Solon flags P2.189-T Special Purpose Funds in proposed 2023 budget

RG Cruz, ABS-CBN News

Posted at Sep 19 2022 10:01 PM

MANILA - A member of the Makabayan bloc flagged the Special Purpose Funds (SPF) in the proposed 2023 national budget amounting to P2.1895 trillion, which, as pointed out by the House of Representatives' Congressional Policy and Budget Research Department, is almost half of the P5.268 trillion National Expenditure Program.

"This is a tremendous amount that while some have a specific breakdown, others are questionable like that of the P10 billion of Barangay Development Fund under the P28.9 billion Local Government Support Funds (LGSF)," House Deputy Minority leader and ACT Teachers Partylist Rep. France Castro said in a statement.

"The interest payment for debt servicing is at P582.3 billion and the increasingly unsustainable Pension and Gratuity Fund (is) at P272.9 billion, the bulk of which goes to military uniformed personnel who are fully subsidized by the national government," she added.

Another allocation from the SPF is for Budgetary Support for Government Corporations (BSGC) at P225.5 billion, Castro noted.

"As it is, the SPF comes to almost half of the national budget and items under it can be considered as lump sums that have yet to be explained," she said.

Citing data from the NEP's Budget of Expenditures and Sources of Financing, the House's CPBRD said that the proposed allocation for SPFs in 2023 amounts to a total of over P2,189.5 billion, 6.3 percent higher than the current year’s P2,059.4 billion.

"Almost half (43.9%) of total SPFs are allocations to LGUs (ALGU) amounting to P962.2 billion. Even though there is a 14.5% (or P138.8 million) drop in the NTA/IRA (National Tax Allotment/Internal Revenue Allotment) due to lower collections in 2020, it is still the biggest contributor to ALGU with a budget of P820.3 billion in 2023. Note that the existing distribution formula of the NTA carries with it inherent inequities that will put some LGUs financially disadvantaged (especially in the light of new functions/services they have to assume)," CPBRD said in its Budget Brief on the Dimensions of the Proposed National Budget for Fiscal Year 2023.

The proposed P28.9 billion LGSF will cover the following: (1) Support to the Barangay Development Program of the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC), P10 billion; (2) Financial Assistance to LGUs (FALGU)10 and Support for Capital Outlays and Social Programs (SCOSP), P5 billion; and (3) Growth Equity Fund (GEF), P13.9 billion. 

Under the LGSF Special Provisions, the GEF will be used as financial assistance to the identified poor, disadvantaged, and lagging LGUs pursuant to the implementation of EO No. 138 (s. 2021) and its implementing rules and regulations (IRR) under DBM National Budget Circular No. 587 (s. 2022).

According to the CPBRD, each barangay cleared by the NTF-ELCAC will be allocated a maximum of P20 million for such projects as farm-to-market roads, school buildings, water and sanitation systems, health stations, electrification, agricultural and livelihood trainings/projects, and assistance to indigent families or individuals.

Meanwhile, FALGU will support the implementation of agriculture-related programs and projects, ICT systems and infrastructure development, construction, maintenance and/or rehabilitation of green open spaces, infrastructure for active mobility, and footpaths and walkways, and DRRM-related programs and projects.

Other purposes of the SPFs are for the following: (1) Interest Payment, P582.3 billion; (2) Pension and Gratuity Fund (PGF), P272.9 billion, and (3) BSGC, P224.5 billion.

Interest Payment has the second biggest allocation which increased by P69.7 billion or 13.6 percent in 2023.

The PGF posted the highest budgetary increment (nominal) amounting to P89 billion. Around 51.7 percent of total PGF will be used to pay for pensions of the military and uniformed personnel or MUPs (P128.7 billion), veterans (P10.9 billion) and civilian personnel (P1.6 billion).

Government Owned and Controlled Corporations get over P224 billion. 

The CPBRD notes that the proposed SPF for BSGC amounting to P224.5 billion is about 7.3 percent higher than in 2022, but lower than the 2021 level of P243.7 billon.

The think-tank said relatively bigger allocations can be traced to the following: (1) PhilHealth (P100.2 billion), for the insurance premium contributions of indigents, senior citizens, unemployed PWDs, and beneficiaries of the PAMANA Program; and, (2) National Irrigation Authority, P40.8 billion.

While the government proposes to allocate P28.7 billion for Net Lending in 2023, it also provides under Unprogrammed Appropriations an amount of P20.7 billion for the conversion of NG advances (for the servicing of GOCC loans) into subsidies.

The CPBRD said this writing off of GOCC payables to NG (through conversion of advances into subsidies) should be carefully monitored considering its implications on NG’s own cash position.

Meanwhile, the proposed Miscellaneous Personnel Benefits Fund (MPBF) amounts to P89 billion in 2023, or about 221.2 percent higher than this year's, largely due to the increase in the Funding Requirements for Staffing Modifications and Upgrading of Salaries which has a budget allocation of P65.3 billion.

SPFs cover expenditures for specific purposes for which the recipient departments/agencies have not yet been identified during budget preparation. These will be available for allocation to departments/agencies in addition to their built-in appropriations, curing budget execution, pursuant to special conditions.

Unprogrammed SPFs are provided to cover deficiencies, subject to availability of excess/unexpected inflow of revenues or financing sources. Unprogrammed Appropriations provide standby authority to incur additional obligations for priority programs when there are excess revenue collections, new revenue collections or loans.

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