A fiscally responsible Congress should cut deep the proposed P1.4-trillion budget for 2009, former budget secretary Benjamin Diokno said. This is in the light of observations that the macroeconomic assumptions and revenue projections underlying the proposed budget for next year, a pre-election year, are "too rosy" and overstated.
 
When determining what to cut, however, he advised lawmakers and concerned groups to look beyond the debt servicing funds. Because debt servicing funds are automatically appropriated anyway, such cuts turn out to be mere imaginary cuts, Diokno said, that in effect merely increase the president's authority to spend.
 
Instead, Diokno advised, lawmakers and concerned groups should "scrutinize every item in the budget and find out if it's really worthwhile." Anyway, the president can always ask for a supplemental budget if such is needed, and if the funds are available, Diokno pointed out.

Weakest Link
 
The way the economy is going, it is highly likely that government will not be able to meet its revenue targets this year (2008) and next year (2009), Diokno, a University of the Philippines economics professor, stressed during a forum on the national budget held Tuesday, September 9, at the UP National College of Public Administration and Governance.

Diokno, who served as budget secretary during the Estrada administration and as budget undersecretary during the Aquino administration, described revenue projection as "the weakest link" in the budget process in the recent years and projected that the tax revenue shortfall for 2009 could range from a low of 0.5 % of GDP to a high of 1.8% of GDP.
 
"Failure to meet the projected target is not as harmless as it appears," Diokno said. "It gives the president the authority to cherry-pick the programs and projects to fund, defer or downsize."
 
The way things are, Diokno pointed out, the practice of overstating the revenues has given the president the excuse to generate savings from certain departments while augmenting the budgets of certain departments.

Election Budget?
 
Such a practice effectively weakens Congress' power over the purse, according to Diokno as the president can choose which projects to fund and which not to fund, "oftentimes ignoring the desires of members of Congress."
 
Diokno noted the administration's practice of releasing funds only for the projects of administration lawmakers.
 
This is particularly important given that the 2010 elections are fast approaching. Next year's budget, Diokno noted, is an "election budget."
 
And this early, critics already noticed quite a number of lump sum appropriations in the budget that could be used by the administration to support its candidates in the 2010 elections.
 
Former Senate President Franklin Drilon who was also a speaker at the forum identified some proposed lump sum appropriations that may turn out to be the president's pork barrel, since their release depends on the "absolute discretion" of the president or the department heads.
 
This includes, among others:

• P3.344 billion  for the Malusog na Simula, Yaman ng Bansa Nutrition Program (National Nutrition council)
• P1.792 billion for the Malusog na Simula, Yaman ng Bansa Feeding Program under the Department of Social Welfare and Development  (DSWD)
• P5 billion for the Pantawid Pamilyang Pilipino Program also under the under the DSWD
• P1 billion for the National Targetting System (DSWD)
• P500 million Core shelter program (DSWD)
• P1 billion Kalayaan sa Barangay Fund (Special Purpose Funds)
• P1 billion Kilos Asenso Fund (Special Purpose Funds)
• P 2 billion Calamity fund (Special Purpose Funds – Office of the President)
• P800 million Contingent fund (Special Purpose Funds – Office of the President)
• P9.36 billion for the Ginintuang Masaganang Ani for Rice (Agriculture and Fisheries Modernization Fund)

Increasing the lump sum appropriations on an election year, according to Drilon, is like "bringing back Dracula to the blood bank." He warned of the possibility of another scandal similar to the one on the fertilizer funds involving former Department of Agriculture Undersecretary Jocelyn "Joc-joc" Bolante.

Preventing Impoundment
 
To tighten its control over the budget, Congress has to recognize that P1.4 trillion cannot be funded, Diokno said. "If revenue generation will be short by 100 billion pesos, why not cut (the same amount from the budget)? Why not identify low priority projects, because GMA does not release them anyway?"
 
"There should be no sacred cow: every budget item should be scrutinized and justified,"
 
But it should not end there. To address Malacañang's current practice of releasing funds only for projects proposed by her known allies, Congress should require the president to go back to Congress if she wants to make substantial changes to it due to certain contingencies, such as revenue shortfall.
 
A good model for this practice, Diokno says, is the Congressional Budget and Impoundment Control Act (1974) in the U.S. which requires the President to ask Congress for a rescission or cutback of appropriated funds for projects no longer considered necessary.