Press Release
September 21, 2011

TRANSCRIPT OF PRESS CONFERENCE OF SEN DRILON
After OP, OPAPP budghet hearing

We heard today the Office of the President and the agencies under OP. OP proper has a budget of P2,454,342,000. What is significant about the budget that was submitted are the findings of the CoA in the previous years. The latest CoA report on OP is in 2009. Ang actual disbursement sa biyahe nung panahon ni GMA nung 2009 ay P848.1 million for foreign travels. For local travels, actual disbursement is P92.5 million. In total, the actual disbursement for traveling in 2009 is P940.6 million. There are two issues that stand out. The allocation in 2009 under the GAA for traveling expenses in the OP was only P244.6 million. The CoA has findings that P594 million has remained unliquidated as of year end, including the unliquidated travel expenses. This demonstrates the lack of respect of the previous administration of the Appropriations Law. Notwithstanding the fact that only P244.6 million was budgeted for travel expenses, a total of P940.6 million was spent. This is the kind of impunity and abuse that is being committed insofar as the budget was concerned. There is absolutely no respect for the appropriations done. They just spent whatever amount they needed.

The other significant discussion was on the Pamana (Payapa at Masaganang Pamayanan) under OPAPP. We have noted that while appearing on the budget of the OPAPP, only P329 million appears as a budget for Pamana. Apart from the budget of Pamana under OPAPP, there are other items spread out for the same project in the other agencies. The total budget for Pamana is P1.902 billion spread out in DILG with P968.9 million, DSWD P586.7 million, OPAPP P329.3 million, and DAR P17.6 million. The issues revolved around the administrative cost of implementing this project. We have noted, with concern, that each of the agencies implementing this program would have it own administrative cost which we estimate to total approximately P150 million. We believe that this can be reduced substantially and devote more funds for the project. Moreover, we cannot accept the proposition that each project would have its own administrative cost. For example, the CCT would have a certain amount which would be allocated as administrative cost. For example, out of the present P22 billion for CCT program, about P4 billion is for administrative cost. When, however, the DSWD implements the Pamana, again there is an administrative cost of P87.9 million. Our point is we can minimize this administrative cost because we are using the same personnel. In other words, if the DSWD personnel would go to the field and implement the Pamana, he or she can also implement the CCT program or the other way around. So why are we having separate administrative cost for these two programs where we use the same bureaucracy. Remember that this administrative cost is on top of the regular MOOE that is budgeted for these agencies.

Second point in the hearing is our concern that these are lump sum appropriations. In other words, we cannot find in the National Expenditure Program the specification as to the projects for which these funds would be devoted. In the DPWH, when they budget for an amount, say, a road, they would specify the kilometer post where this road would be built, or they specify the bridge and the river where the bridge is going to be built so that you can monitor closely where the funds are being spent. In the case of Pamana, this is a lump sum appropriation and the specification would appear in some other document, not appended to the National Expenditure Program or the Budget Expenditure and Sources of Financing (BESF). Therefore, we have conditionally approved the budget of the OPAPP subject to the submission of two documents: a review of the administrative cost of the project and a submission of the specific programs which will indicate where the funds are to be used. These will be submitted to the committee on finance and our technical staff will sit down afterwards with the technical staff of OPAPP and incorporate whatever special provision or revision in the budget which will address the concerns of the committee.

Q: Where do you expect the money would go or where it went?

This is still for 2012. Among the issues we raised is the allocation is based for example on the areas identified as conflict areas in order to assist peace process. The question we raised is the basis of the allocation is geographic meaning conflict areas. On the other hand, the CCT for example of DSWD is based on a national housing targeting system meaning household target vs geographical target of Pamana. A household which is a beneficiary of CCT can be located in an area where the Pamana project is located. Specifically, for example, a Pamana project is for a water system, yung artesian well, in a barangay, it is possible that in the same barangay would be 5 beneficiaries of CCT. Duplication cannot be avoided but it is necessary because the needs of that particular locality would require government intervention. So duplication is not an issue as long as the project is properly implemented.

Q: 2012 lang ba magkaroon ng Pamana?

For the current year, it would appear that there was a fund which is being utilized from the savings of the OP. It is an ongoing project in the OP utilizing the savings of OP. starting next year, it would be a regular item in the budget because of the OPAPP will fall under what we call other executive offices. We will be able to examine it in detail vs the previous system where the OPAPP is just a program under OP.

Q: Sabi ni JPE walang engineering skills ang OPAPP...

Precisely the OPAPP does not implement. They enter into memorandum of agreement with implementing agencies. That is admitted.

Q: What happens if they fail to submit the required documents/reports?

They will submit, otherwise we will be compelled not to submit the item�at least the P329.3 million under the OPAPP under Pamana for approval by the plenary, although we required them to submit the programs for the entire P1.9 billion. If they do not submit this then the non-submission to the plenary of P329.3 million pertaining to OPAPP is an option that we can take.

