Wake Up, Philippines!

Graft due to Palace ‘holding power of purse’

Posted in Budget, Congress, Malacanang/Palace, power of the purse, Senate by Erineus on May 21, 2009

By Philip Tubeza
Philippine Daily Inquirer
First Posted 05:30:00 05/21/2009

MANILA, Philippines—Congress has practically abdicated the power of the purse to the executive branch, failing to scrutinize the annual national budget thoroughly and facilitating corruption in the process, a UN-financed study released Wednesday said.

Congress is given four months to debate the budget. But, more often than not, debates—particularly in the House of Representatives—deal not with policy but rather parochial concerns,” said the 2008/2009 Philippine Human Development Report (PHDR).

“Questions about agency performance are asked only intermittently and superficially. Cost estimates of budget proposals are rarely challenged,” said the PHDR, sponsored by the UN Development Programme (UNDP) and the New Zealand Agency for International Development.

“Weak accountability is facilitated by weak congressional oversight, not only in practice, but in law. In fact, it is the executive and not Congress that wields effective power of the purse,” said Toby Monsod of the NGO Human Development Network, which conducted the study. Monsod is one of the principal authors of the report.

81 excess undersecs, asecs

The 173-page report scored the presidential practice of making “political appointees,” noting 81 “excess” undersecretaries and assistant secretaries as of December 2007 costing the government P58 million a year.

It said 56 percent of the political appointees were “not eligible.”

The Office of the President also accounted for most of the “excess” officials (31), “of whom 89 percent were ineligible,” it said.

The report said Congress, entrusted with control of the purse by the Constitution, had failed to “adequately validate the performance of agencies or the consistency of proposed budgets with state policy.”

“While the budget intends to allocate funds for identifiable deliverables, it pays no attention to whether deliverables from the previous year(s) have been delivered or not,” the report said.

Unused audit reports

“Part of the problem is that audit and accomplishment reports of previous years are not used intensively during the budget preparation and debate,” it added.

The report said agencies were required by law to submit quarterly work and financial reports to Congress, Commission on Audit, Department of Budget and Management (DBM) and Office of the President.

“However, agencies fail to meet this requirement in a complete and timely manner, to the chagrin even of the DBM, the executive’s own budget oversight agency. Congress in turn fails to pursue the matter,” the PHDR said.

The report also scored the “imbalance in the power of the purse” with the executive branch able to “override the mandate of the General Appropriations Act.”

The executive branch does this by not releasing funds, transferring “unused” appropriations to “savings and using this amount for other purposes,” using “discretionary, intelligence, or confidential funds—over which the legislature officially has no oversight—as well as ‘unprogrammed’ funds in the budget.”

By deciding the level of debt service, Malacañang can significantly affect the “total amount of resources in play over the year,” the report said.

Huge Palace funds

Monsod, who presented highlights of the report at its launch, said the amount of presidential funds beyond congressional oversight was “overwhelming,” making the pork barrel of lawmakers “seem almost petty.”

In contrast to the graft-ridden pork barrel that averaged P8 billion from 2004 to 2008, the report said the one-liner appropriations or the “lump sums” under the control of the President amounted to P224.44 billion or 16 percent of the national budget in the 2009 National Expenditure Program (NEP).

“In the spirit of transparency, it is crucial to find out which of these one-liners are actually backed up by plans and programs or which simply serve as discretionary funds,” the report said.

Also “scattered” in the 2009 NEP are P1.12 billion in confidential and intelligence funds used “upon the discretion of the President and are not subject to proper audit.”

“Although one must assume the necessary secrecy in the use of these funds, it is possible to create appropriate oversight mechanisms,” the PHDR said.

Intelligence funds

The report suggested a bipartisan legislative select committee to exercise oversight over confidential, intelligence and similar discretionary funds “with the condition that the details of the use of these funds cannot be divulged to anyone outside of the committee in the interest of national security.”

“Weak congressional oversight over (foreign financial aid) and other funds, combined with inherently powerful spending powers of the executive has, unfortunately, also invited corruption, weakening government institutions even further,” the report said.

49 assistants, consultants

The PHDR also pointed out that the numbers of “presidential consultants/advisers (PC/PAs)” have “significantly” risen from 2002.

There were 22 presidential assistants in 2002, 39 in 2003, 44 in 2004, 37 in 2005, and 49 in 2008, the report said.

“The number has risen significantly since 2002 after a steady decline in the 1994-1998 period (the Ramos administration), a slight spike in 1999 (the Estrada administration) and a sharp decline in 2001. By the beginning of 2008, however, the number of PC/PAs had reached an all-time high of 49,” Monsod said.

Overlapping agencies

Monsod said the report noted that “overlapping bodies cause confusion and demoralization.”

“How, for example, are authorities defined between the presidential adviser on foreign affairs, the special adviser for energy affairs, and two presidential assistants for education, and the official Cabinet secretaries for these same portfolios?” she said.

“Even the designations themselves show confusion, for instance, as between the PA for job generation and the PA for food security and job creation,” Monsod said.

And there are the “task force on anti-smuggling” and the “presidential smuggling group to apprehend, seize, investigate and prosecute acts involving smuggling, unlawful importation and other similar violation,” she added. With a report from Rose Ann Samorin, trainee