Press Release
October 21, 2021

Drilon bats for provisions in 2022 GAA prohibiting parking of funds

To prevent a repeat of the controversies surrounding the Procurement Service of the Department of Budget and Management (PS-DBM) and the Philippine International Trade Corp. (PITC) Senate Minority Leader Franklin M. Drilon proposed a provision in the national budget that will prohibit agencies from "parking" their funds to skirt procurement laws and the expiration of the authority to use the funds.

"This is a practice which prevents the budget from being an instrument to move projects forward and contribute to our economy, because the budget is not being utilized. The agencies would make it appear that they disburse the funds when in truth and in fact, they only parked it in PS-DBM or PITC," Drilon said during a Senate Committee on Finance budget hearing on Wednesday.

"The PS-DBM went beyond its mandate and became the procurement agency of different agencies," Drilon said.

"This is one reason why this PS-DBM is what it is today. If only we can abolish this, we should abolish this," he added.

Drilon stressed this as he noted how the fund transfers to these two agencies grew exponentially in the last five years.

Based on his own computation, Drilon said the total fund transfers to PS-DBM reached a whopping P91.8 billion between 2016 to 2017.

Meanwhile, based on the PITC data, the PITC received a total of P50.7 billion funds from various government agencies from 2014 to 2020. Of which, P33 billion or 65% of that total amount constitutes government accounts, while the remaining P17 billion or 35% constitutes military accounts.

Budget Undersecretary Tina Marie Canda, officer-in-charge of the DBM, shared Drilon's observations and responded positively to the senator's proposal.

"We have veered away from the very mandate of the procurement services. The procurement is supposed to be for common use supplies," Canda said.

"There is no really excuse for agencies to transfer these funds," Canda stressed. She added that as a result the funds ballooned over the years.

Drilon said that PS-DBM and PITC should stick to their mandate. The PS-DBM should focus on CSE or common-used supplies and equipment. He noted how these procurement agencies got involved in numerous controversies involving allegedly overpriced procurement.

"We can move forward and avoid this anomalous structure that has given rise to these anomalous practices," Drilon said as he tasked the DBM to come up with a budget circular and a proposed general provision in the budget that will disallow the anomalous fund transfers.

The DBM undersecretary responded positively to Drilon's proposals, saying that PS-DBM and PITC should concentrate on the purchase of CSEs.

"If we prohibit the procurement service (from doing that) and allow the agencies to make their procurement insofar as their big-ticket projects, the bulk of these funds would definitely not be that huge," Canda said.

Canda added that during the past administration, the DBM actually worked to strengthen BACs and in fact, encouraged departments to have more BACs to help in their procurement.

Drilon also asked DBM to submit a draft executive order to be submitted to the President that will prohibit the transfer of funds.

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