Reconciled budget bill done this month

Representative Lagman hopes meeting with Senator Enrile can help avoid reenacted budget for 2008

By Maricel V. Cruz Reporter

The bicameral conference committee on the proposed P1.227-trillion national budget for 2008 is expected next week to come up with a reconciled version of the measure to fast track its approval and prevent a reenacted budget.

Rep. Edcel Lagman of Albay, chairman of the House Committee on Appropriations, made this disclosure, saying he would meet with his Senate counterpart, Sen. Juan Ponce Enrile, shortly after January 7 to forge a reconciled appropriations bill. Lagman also heads the House panel in the Bicameral Conference Committee on the budget bill.

For Lagman, the disagreeing provisions of the House and Senate versions in the General Appropriations Act of 2008 “cannot be vanished instantly by a magic wand.”

Lagman said his meeting with Enrile will center on how much could be cut or reduced in the debt service allocation, and how much could be added to the budget for basic services like education, health, social welfare and development, agriculture, infrastructure, environment, energy, and national order and security.

Lagman said both houses would also craft the needed special provisions to ensure full implementation of congressional realignments and augmentations.

Both Lagman and Enrile have been authorized by their respective panels to work out a compromise version before both bran-ches of Congress resume session on January 28.

The compromise bill is still subject to formal confirmation by the Bicameral Conference Committee, and final plenary ratification by the House and the Senate assembled individually.

After the budget bill is ratified by both houses of Congress, it will be given to President Gloria Arroyo for approval.

The President, however, may choose to veto questionable line items, and her veto can only be overridden by a 2/3 vote of each branch of Congress.

More funds for state schools

In another development, Sen. Edgardo J. Angara, has identified the most outstanding of the 112 state universities and colleges (SUCs) in the country and pressed for the allocation of more funds to enable them to maintain their excellence.

Angara has sponsored a bill to provide more budget for the most outstanding SUCs, which in his list includes: the Mariano Marcos State University in Batac, Ilocos Norte; Central State University in Munoz, Nueva Ecija; Visayas State University in Baybay, Leyte; Aklan State University in Kalibo, Aklan; and University of Southern Mindanao in Kabacan, North Cotabato.

He did not mention anymore the University of the Philippines and the Philippine Normal University among the outstanding SUCs “because they are a class by themselves.”

These SUCs have varying standards and stages of development, but Angara “characterized them as outstanding because of their notable research and development output, their international linkages with some of the leading universities in Asia, Europe and the US, and the commercialization of their inventions.”

He also lauded the five universities for producing outstanding agricultural and technological graduates, as well as research and development projects and outputs.
--With Efren L. Danao

Andaya: Arroyo ready to veto budget over P17B insertion

Andaya: Arroyo ready to veto budget over P17B insertion

By Lira Dalangin-Fernandez - INQUIRER.net

President Gloria Macapagal-Arroyo is prepared to veto the 2008 budget if the House of Representatives insists on taking P17 billion from automatically appropriated debt servicing funds and diverting this to various projects, Budget Secretary Rolando Andaya Jr. said Thursday.

At the same time, Andaya denied claims by some senators about the supposed P30-billion presidential pork barrel, saying it does not exist.

What the president has been allotted is an P800-million contingency fund, a standby fund for emergency expenditures that is subject to audit, Andaya said.

Andaya said allowing the House insertion would incur "legal problems and fiscal risks because you don’t have the cash to pay for the P17 billion. Where will you get the money for this?"

He did not say where the P17 billion is supposed to go to, only that it was intended for various projects.

"Malacañang has nothing to do with this," he said, adding that he has already communicated the Palace’s request to take out the insertion to the respective finance committee heads of the House and the Senate.

But if Congress insists on the insertion, he said Arroyo might be forced to veto the budget.

"This early, we are giving the signal already about what action [Malacañang] might take if they insist,” Andaya warned the two chambers, which are meeting to reconcile their respective versions of the budget.

Because of the automatic appropriation of funds for such items as debt servicing, the Internal Revenue Allotment of local governments, and life insurance premiums, Andaya said what Malacañang is actually asking for is only about P770 billion of the proposed P1.277-trillion 2008 budget.

Andaya said the government will have to operate on a reenacted budget, at least for the first quarter of 2008, after Congress failed to pass the budget before going on Christmas break Wednesday.

But he said Arroyo wants a new budget to fund key projects and increase appropriation for social services.

He also said that, contrary to the claims of some senators, the administration has increased funding for health, by P5 billion, and education, by P17.8 billion.

‘Nothing illegal about bonuses’--Andaya

By Christine Avendaño, Norman Bordadora
Philippine Daily Inquirer

MANILA, Philippines -- Saying the House of Representatives has fiscal autonomy, Budget Secretary Rolando Andaya Thursday said that the House can grant each congressmen the P200,000 in staff bonuses this Christmas.

Andaya said the House did not violate anything by granting the bonuses to its employees.

