Press Release
November 24, 2014

(Privilege speech on 24 November 2014)


The layman wants to know two things about the 2015 budget. The first question is: In the form of so-called savings, can the President still transfer an appropriation from one agency to another? The answer is yes. The second question is: Does the 2015 budget still contain pork barrel, meaning lump-sum funds to be spent at the discretion of the legislators? The second answer is also yes. In other words, the 2015 budget which contains two dangerous minefields leading to corruption, is not what people expect. It is what administration candidates expect. What this Senate should do in order to meet citizen expectation will be listed at the end of this speech.

Definition of "Savings" Unconstitutional

The Constitution uses the term "savings," without defining it. We all know that this function is left for the Supreme Court to discharge. The Constitution provides: "No law shall be passed authorizing any transfer of appropriation; however, (certain officials) may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations."

If a legal term is left undefined, it is used in the ordinary sense, not the technical sense. In its ordinary sense, the term "savings" means sums of money saved on a regular basis, often by means of economizing. However, the 2015 budget invents its own definition of savings in Sections 67 to 70, particularly Section 68, which provides that savings can be declared at any time for whatever might be considered "justifiable reasons." Let me compare the 2011 budget with the 2015 budget to show how lax the definition of savings has become. In the 2011 budget, Section 69 gave the meaning of savings and augmentation as follows: "Savings refer to portions or balances . . . which are (i) still available after the cancellation or final discontinuance or abandonment of the work, activity, or purpose for which the appropriation is authorized. . . ."

Compare the 2011 definition with this definition in the 2015 budget, where Section 68 provides: "Savings refer to the portions or balances . . . from any of the following: and I paraphrase: "(a) discontinuance or abandonment of the program, activity, or project . . . which would render it not possible for the agency to implement the said P/A/P at anytime." Again I paraphrase: Savings is "non-commencement of the P/A/P within the first semester of 2015."

To summarize, the use of savings under the 2015 budget is broader. The old definition referred to final discontinuance or abandonment. The new definition refers to discontinuance or abandonment at any time.

As a humble student of constitutional law, allow me to observe that the new definition is unconstitutional for being over-broad and for being vague. Under the overbreadth doctrine, if a statute is so broadly written that it deters free expression, it can be struck down on its face because of its chilling effect. Here what we seek to protect is not freedom of expression, but the congressional power of the purse. Under the void for vagueness doctrine, a criminal statute is required to state explicitly and definitely what acts are prohibited or restricted. Here the vagueness doctrine seeks to preclude arbitrary enforcement by the executive branch of the spending power given to Congress.

There are two cases of dangerous minefields in this budget.

First Case: The use of savings under the new definition is broader. The use of savings under the old definition talks of final discontinuance or abandonment of the work, activity, or purpose for which the appropriation is authorized. The new definition talks simply of discontinuance or abandonment at any time (it could be during the first month, first quarter, first half). A deferral of a project can be construed as discontinuance or abandonment; the same project may be resubmitted for congressional authorization next year or two years from now. This contravenes the constitutional mandate of Congress to authorize appropriations but may later be declared by the DBM Secretary as abandoned, at its whims and caprices, and then he may use the appropriations for another project which has not been previously authorized by Congress but which falls within the more general P/A/P.

Second Case: After the first semester (two quarters), an agency that fails to obligate any allotment in its own budget loses it. What the agency loses, Secretary Abad gains. What happens to the agency heads' commitment to Congress that they will deliver a specified level of outputs (number of school buildings, completion rate, kilometers of roads, linear meters of bridges and so on)? What if Projects X, Y, and Z were funded out of "savings" but were substituted for Congress-authorized but DBM-discontinued projects A, B, and C, would that not violate the power of Congress to authorize appropriations consistent with the recent Supreme Court decision on DAP? What if X, Y, and Z are entirely new projects? How would the general public know that such substitution took place? Monitoring of projects will be extremely difficult which may open up opportunities for corruption.

