Eco stimulus fund in 2009 budget may turn out to be hot air

Pronouncements by Congress that the budget it approved last week is the country’s biggest defense against recession may turn out to be nothing more than hot air.

The only way the administration can get its hands on the much-touted stimulus funds, observers say, is if the President does not veto deductions Congress made to the debt service interest payments—something Malacañang always does, like clockwork, every budget season.

Civil society groups that have been observing the budget process noted that the P10 billion that Congress appropriated for the stimulus package appears to have been sourced from deductions made to the debt service interest payments.

Initially, the sum of P287.87 billion was supposed to go to Debt Service Interest Payments under the General Appropriations Bill (GAB).

In the version of the budget that was reported out by the bicameral committee and subsequently approved by Congress, however, this amount was reduced to P252.55 billion or a difference of P35.24 billion.

Of this sum, P10.07 billion was subsequently realigned to the “Economic Stimulus Fund,” a new item under the Special Purpose Funds that is not part of the president’s original budget proposal.

The other top beneficiaries of the realignments were the Department of Public Works and Highways (DPWH, P9.36 billion); Department of Transportation and Communications (DOTC, P3.83 billion); and the Priority Development Assistance Fund (PDAF, P3.42 billion).

Administrative Veto

But the only way the administration can get its hands on the much-touted stimulus funds, observers say, is if the President does not veto deductions Congress made to the debt service interest payments.

Since the time of former President Aquino, Malacañang has traditionally vetoed attempts by Congress to reduce debt service interest payments on grounds that it encroaches on the constitutional guarantee of non-impairment of contracts.

The executive has also consistently maintained that the servicing of public debt, whether foreign or domestic should be automatically appropriated to ensure that the required amounts are available when they become due.

When Congress reduced the sum appropriated for debt servicing in last year’s budget, President Arroyo exercised her power to veto this line item.

An administrative veto was subsequently enforced on the items that were supposed to be funded through the reduction in debt service interest payment.

The imposition of the administrative veto meant that any changes Congress made to the budget will be subjected to review, according to former Budget Secretary Emilia Boncodin. Those sourced from the debt-service interest payments are not supposed to be released.

Boncodin, one of the founders of INCITEGov, a group of former senior Arroyo government officials which has been observing the budget process, explained that without this control measure, the budget appropriated by Congress would have exceeded the total sum proposed by the president.

This would violate a Constitutional provision that states that Congress “may not increase the appropriations recommended by the President.”

Options for Congress

One way out of this predicament is if Congress overrides the expected presidential veto, something which has not happened in recent memory.

“If the president vetoes the debt service, Congress should identify other possible sources of the funds (for the stimulus package),” according to former National Treasurer Leonor Briones, spokesperson for the Alternative Budget Initiative (ABI), another budget advocacy group.

Still another option is if the president submits a supplemental budget containing the proposed stimulus package. There is one requirement for this to be passed though: the National Treasurer will have to certify that the supplemental budget is backed by a new revenue source. “It cannot be from new loans,” Boncodin said.–GEMMA BAGAYAUA, abs-cbnNEWS.com/Newsbreak