“They’re fiscally autonomous. The funds for these are strictly from their own,” Andaya told reporters in Malacañang.

Because of its own system, the House like the national government can grant bonuses, he explained. He said, recently, the Palace granted up to P10,000 in performance bonuses to all government employees.

Asked how the House will get its funds for the bonuses, the budget secretary said: “Remember that when you are fiscally autonomous, you have the power to realign, you have power of savings, power of recommendation.”

“So you can actually readjust your budget to suit the needs of your members but of course within your ceiling,” Andaya said.

Meanwhile, Andaya said his department had already released the P7,000 the national government will shell out as performance bonuses to government employees.

“Government employees should get their bonuses by now,” he said.

In late October, only members of the majority allegedly received cash gifts of as much as P500,000 each when they went to Malacañang for a breakfast meeting with President Macapagal-Arrroyo.

But this time even members of the House opposition also received the P200,000 in staff bonuses, a member of the militant bloc confirmed Thursday.

Palace, not Congress, holds power of the purse

By Efren L. Danao, Manila Times Senior Reporter

Congress prides itself in wielding the so-called power of the purse—or the power to appropriate. This congressional power is now a myth.

During the pre-martial law Congress when the chairman of the House Committee on Appropriations was a very powerful personality, the legislature wielded true power.

Today, however, the real power of the purse rests with Malacañang.

The House had just approved after a marathon session the proposed 2008 national budget totaling P1.227 trillion. The hard work exerted by Speaker Jose de Venecia and the House Committee on Appropriations headed by Rep. Edcel Lagman of Albay is commendable. For the first time in eight years, the House approved the national budget on second reading on the second week of October.

The House reviewed the priorities in the budget proposed by Malacañang and reallocated P30.1 billion to increase the budget for education, books, desks, scholarships and school buildings, among others. The House and the Senate for that matter—can cut and augment the individual budget of various government offices as long as it does not go beyond the total budget proposal of the President for the entire national government.

The budget process, however, goes beyond the mere enactment of the general appropriations act for a fiscal year. Funds must still be released from the National Treasury for the purposes stated in the annual budget, and this is why Malacañang, not Congress, holds the real power of the purse. Malacañang has the authority to deny funding even for items already contained in the budget act.

Source of power

Sen. Edgardo J. Angara, a fiscal authority in the Senate, points to Presidential Decree 1177 as the main reason why Malacañang continues to hold sway over the budget since the martial law days.

P.D. 1177 was promulgated by then-President Ferdinand Marcos on July 30, 1977, ostensibly to institutionalize the budgetary innovations of his New Society program. The decree, ironically called the “Budget Reform Decree of 1977,” grants the president the authority to transfer any fund appropriated for the different departments included in the general appropriations act after its enactment.

It also grants the president the authority to augment any appropriation of the executive department in the act from savings in the appropriation of another department, bureau, office or agency within the executive branch.

Among the progressive sectors, the greatest “evil” wrought by P.D. 1177 is its provision for the automatic appropriation for debt servicing. The decree lumps principal and interests on public debts and national government guarantees of obligation with personnel retirement and GSIS premiums as automatically appropriated except as issued in the form of regular budgetary allotments. There is no quarrel in the automatic appropriation of retirement benefits and GSIS premiums—but debt servicing and government guarantees on loans?

Hands of Congress tied

Many do not know it but Congress actually has no say on debt servicing. It is not part of the cash budget subject to congressional approval. The “cut” of P17.8 billion from debt servicing was the result not of a new-found power of the House but of the continuing appreciation of the peso. If the peso declines, the national government has no choice but to pay the equivalent amount—despite the “cut” by the House.

Angara recalled that during the days of Batasang Pambansa or parliament, the opposition flailed away at P.D. 1177 for clipping the powers of the legislature. Then Member of Parliament Alberto Romulo said the legislature and the people were “na-onse” (duped) by P.D. 1177. Yet, when Romulo became budget minister in 1986 under the Cory administration, he made full use of the decree.

In fact, all presidents after Marcos continue to implement P.D. 1177 by transferring funds from one department to another and refusing to release funds for projects proposed by political enemies.

“I guess Malacañang does not want to lose such a great power,” Angara said on why the executive department is keeping this controversial law of martial law vintage.

Congress tries to correct

Angara said there were previous attempts by leaders of the House and the Senate to prop up the legislature’s power of the purse by pressing for line-item budgeting. Speaker de Venecia and former Senate President Franklin Drilon led the move for line-item budgeting. They said it would make the budget more transparent and, more important, assure that funds are spent only for the item specified. Malacañang opposed the move and nothing has been heard of it since.

As long as P.D. 1177 is in the statute books, complaints of lawmakers, especially members of the opposition, on the non­release of their “pork barrel” or the inadequate funding for their projects will be met with a cold shoulder by Malacañang. Insofar as the budget is concerned, Malacañang proposes, and Malacañang disposes.