finally pass the budget measure before yearend,” Lacson said.

Lacson said he would press the matter further when the Senate takes up the P666.5-billion proposed 2021 budget of the DPWH. The agency had the highest unused appropriations from 2019 – P83 billion – the senator noted.

“I would urge the DPWH through the Department of Budget and Management to submit to us a revised list of PAPs devoid of lump sums or reappropriated items before some enterprising people start realigning PAPs worth…P469 billion,” Lacson added.

The senator said he would propose to amend the Senate version of the 2021 national budget bill to “excise” items already funded under the 2020 GAA. – Rappler.com

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JC Gotinga

JC Gotinga often reports about the West Philippine Sea, the communist insurgency, and terrorism as he covers national defense and security for Rappler. He enjoys telling stories about his hometown, Pasig City. JC has worked with Al Jazeera, CNN Philippines, News5, and CBN Asia.