3% cap on unfunded budget items deemed flexible enough but overall restraint needed

THE Social Watch Philippines (SWP) advocacy called a 3% threshold for unprogrammed appropriations (UAs) in the budget as allowing for some flexibility but otherwise called for “restraint” in inserting unfunded budget mandates.

“SWP recognizes the need for some degree of executive flexibility in budgeting. However, this must be balanced by rational restraint, governed by transparent and accountable mechanisms,” SWP Senior Budget Analyst Alce C. Quitalig told BusinessWorld.

Budget Secretary Rolando U. Toledo has proposed a 3% cap for UAs in the national budget.

“SWP supports the 3% limit or cap for the allocation of UAs. The statement of Secretary Toledo is well-founded from the stipulation in the budget reform or modernization bills of the past and present Congresses,” Mr. Quitalig said.

Budget reform bills call for UAs “that do not exceed 3% of the total proposed expenditure, net of contractual, statutory, and other legal obligations in the programmed component of the General Appropriations Act.”

“Ultimately, programs that are genuine priorities should be funded under programmed appropriations within regular agency budgets. Emergencies and unforeseen needs can be addressed through existing contingency funds, agency reserve mechanisms, or — when warranted — a supplemental appropriations law,” he said.

He said that supplemental appropriations laws were passed for the automated election system in 2009 and for post-disaster recovery in 2014.

The SWP said UAs should be reformed and subject to stronger oversight.

“The immediate past budgets have shown that not all UA items were pork laden. Supreme Court jurisprudence on UAs as standby appropriations affirm their validity as a budgetary mechanism but only under strict conditions,” he added.

In particular, he said UAs should be supported by actual revenue surpluses or by realized foreign loan proceeds.

Separately, Joy G. Aceron, convenor-director of transparency group Government Watch, said the DBM should explain how limiting the UA to 3% can prevent abuse of discretion and corruption. 

“The call is to make the budget as a whole transparent, participatory, and accountable,” she said via messenger.

“The DBM should lay down a comprehensive plan to do that, starting with an analysis and reflection on how DBM allowed the flood control plunder to happen and what it will do differently for such corruption not to happen again,” she added. 

She said “piecemeal reforms” such as putting a UA threshold “would get us into trouble again.” — Justine Irish D. Tabile