Press Release
November 19, 2013

Sponsorship speech of Sen. Chiz Escudero

Mr. President, Distinguished Colleagues, Good afternoon.

I rise to sponsor the national budget for fiscal year 2014 in a time of turmoil, be it natural or man-made. It seems that the nation was just recovering from the mayhem caused by the MNLF-instigated violence in Zamboanga City when a magnitude 7.2 temblor shook Bohol and its surrounding environs, with both events costing the nation dearly in terms of human lives lost and damage to property. And as if nature's wrath is yet to be appeased, Super typhoon Yolanda came barrelling past our country with its killer winds levelling whole islands and communities in the Visayas, leaving in its wake a wide swathe of destruction and tragic loss of lives unprecedented in recent history. In the same breath, the nation's administrative institutions are similarly under siege, with the heated pork barrel controversy hogging newspaper headlines, emitting the foul stench of corruption permeating the various echelons of government. From the legislative branch all the way to the cavernous halls of Malacañang, the political turmoil spawned by the pork barrel scandal -- be it the infamous Priority Assistance Development Fund a.k.a. PDAF or the Disbursement Acceleration Program a.k.a. DAP -- spurred tens of thousands of concerned citizens to march and demand, in outrage, no less than the total abolition of pork barrel in the 2014 national budget.

Article VI, Sec. 29 of the Philippine Constitution mandates that "No money shall be paid by the Treasury except in pursuance of an appropriation made by law. Congress, therefore, holds the power of the purse and therefore, the fuel for the entire government machinery. The authority given to the executive branch to disburse public funds is merely a delegated power granted to it by Congress. And enact a national budget we must, especially in this time of turmoil, if the engine of government is to continue humming every single day, even amid the cacophony of voices reflecting political discord.

Key Reforms

It seems a pity, Mr. President, that the laudable key reform measures instituted in the proposed 2014 national budget were overshadowed by today's broiling pork controversy that has discredited the entire budget process. Foremost among these reforms is the concept of Performance-Informed Budgeting that has given an innovatively new face to today's budget documents, presenting not just the pesos but more importantly, the outcomes, outputs and performance targets of government agencies for the succeeding year. In addition, the newly-instituted Program Budgeting Approach now allows for better collaboration among government agencies through convergence of efforts and resources along priority programs of the government as envisioned under the Social Contract.

One other innovative key reform instituted is the movement towards a "Budget-as-Release Document" in 2014. Simply put, the Department of Budget and Management declares that "the budgets of agencies - except those to be contained in a negative list - are considered released to them as soon as the National Budget takes effect.

To make this possible, Mr. President, the 2014 budget is, to date, the most detailed budget proposal in our country's history ...almost all are "line items" to include personal services, maintenance and other operating expenses, and capital outlays, so that transparency is very high. There would be no need any more for the infamous Special Allotment Release Order or SARO that authorizes a government agency to incur obligations not exceeding a given amount during the specified period.

In keeping with the government's drive towards inclusive development, the 2014 budget also allowed the citizens' active participation in the crafting of the people's budget. In particular, Budget Partnership Agreements were drafted between agencies and civil society organizations, while Bottom-Up Budgeting allowed the participation of local government and communities in the budget process.

The Proposed FY 2014 National Budget

Mr. President, the proposed national budget for fiscal year 2014 amounts to P2.268 trillion, reflecting a nominal increase of P262.10 billion or 13.07 per cent over the current year's P2.006 trillion budget. Expenditures shall be supported by projected revenues of P2.018 trillion representing a revenue effort of 15.1 per cent of our Gross Domestic Product. Tax Revenues, in particular, will account for P1.879 trillion in FY 2014 or a tax effort of 14.1 per cent while Non-Tax Revenues will amount to P136.13 billion.

In terms of appropriation source, New General Appropriations of P1.612 trillion will constitute the bulk while Automatic Appropriations of P796.029 billion will include the Internal Revenue Allotment, various Special Accounts, along with debt service, specifically interest payments. The biggest slice of the budget pie will be consumed by Social Services at 37 percent, followed by Economic Services at 26 per cent.

In the light of the string of destructive calamities that descend upon the Philippines every year, it is worthy of note that the Alternative Budget Initiative - Environment Cluster (ABI-ENVI) and La Liga Policy Institute has tagged budgets for Climate Change Adaptation and Disaster Risk Reduction that are embedded within the budgets of several departments. ABI reported that out of these tagged budgets amounting to P73,000,248,000 in the 2014 National Expenditure Program, 47% will go to flood control projects; 14% to housing program for Informal Settler Families (ISF) in danger zones in the NCR; 16% to the Quick Response Funds (QRF) in the budgets of the DSWD, DA, DepEd, DND-OCD and DPWH and the Calamity Fund under the Office of the President; and 23% to other adaptation and DRRM related projects including multi-hazard and early warning systems, vulnerability and adaptation assessment, adaptation in agriculture and international commitments funds.

The House-approved General Appropriations Bill

As approved by the House of Representatives, the General Appropriations Bill or GAB is P98 million lower than the President's proposed budget for 2014. In particular, New Appropriations for the succeeding fiscal year amounts to a lower P1,611.776 billion as approved by the House, in contrast to the President's proposal of P1,611.874 billion.