Q: Is it possible that the specific projects of Pamana are already incorporated in the NEP of other agencies?

No.

Q: Sabi nyo po may ilang budget na kasama yung sa DSWD...

Pamana din yun.

Q: Isn't it possible na kasama na rin don?

Hindi, kasi geographic barangay specifics. So hindi naman magkadoble. Pwedeng magkaroon ng iba't ibang proyekto. Halimbawa ang kailangan ng isang barangay ay water system, magtatayo ng water system. Pagkatapos kailangan nila ng puericulture center, pwede ring magtayo dun pagtapos may CCT. A barangay can be the beneficiary of different programs so that a household beneficiary of CCT can be located in a conflict area which will also be the beneficiary of a water system and a puericulture center.

Q: Why allocate P329 million to OPAPP hindi naman sya implementing agency?

The P329 million is for barangays identified by the AFP as conflict areas.

Q: Yung Pamana projects under DILG, pag hindi rin nila i-submit ang specifics pwede rin ba ma hold?

Let us get to that point when they don't submit. Don't ask me to anticipate. I am sure that they will comply with our directive.

Q: Sa OPAPP, yung projects nila sa conflict areas pero ang DILG at DSWD saan ang basis nila?

Meron silang tatlong pillar: Pillar 1, Pillar 2 and Pillar 3.

Q: Magkano ang allocation ng foreign travel for PNoy sa 2012?

Maliit lang. Hindi ko na tinanong. But we can provide it.

Q: Will you support the resolution na nananawagan sa Palace to suspend MRT LRT fare hike?

Well, at the end of the day it's a fiscal issue and need for funds in our national treasury. It's either we increase the fare, or increase the taxes.

Q: Subsidy?

Kung subsidy, we need funds. Where do you think we'll get the funds? From taxes. That's the reality. Do not charge VAT, do not increase fare, fine. But the question we ask: we have to reduce the deficit, we have to have funds to subsidize. It's a policy issue. Where do you source the funds? Either you increase the fare or increase the taxes. you cannot pick this thing out of the thin air. That's the reality.

Q: Are there existing savings already?

If you look at the budget, we are on a deficit. The budget is just an authorization to spend. That's what a budget is all about. The authorization to spend this year, for example, is P300 billion more than the revenues that we have. That's why we are on a deficit and it can worsen. The fiscal prudence will dictate you have to reduce the deficit. There are ways to reduce the deficit: increase the taxes, maintain the subsidy at its current level, or reduce the subsidy and maintain the present tax rates. You have only one economic pie to distribute. How big that pie is the determining factor.

Q: So you are not in favor of the resolution?

I am not in favor. I am not in favor of the resolution because we have to look for funds. It's either we increase the taxes and maintain the subsidy in order to maintain our budget deficit. In other words, what I'm saying is; let's have new revenues and we can continue to subsidize.

Q: Yung timing, hirap na yung tao ngayon dahil sa kaliwa't kanang pagtaas ng presyo ng bilihin.

It's a policy issue. This administration believes that if we are able to reduce the subsidy we can provide more services to the poor.

Q: How about the renegotiation of contract or new loans pambayad sa utang ng MRT?

Loan is not a revenue. That is not a revenue stream because we have to pay that in the first place.

Q: Untapped yung sa Malampaya...

Yes the Malampaya is there and even with the Malampaya, we'll still have a deficit.

Q: It's not being used...

No, it's being used. That's precisely the complaint that we do not know where it is being used.

Q: Kasama ba sa pinoprogram for next year ang expected collection sa VAT on toll at irereduce na subsidy?

I cannot recall exactly that detail but certainly the subsidy goes into our deficit spending. In the US, they are quarrelling over the same issue. Cutting the subsidies which is part of the expense of the government and increasing the taxes. Exactly the same debate between the Republicans and the Democrats.

Q: Kailangan talagang gawin ito?

To me as long as you use the funds properly, there is an adjustment period. We are on the right track by using the funds properly.

Q: Basta ako ayoko ng VAT sa toll.

To tax is never popular. Natalo si Ralph Recto diyan. But kung walang VAT, our economy would be in shambles. Everybody objected to the VAT when that was being debated upon. But we were able to save the economy because of the VAT. Of course Ralph Recto lost his candidacy because of the VAT. But in fairness to him, he worked hard for the VAT because we needed it. Unfortunately the electorate did not agree with him.

Q: Meron na siyang bill para i-exempt sa VAT ang toll

It will go through the legislative mill. We will debate on it. The previous policy was to remove all exemptions. In the E-VAT, we removed the exemptions because these were leakages in the system. We removed the exemption on professionals--lawyers, doctors. Now, we are suggesting that there should be a reopening of this debate and remove the VAT on the toll. Let us debate on it because these are policy issues which Congress would have to decide upon.

Q: Unlikely na i-support ng Malacanang?

I cannot speak for Malacanang.

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