The devastation wreaked by typhoons Ondoy and Pepeng has triggered a frenzied search for funds to finance the necessary rehabilitation of destroyed facilities as well as assistance for typhoon victims. The two houses of Congress were informed by NDCC Chair Gilberto Teodoro that the P2 billion Calamity Fund managed by the Office of the President through the Department of Budget and Management is down to a measly P29 million.

Both the Senate and the House are seriously contemplating the passage of a supplemental budget of P10 billion to augment the depleted fund. The Alternative Budget Initiative, a network of more than 60 civil society organizations convened by Social Watch Philippines has stated that a supplemental budget is not necessary. What is needed is to tap the unspent balances of the Special Purpose Funds and Overall Savings account to augment the Calamity Fund. However, both houses of Congress need to be informed about these transfers since the appropriations act was passed by them.

The calamitous state of the Calamity Fund

Even during the pre-Ondoy and pre-Pepeng periods, the Calamity Fund has a history of being depleted and augmented from various funds. The practice is for the Office of the President to transfer funds from various sources to operating departments purportedly in charge of overseeing disaster relief and rehabilitation.

In 2008 for example, the Department of Budget and Management reported that the new general appropriations stood at P2.152 billion which included P152 million from the previous year’s reenacted budget. This amount was augmented by continuing appropriations for capital outlays and unreleased MOOE, also from the reenacted budget, in the amount of P2.484 billion. Thus, available appropriations in 2008 totaled P4.636 billion.

Furthermore, this amount was augmented by transfers to the Calamity Fund from the Overall Savings account in the amount of P1.856 billion. Theoretically, more than P6 billion was available for the Calamity Fund.

To whom were the funds of the Calamity fund transferred in 2008? Eleven departments received transfers from the Calamity fund. The big ticket items among the recipients include the Department of National Defense at Ph1.469 billion plus P120 million for the Office of the Secretary; Department of Public Works and Highways at P1.773 billion; Department of Agriculture for P836.4 million; Department of Social Welfare and Development, P614.5 million; and “special financial assistance to local government units” for P620.6 million.

Other departments which have received transfers from the Calamity Fund are the Departments of Education , Health, Interior and Local Governments, Labor, Science and Technology, and two state colleges in Leyte.

In addition to the regular departments, the National Housing Authority received P250 million while the Philippine National Railways P375 million. Until I saw this transfer, I was not aware that the PNR was in a state of calamity in 2008!

There are smaller but curious transfers like P120 million for the Philippine Veterans Affairs Office and P1 million for the Military Shrines Service. Were they also victims of calamities?

Now, it is said that the 2009 Calamity Fund is down to P29 million from a starting balance of P2 billion. This starting balance does not include transfers and augmentations which were made during the course of the year.

Accounting for the Calamity Fund

Before dashing off another supplemental budget Congress, with the support of media and civil society, must demand for an accounting of the 2009 Calamity Funds as of end September. How much in new appropriations and continuing appropriations were pooled in the Calamity Fund? How much was transferred to the Calamity Fund?

Equally important, who were the recipients of transfers from the Calamity Fund? Are these agencies directly involved in relief and rehabilitation from calamities?

Financing the Calamity Fund

A supplemental budget, while seemingly heroic on the part of Congress, will only increase the level of the deficit which is already at dangerous levels.

Mention has already been made of existing funds like the SPFs and Overall Savings account.

While Congress is in a hurry to pass the 2010 budget, it must take time to review the status of the 2009 Calamity Fund, as well as the proposed expenditure items in 2010. The latter is proposed to ensure that duplication, waste and double charging of expenditures will not go unnoticed.

How about the MVUC funds?

Sen. Miriam Defensor Santiago has proposed that the MVUC funds should be tapped. This is the Motor Vehicles Users’ Charge. MVUC funds are not included in the national budget. It is managed by a board headed by the DPWH secretary. Unlike other revenue raising agencies, it does not have to chase its clientele to raise revenue. Every day of the year, MVUC receives income from car registration. Registration for new cars are collected three years in advance.

MVUC income is supposed to fund the maintenance of roads, etc. It would be the understatement of the year to say that all the roads destroyed by calamities need maintenance!

Is a supplemental budget the answer to the state of calamity in the Calamity Fund? Obviously not.