MANILA - Malacanang clarified on Thursday that the President's Special Purpose Fund (SPF) contained in the proposed 2015 expenditure program is not in any way an "unlimited pork barrel" as feared by some lawmakers.
Communications Secretary Herminio Coloma Jr. explained that based on established management practices, it is customary that a certain portion of the annual budget is set aside for contingency purposes.
He said the national government, which is the largest corporation in the Philippines, follows such best practice in establishing the SPF totaling P501-billion.
Out of this amount, P378-billion are programmed appropriations while the P123-billion are unprogrammed appropriations.
How does Malacanang define programmed appropriations?
Coloma said, "These are appropriations for which the availability of funds has already been determined and assured. Those that are unprogrammed will be appropriated only if there are additional sources of revenue or excess of revenues over projected revenues, new loans, new loan proceeds and other new sources of revenue.”
A breakdown of the P378 billion in programmed appropriations given by Malacanang is as follows:
- Calamity Funds - P14 billion
- Contingency Funds - P2 billion
- International Commitment Fund (used to pay obligations to the United Nations and other international organizations) - P7.4 billion
- Pension and Gratuity Funds - P140.6 billion
- Miscellaneous Personnel and Benefit Fund (these are for the vacant and unfilled positions and for the performance-based bonus, bonuses, and othert incentives) - P118 billion
- E-Government - P1 billion
- Rehabilitation and Reconstruction - P1 billion
- Budgetary Support to Government-Owned and -Controlled Corporation (GOCC) such as PhilHealth, Napocor, and others - P62.7 billion
- Allocation to Local Government Units - P33 billion
For the unprogrammed appropriations, Coloma enumerated the following as the major components:
- Budgetary support to GOCCs - P5 billion
- AFP (Armed Forces of the Philippines) modernization - P10 billion
- Equity buyout of the Metro Rail Transit Corporation - P53.9 billion
On the list is an allocation of P10 billion for the AFP Modernization Fund. Malacanang said this is considered under the caption “unprogrammed appropriation.”
"If you will look at the Department of National Defense (DND) budget, there is already an allocation of P5 billion. So P5 billion would be on the DND proper and P10 billion is on the special purpose funds under unprogrammed," said Coloma.
He also explained this is to fulfill the government's commitment of allocating a minimum P15 billion a year for the AFP modernization program. Since only P5 billion can be covered by available funds, the P10 billion was placed in the unprogrammed portion of the special purpose funds.
"So, as you can see, that is a specific appropriation for a specific purpose. The only reason why it is under special purpose funds is it will have to be drawn from unprogrammed funds or revenues that will still be realized," said Coloma.
Malacanang also pointed out that in the programmed appropriations of SPF, there is an allocation of P62.7 billion as budgetary support to GOCCs. In the unprogrammed portion, there is a further provision for P5-billion. This means the government will not be spending the P5 billion unless there are new revenues that are realized.
Coloma noted that availing the SPF involves close adherence to financial control and accountability measures.
He said this must be fully justified by the concerned head of department or agency and may involve vetting by the appropriate Cabinet cluster before being recommended for approval by the President.
Actual disbursement is subject to regular auditing rules and regulations, he added.
To promote inclusive growth, the biggest portion of the proposed budget is allotted to social services at P967.9-billion or 37.2 percent, he said.
He added the budget also focuses on delivering high impact projects in 44 provinces with the following characteristics: (a) high poverty magnitude where more job opportunities will be created; (b) high poverty incidence that require adequate social safety nets; and (c) those which are vulnerable to natural calamities.