i Report Online | House Opposition Seeks Caps on Arroyo's Spending Habits

12 DECEMBER 2008

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i R E P O R T — HOUSE OPPOSITION SEEKS CAPS ON ARROYO'S SPENDING HABITS

LUMP SUMS LIST

Like Guingona and Diokno, former Senate president Franklin M. Drilon believes that limiting the president’s power to withhold fund releases is an effective option to ensure accountability, transparency, and fairness in the budget process. In a forum on the budget last September, Drilon identified the following as some of the lump-sum items in the 2009 budget that the president or concerned Cabinet secretaries can spend at their discretion:

P3.34 billion - Malusog na Simula, Yaman ng Bansa Nutrition Program (National Nutrition Council)
P1.792 billion - Malusog na Simula, Yaman ng Bansa Feeding Program (Department of Social Welfare and Development)
P5 billion – Pantawid Pamilyang Pilipino Program (DSWD)
P1 billion – National Targeting System (DSWD)
P500 million – Core shelter program (DSWD)
P1 billion – Kalayaan Barangay Fund (SPF)
P1 billion – Kilos-Asenso Fund (SPF)
P2 billion – Calamity Fund (SPF-Office of the President)
P800 million – Contingent Fund (SPF- Office of the President)
P9.36 billion – Ginintuang Masaganang Ani for Rice (Agriculture and Fisheries Modernization Fund)

The Ginintuang Masaganang Ani or GMA banner programs of the Department of Agriculture under the Agriculture and Fisheries Modernization Act (AFMA) in particular has become a favorite reference of Guingona and other advocates of budget reform to illustrate abuse of the power of the purse.

In its 2007 report, the Commission on Audit (CoA) found irregularities in the GMA programs GMA Rice and Corn, GMA High Value Commercial Crops, and GMA Livestock, including:

P237.61-million loss or waste of government resources (which could have been prevented if risks were managed through timely devised guidelines, proper coordination with stakeholders, bidding on procurements, acquisition of equipment and farm implements suited to needs and timely delivered, compliance with MOAs and relevant regulations, and timely project progress monitoring and evaluations
P781.29-million unrealized benefits because projects were either delayed or not carried out due to weak enforcement of conditions to complete the project
P1.31-billion lack of audit trail due to failure of fund recipients to submit liquidation reports, incomplete or absence of master list of farmer beneficiaries, non-compliance with regulations, MOAs and standard procedures, and NGOs not found in stated addresses/local offices/residents
6.5 to 36 percent of sampled farmer beneficiaries in three regions (Regions 3, 4 and 7) did not receive the subsidized rice seeds/fertilizers from DA and denied the signatures appearing in the master list, while in Region 8, 624 kilos or 46 percent of 1, 345 kilos of rice/seeds for distribution were not accounted for.

Guingona says the anomalies that attended the GMA programs and other favored projects of the administration with lump sum appropriations can be repeated in 2009 and 2010 if the public will not keep a tight watch of how the monies are spent.

JOC-JOC'S WAY

The way he describes it, the lack of such a monitor made it easy for P728 million of government money to be allegedly distributed to administration allies for Arroyo’s 2004 presidential campaign against popular action film star Fernando Poe Jr.

Guingona says Bolante appeared to have an automated teller machine (ATM) card with a “bank” known as the Department of Budget and Management, which enabled the DA undersecretary to withdraw more than a billion pesos in just one week.

On Feb. 2, 2004, the DA requested the release of P728 million from the GMA program fund. Bolante got the money the next day, through Special Allotment Release Order (Saro) No. E-04-00164 for the purchase of farm inputs.

On Feb. 11, DBM issued another Saro, No. E-04-00294 for P1.102 billion requested on Feb. 9 to cover the implementation of the GMA Rice and Corn program.

The initial release of P728 million, Guingona says, came from savings of P970 million in the DA funds in 2003 for the GMA programs and were carried over to the 2004 budget. The bigger release of P1.102 billion came from the regular appropriation of P2.86 billion.

That explains the bigger allocation of P2.86 billion for the DA in 2004 compared to the re-enacted 2003 outlay of P2.56 billion. The GMA programs fall under the SPF/lump sum amount under the AFMA.

Guingona also points out that Bolante actually got P1.83 billion from the DBM in one week, just days before the start of the campaign period for the May 2004 presidential elections.

“The tragedy here is, Joc-joc Bolante did nothing illegal,” Guingona admits. “But is it moral? Is it ethical that P1.83 billion is released in one week during an election period? Something definitely smells fishy here.”

Guingona, though, clarifies that Bolante is finding himself in deep trouble for alleged manipulations in the distribution of the funds intended for farmers. There were substitution of beneficiaries, “ghost” deliveries of farm inputs, and other questionable ways to disburse the money.

In the 2009 budget, the DA allocation, including AFMA, totals P39.7 billion, representing a growth of 56.3 percent from the 2008 outlay of P25.4 billion. The DA was the third of five portfolio agencies with the highest budget increase in 2009, next to DSWD (up by 114.7 percent, from P.4.89 billion in 2008 to P10.5 billion in 2009) and Department of Finance (70.23 percent more, from P8.13 billion to P13.84 billion).

In presenting the P1.4 trillion budget proposal for 2009 to the Senate in September, Budget Secretary Rolando Andaya Jr. enumerated the DA priorities in support of the administration’s thrust for food sufficiency as: fertilizer, irrigation and other infrastructure, extension and education, loans, dyers and other post-harvest facilities, and seeds. These were the same items involved in the 2004 fertilizer fund scam and other GMA programs under the DA.

The 2007 COA report on the DA notes: “The good intention of the GMA Rice Program to reduce poverty incidence and attain national food security is tainted with weaknesses and irregularities in its implementation, reducing the effectiveness of the program.”

Advocates of budget reforms are saying that the only way to ensure judicious spending of the people’s money is for Congress to clip the president’s power to manipulate the budget process.

But the big question is: Will the president be willing to give up such a privilege that keeps her in power?

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