Press Release
March 29, 2008


Senate Minority Leader Aquilino "Nene" Q. Pimentel, Jr. (PDP-Laban) today questioned President Gloria Macapagal-Arroyo's veto of section 97 of the general provisions of the GAA which states that the P1.227 trillion national budget shall take effect on Jan. 1, 2008 although she signed the GAA only on March 11.

Instead of following the congressional intent for a retroactive application of the GAA, the President directed that it will become effective 15 days following its publication in the Official Gazette.

"The implication is that the delay will allow her to suck up all allocations for abandoned or finished projects of the fiscal year 2007 and spend it freely without the inhibitions that the 2008 GAA has stipulated," Pimentel said.

He said the prospective application of the GAA means that new programs funded under the new budget law will be implemented only in April. It also means that only 75 percent of the additional funding allocation will actually be implemented this year.

Due to the delay in the approval of the 2008 GAA, the government financed its operations through the 2007 budget law, which was automatically appropriated in accordance with the Constitution.

Pimentel also warned Mrs. Arroyo against using her control over the congressional pork barrel as a tool for reprisal against lawmakers who are critical of her administration.

Pimentel criticized the President for vetoing a provision in the 2008 general appropriations act which was intended to be a safeguard against the selective practice of impounding the allocations of senators and congressmen from the Priority Development Assistance Fund (PDAF). The provisions also makes it mandatory for budget authorities to release such funds within the fiscal year.

He said the President vetoed the provision under the guise of "ensuring sound and efficient financial programming, prudent spending and fiscal management, including expenditure rationalization."

"The experience of lawmakers in the past several years betrays the fallacy of her verbal acrobatics," Pimentel said.

"She has favored her lackeys and disfavored her critics with releases of their development funds even as the budget law does not distinguish between lackeys and critics of the administration. Where the law does not distinguish, a time-honored legal axiom states, neither should we distinguish."

The minority leader said the President's "latest shenanigan reflects her penchant to politicize every aspect of her governance and fairness is damned."

Pimentel also objected to the President's veto of the following provisions in the GAA related to government's borrowings:

  •  Provisions that prohibits the disbursement of funds for interest payments on challenged, fraudulent, wasteful and/or useless debts pending their renegotiation and/or condonation.
  •  Provision requiring the Bangko Sentral ng Pilipinas and Department of Finance to submit quarterly reports on actual and foreign and domestic debt service payments to the committee on appropriations of the House of Representatives and the committee on finance of the Senate.

Explaining her veto on the prohibition on the repayment of anomalous and tainted loans, the President said "this restriction is a clear encroachment of the constitutional guarantee on non-impairment of contracts." She also stated that the government's credit standing in the global community should be preserved and protected.

Pimentel accused the President of abusing her veto power by shooting down this provision since this will result in continued payment by the government of the loans for projects that have turned sour and did not benefit the country at all.

He said the veto of this special provision has nullified the decision of Congress to allocate or augment funds for essential and productive projects from the savings that can be generated out of the disallowed debt service payments.

Had the President not vetoed this provision, this would have prevented the government from servicing loans for defective or poorly-conceived projects such as the procurement of medical incinerators which did not meet the standards of the Clean Air Act and the Telepono sa Barangay, which has turned into a white elephant.

He said the President's veto of the provision on the mandatory reporting of debt service payments to Congress smacks of a flagrant disregard of the constitutional principle of transparency in all government transactions which she herself has vowed to abide by.

Pimentel branded the veto of this specific provision as unwise, irresponsible and indefensible, noting the Chief Executive did not even bother to explain in her veto message to Congress why she was rejecting this provision.

He emphasized the need for a full public disclosure of all government loan transactions especially now that the Arroyo administration has gone on a borrowing-spree specially from cash-rich China.

To put a stop to the President's abuse of her veto power, Pimentel said the logical course of action left to Congress is to override this veto. He said this will also enable Congress to assert its much-diluted power over the purse.

However, he acknowledged that it will be a useless exercise to attempt an override of the veto under the present circumstances because "we cannot mount the required number of votes."

"Not under the set-up where other lawmakers would partake of the bounty of the underhanded tactics GMA has employed to deal with the GAA," Pimentel said.

"To sum up, Mrs. Arroyo has again thrashed the spirit of the law in favor of a pragmatic interpretation of legal principles that allows her to maximize her hold on the national purse for partisan political gain."

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