With the total Unprogrammed Fund and Automatic Appropriations remaining unchanged vis-a-vis the President's Budget proposal, the 2014 Obligation budget recommended by the House amounts to P2,267.902 billion.

A major portion of the amendments contained in the GAB were part of the Errata on the National Expenditure Program that were submitted by the Department of Budget and Management, and are mostly internal realignments within agencies or departments.

Topping the list of controversial amendments in the GAB is the deletion, in toto, of the Priority Development Assistance Fund or PDAF, which the House realigned to various agencies, along with the P200 million of priority programs and projects deleted from the budget of the Office of the Vice President.

These amounts were in turn transferred to the Department of Health for assistance to indigent patients, the Department of Labor and Employment for employment facilitation and capacity building, the Department of Social Welfare and Development in support of service to individuals and families in especially difficult circumstances, the Department of Public Works and Highways for additional regional and local infrastructure projects, and the Commission on Higher Education for additional assistance, incentives, scholarship and grants.

Senate Amendments

Your Committee on Finance, Mr. President, diligently conducted daily budget hearings from August to October, in addition to various meetings with the agencies' technical staff as the need arose. After wrapping up these hearings, the committee now presents the following amendments for the chamber's consideration and approval.

As proposed by your Committee on Finance, Mr. President, Total New Appropriations will amount to P1,608.576 Billion, a net cut of P3.2 Billion from the House-approved P1,611.776 Billion.

This net cut, Mr. President, represents the foregone pork barrel of a total of 15 senators and the Vice President who have decided to heed the clamour of the people to totally renounce their P200 million PDAF allocation in the 2014 General Appropriations Act. The P3.2 billion cut was deducted from the four agencies where the House of Representatives decided to temporarily "park" the PDAF allocation of the senators namely the Commission on Higher Education, the Department of Health, the Department of Labor and Employment, and the Department of Social Welfare and Development.

With Automatic Appropriations remaining at P796.029 billion and Unprogrammed Fund at P139.904 billion, the 2014 Obligation budget recommended by your committee now amounts to P2,264.702 Billion.

The major increases, Mr. President, consist of the following:

1. P5.5 billion additional allocation for the Calamity Fund consisting of Aid, Relief and Rehabilitation Services to communities/areas affected by calamities including Training of Personnel and other Pre-disaster Activities, as well as Repair and Reconstruction of Permanent Structures including Capital Expenditures for Pre-disaster Operations, Rehabilitation and Other Related Activities. Pursuant to RA 10121, we are also recommending the renaming of the Calamity Fund to the National Disaster Risk Reduction Management Fund;

2. P250 Million in Quick Response Funds for the Department of Health, particularly for the deployment of medical teams, procurement of commodities, and financial assistance to hospitals; and P50 Million for Medical Equipment, or a total of P300 Million;

3. P300 Million in Quick Respond Funds for the Department of Transportation and Communications to enable the immediate rehabilitation of crucial transportation facilities necessary to normalized the situation and living conditions of the people in disaster stricken areas;

4. P100 Million for the Department of Justice's JUSIP-Construction, Repair and Rehabilitation of Building;

5. P500 Million for the Initial Construction of a New Building for the Securities and Exchange Commission;

6. P50 Million for the Implementation of Clean Air Regulations under the DENR-Environmental Management Bureau;

7. P20 Million for Climate Change Adaptation works for the Department of Agriculture;

8. Realignment of P2.5 Billion from lump-sum appropriations for scholarship programs to the budget of the 112 State Universities and Colleges which was done in consultation with the Commission on Higher Education.

One other major amendment proposed by your Committee on Finance, Mr. President, is the creation of a new special purpose fund, the P20 Billion Disaster Rehabilitation and Reconstruction Fund, to be used for the rehabilitation, repair and reconstruction works and activities of areas affected by the typhoons Yolanda, Santi, and Labuyo, as well as the recent 7.2 magnitude tectonic earthquake. Its funds shall be released directly to the implementing agencies and/or local government units concerned and shall be used for repair and rehabilitation of the following: irrigation systems; school buildings; electrification infrastructure; academic building of state universities and colleges; historical sites; roads, bridges, government buildings and other infrastructure; airports and ports; and local infrastructure. It shall also be used for the construction of housing units, purchase of emergency relocation/structures, core shelter program, and the cash for work livelihood program.

