NAGA CITY, 24Aug2013 – The clamor for the abolition of the congressional pork barrel has reached unprecedented levels, yet Kabataan Partylist Rep. Terry Ridon reminded the public that the issue “barely greases the pan,” as a bigger amount – the presidential pork barrel estimated to be worth more than P1.3 trillion – has barely been scrutinized.
“There has been lots of talk about the abolition of the Priority Development Assistance Fund (PDAF), without people realizing that in reality, this fund represents a miniscule portion of a larger mother lode – the presidential pork barrel. We’ve done some research, and we’ve found out that this bounty could be worth anywhere between P1.3 trillion to a maximum of P1.5 trillion, equivalent to more than half of the annual national budget,” Ridon said.
In a press briefing, the Kabataan Partylist legislative team presented a briefing paper entitled “Prime Cuts: Dissecting the presidential pork barrel,” wherein details of the more than P1.3-trillion presidential pork were listed and discussed. Presidential Pork Barrel Primer
“A cursory analysis of the government’s public expenditure system reveals the broad scope of the president’s discretion over public funds. It’s outrageous to think that most of these funds are under lax control procedures, thus giving a wide opening for various vulnerabilities,” Ridon said.
Defining pork barrel
To determine which public funds can be considered as part of the president’s largesse, Kabataan Partylist used the following definition for pork barrel:
It is a lump-sum allocation in the National Expenditure Program that is vulnerable to corruption and political maneuvering.
Funds of which the manner of allocation and disbursement are left to the sole discretion of the President and the Executive Department he leads, thereby leading to the funding of programs and projects that favor his select allies instead of directly financing social services such as education and health.
Public funds not reflected in the national budget yet are collected and used by public agencies particularly those in the Executive Department, with little to no financial oversight at all.
“Guided by the said criteria, we identified several large funds as part of the presidential pork barrel,” Ridon said.
The P1.3-trillion presidential pork for 2014 is composed of the following: lump-sum funds in the national budget, including the Special Purpose Funds (SPFs) worth P310 billion, Unprogrammed Funds worth P139 billion and Automatic Appropriations worth P796 billion; questionable in-budget line items including funds for intelligence and confidential expenses worth P1.4 billion, PAMANA funds worth P7.22 billion, Conditional Cash Transfer Funds worth P62.6 billion, and funding for Bottom-Up Budgeting worth P20 billion. The report also included funds from realigned savings and “hidden funds” worth anywhere between P56 billion to P113 billion.
“We included SPFs and automatic appropriations as both are lump-sum accounts that undergo little to no public scrutiny – even from Congress,” the youth solon said.
‘President tapping savings for extra pork’
Two of the glaring items in the list of the president’s pork barrel funds are funds from realigned savings and “hidden funds,” or funds from off-budget accounts that are not included in the national budget.
Due to certain provisions in the 1987 Constitution, particularly Article VI, Section 25 wherein the president, along with the Senate President, the House Speaker and heads of Constitutional Commissions are authorized to “augment any item in their in the general appropriations law for their respective offices from savings in other items of their respective appropriations,” the Executive Department can actually tap unused funds for “extra pork.”
DBM has, in fact, released a memorandum circular explaining the president’s power to reallocate savings. In National Budget Circular 541, DBM was empowered to “centralize” unobligated funds to “cover additional funding for other existing projects.” This resulted to the realignment of P75 billion unobligated funds from fiscal year (FY) 2012 and P27 billion from FY 2013.
“What does this broad fiscal power of the Executive entail? Simple – it means that the government can simply withhold parts of allocations of specific agencies for a particular year, tag these funds as “savings” and realign these funds to favored programs and projects. Being the department in charge with the preparation and eventual disbursement of the national budget, the Executive can thus have access to unlimited funds anytime of the year,” Ridon noted.
Another “outrageous” source of pork funds for the president are the so-called “off-budget accounts” (OBAs), or funds collected and utilized by government agencies but are not reflected in the annual budget documents.
Citing the World Bank, a study published by the US Agency for International Development (USAID) in 2009 revealed that OBAs represent less than 5 percent of the Philippine national budget each year. For 2007, it was estimated to be worth around P56 billion. Using the same percentage measure, this means that for 2014, it is possible that OBAs can clock in to about P110 to P113 billion.
“Aside from being virtually invisible in the national budget, the government does not provide an official list of OBAs. Thus we may call them the government’s ‘hidden wealth,’ as these funds are shielded from public scrutiny,” Ridon said.
The list of OBAs in the Budget of Expenditures and Sources of Financing is incomplete, and generally includes only funds that constitute the revolving fund of several agencies. According to USAID, there are more than 300 OBAs existing, with at least 367 accounts identified in 2007.
Some glaring examples of OBAs include the President’s Social Fund, an off-budget account sourced from the income of the Philippine Amusement and Gaming Corporation (PAGCOR) and Philippine Charity Sweepstakes Office (PCSO) which is utilized for priority projects of the president.
Under PAGCOR and PCSO’s charter, they are mandated to remit parts of their revenues to the Social Fund annually. PAGCOR estimates that it will be able to remit around P2.3-2.4 billion to the said OBA in 2014.
Another controversy-ridden OBA is PCSO’s charity fund, which is also utilized by the Office of the President as pork barrel.
According to the PCSO website, the charity fund is “a trust and liability account and is used exclusively to finance and support health programs, medical assistance and services and/or charities of national character. Presently, any disbursements from the Charity Fund must not only be authorized by the PCSO Board of Directors but must also be approved by the Office of the President, regardless of the amount thereof.”
PCSO is mandated by its charter to remit to the charity fund 30 percent of its gross receipts from the sale of sweepstakes tickets, including all unclaimed prize money. This means that for every one peso earned by PCSO from sweepstakes ticket sales, 30 centavos automatically goes to the charity fund.
According to the 2011 Annual Audit Report of the Commission on Audit (COA), PCSO has set aside P8.127 billion for the charity fund for the said year. COA noted that PCSO disbursed some P5.39 billion under the said fund for questionable expenses.
“Review of 2011 disbursements revealed that… expenses which are not related to health programs, medical assistance and services and/or charities or national character were charged to Charity Fund,” COA said.
“Overall, the total presidential pork barrel lies somewhere in between P1.3-1.5 trillion, which is anywhere between 58 to almost 70 percent of the total national budget. The very fact that we cannot ascertain the actual amount is proof of the pork barrel system’s circuitous and wily character. Imagine how much of those funds are lost to corruption, and go straight to the pockets of officials of the Executive Department, particularly the president himself,” Ridon said.
“With the components of the presidential pork barrel now clearly delineated, it would already sound silly to call only for the abolition of the PDAF. Doing so would be ignoring the elephant in the room,” he added.
“This only reveals that Aquino is not an innocent lamb who has nothing to do with the systemic corruption beleaguering our country. In fact, he’s the head of the pack, and actually keeps the keys to the outrageous mother lode,” Ridon concluded.