Pork Barrel Remains

In the 2014 budget, the term PDAF was conspicuously avoided. But the non-appearance of the term PDAF was merely illusory, the P25.4 billion worth of pork transferred to five agencies with legislators still in control of the projects. The same thing is happening in the 2015 budget.

Let me raise a BIG question about the 2015 budget. Last summer, why were representatives asked to submit lists of projects they endorsed for their districts? I understand that the form distributed did not bear any letterhead.

In the 2015 budget, no less than P37.3 billion worth of projects are allocated to the following agencies: DPWH with P18.369 billion for "Land Infrastructure Program"


Reportedly, the Department of Budget and Management submitted to the House of Representatives alleged errata consisting of 269 pages and composed of additions, realignments, insertions, and typographical errors, in all amounting to P4.7 billion, consisting of, among others:
P3.87 billion for the APEC Conference
P998.8 million for the Bureau of Customs
P296.9 million for the Department of Tourism
The 269 pages of errata are solid proof that DBM has been haphazard with the budget.


1. Retain the original definition of savings. Sections 68-69 prescribe the use of savings, meaning of savings and augmentation, and priority in the use of savings. The insertion of the phrase "at any time" in section 68(a) totally changes the meaning of the word "savings". Savings does not happen "at any time", it happens under conditions described in the original meaning of savings, as stated in the general provisions. Section 68(b) on the matter of non-commencement of a program, activity, or project (P/A/P) within one semester constitutes another change in the original meaning of savings. It drastically cuts short the period during which savings can be rationally declared. Savings are usually declared toward the end of the year, not at the middle.

The redefinition of savings demolishes and overturns not only the constitutional and legislated meaning of savings; it goes against the generally accepted meaning of the word itself. We might be the only country in this world which declares savings "at any time" and "non-commencement within six months". Since the private sector has a different meaning of savings, books on accounting, auditing, and financial management will have to be changed.

There will be confusion between the private sector and the public sector in the Philippines; there will also be confusion with other countries because their definition will be the standard definition and ours is the result of an effort to take over the power of the purse.

The most important reason is to save Congress' power of the purse. Through the years, Congress' power of the purse has been steadily eroded, diminished, and reduced - all with the consent and cooperation of Congress. Whatever is left has to be saved.

2. Senate should not approve the budget unless the offensive redefinitions are removed.

3. Because of the importance and significance of the issue of redefinition of savings, senators should explain their votes so the public can be guided in 2016.

In the Lower House, only those who were opposed to the redefinition of savings and the GAB 2015 explained their votes. Those who will say "yes" in the Senate should also explain why they will shoot themselves, not only in the foot, but also in the heart. They have to explain why they will commit an act which is inimical to their own institution.

4. The Senate should also compel government agencies to comply with the reportorial requirements in Section 91 of the general provisions, especially the second paragraph, which requires DBM to report on lump sums. So far, DBM has not been complying with this requirement.

5. Put the P2,690,684,000 appropriations for the socio-economic component of the normalization process for DA, DepEd, CHED, DOH, DSWD, TESDA, and OPPAP to the Unprogrammed Appropriations. Reason: It has no legal basis. The BBL has yet to pass Congress, and even if passed into law, has to be ratified in a plebiscite spanning the area of ARMM and nearby regions.

6. DILG should focus on its mandates which are: to supervise local government units and to secure the life and property of every Filipino, no matter where they live, in urban centers or rural areas, and no matter what their political colors are, whether they are friends or foes.

7. Restrict the use of savings from Special Purpose Funds, especially the Miscellaneous Personnel Benefits Fund (MPBF) and the Pension and Gratuity Fund (PGF). DBM might have bloated the budget for the MPBF and the PGF with the intention of using the 'fat' as a source for additional discretionary spending.


(Sen. Santiago made it of record that she turned over to the chair of the finance committee, five attachments to her speech which served to illustrate how certain funds in the budget should be reduced or transferred to other agencies. Sen. Santiago, in her speech, ended with a list of her proposed amendments to the budget, which are listed in the copies of her speech previously distributed to media.)

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