With respect to the Special / General Provisions, Mr. President, the more significant amendments consist of the following:

  • Inclusion of the purchase of seeds, including fingerlings / fries, and restoration/rehabilitation of irrigation systems

  • among the utilization of the Quick Respond Fund under the Department of Agriculture;

  • A new Special Provision under State Universities and Colleges specifying that their Scholarship Program for poor and deserving students shall give priority to students in the tertiary level belonging to indigent households under the National Household Targeting System for Poverty Reduction of the DSWD or informal sector families;

  • A new Special Provision under the Department of Health providing for a P300 Million Quick Response Fund for the relief and rehabilitation programs in areas stricken by calamities, epidemics, crises, and catastrophes;

  • A new Special Provision under the Department of National Defense providing for a Disaster Response Protocol to be used as the basis on the response expected from the different agencies and sectors on every disaster to be developed by the Office of Civil Defense;

  • An added stipulation in the Special Provision on Engineering and Administrative Overhead (EAO) Expenses under the DPWH stating that 1% of the project cost for EAO expenses shall be deducted from school buildings and other infrastructure projects outside of the DPWH budget;

  • A proviso under the Special Provision on Realignment of Funds under the DPWH specifying that the realignment of allotment released from appropriations of the department from one project/scope of work to another may be undertaken only once per project and not later than the 3rd quarter of the current year. A similar provision is also included in the General Provisions to cover other agencies;

  • An additional proviso under the Conditional Cash Transfer Special Provision of the DSWD earmarking P336 Million as cash grants for 20,000 families affected by Typhoon Yolanda who are not covered under the existing CCT program of the department and providing further that in case of unavailability of health and educational facilities, conditionalities for availment of CCT may be relaxed or substituted with reasonable and appropriate requirements;

  • A new Special Provision under the Department of Transportation and Communications providing a P300 Million QRF for the immediate rehabilitation and operation of airports, seaports, railways, inter-island linkages such as Roll-on Roll-Off Systems, and other crucial transportation facilities which may have been damaged or destroyed, including incidental MOOE costs, for the prompt restoration of normalcy in the delivery of basic services to affected people during emergency situations;

  • Amendment of the Special Provision on the Quick Response Fund under the Calamity Fund stating that 30% of the amount allocated by the NDRRM Fund shall be allocated as Quick Response Fund or stand-by fund for relief and recovery program to normalize as quickly as possible the living conditions in areas stricken by calamities, disaster, epidemics, or complex emergencies;

  • An added proviso on the Release of Funds under the Unprogrammed Fund stating that any savings generated from the programmed appropriations for the first two quarters of the year may be released by the DBM, subject to the President's approval, under the Unprogrammed Fund corresponding to only 50% of the said savings net of revenue shortfall. The release of the balance of the said total savings shall be subject to fiscal programming and approval of the President;

  • A new General Provision on the Release and Implementation of Bottom-up Budgeting (BUB) specifying that the cost of implementing BUB projects by the LGUs shall in no case exceed the cost of a similar project being implemented by the national government agencies in the same locality;

  • A revised General Provision which requires that the Harmonized Priority Research Agenda shall be directly related to the priorities under the Philippine Development Plan (2011-2016);

  • Amendment to the General Provision on Lump-sum Appropriations specifying a copy of the list of projects and its implementing agencies/LGUs shall be submitted to the Committee on Appropriations and the Committee on Finance, and must be posted in the official website of the agency concerned;

  • An amendment to the General Provision on the Requirements of Fund Transfers to Civil Society Organizations stipulating that the government agency where the funds were released and which was subsequently transferred to civil society organizations shall remain accountable for the funds. In addition, any government official, employee and persons who shall misuse such fund under their control or administration shall suffer the maximum penalty imposed under the Revised Penal Code, R.A. 3019, R.A. 7080 and other appropriate penal laws;

  • An amendment on the General Provision requiring a more detailed reporting on the utilization of income;

  • An amendment requiring that the quarterly Financial Narrative Report should include the realignment of funds within the agencies, as well as the transfer of funds to other government agencies, CSOs, LGUs, GOCCs or lump sum funds;

  • A new General Provision requiring the DBM to furnish the Commission on Audit a list of all items under this Act that were considered as released upon its effectivity into law. The DBM shall also submit to COA a copy of all release documents, such as the SARO and/or NCA pertaining to releases of funds such as lump sum funds, special purpose funds, supplemental appropriations, automatic appropriations, continuing appropriations, use of savings and realignment of funds;


Ginoong Pangulo ... Bilang halal ng bayan, obligasyon natin na ang panawagan ng taong bayan, ang kanilang mga boses at mithiin, ay dalhin sa Senado. Sa gitna ng sigaw ng taong bayan ngayon na buwagin ang pork barrel, ano ang ating kasagutan? Anong uri ng national budget ang ating ipapasa? Kasama ba ang tinaguriang pork barrel o hindi? Kung kasama, anong uri ang ating pahihintulutan? Kung hindi naman, mayroon bang kailangang ipalit?

At the end of the day, Mr. President, we will have to answer these questions individually then collectively as an institution. In these times of turmoil and political discord, we face the Herculean task of rebuilding, not just the damage wrought by the natural disasters that have befallen our hapless country, but also the shattered image of the Senate as a hallowed institution uncorrupted by the pork barrel scandal that has outraged the nation. We're no Hercules, Mr. President, but in this time of national calamity and amid the unspeakable grief and despair of our countrymen who tragically lost their entire homes and loved ones to nature's fury, the least we can do is to rise above pork-tainted political bickerings and instead start rolling up our sleeves and giving our countrymen the Senate that they, in earnest, truly deserve.

Thank you and Mabuhay ang Pilipinas!

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