There are no irregularities in the P588.1 billion in unprogrammed funds included in the proposed P5.268-trillion national budget for 2023, the Department of Budget and Management (DBM) said on Wednesday.
In a press conference, Budget Secretary Amenah Pangandaman explained the unprogrammed funds were “actually itemized,” explaining that the money can be used for “emergency” situations.
“The projects included [in the unprogrammed appropriations are those we do not expect to be implemented, just like those projects that we had at the height of the pandemic,” Pangandaman said.
This was after some lawmakers, led by Deputy Speaker Ralph Recto, asked the DBM to explain the P588.1 billion in unprogrammed appropriations under the proposed 2023 national budget.
The DBM, in a separate statement, said the unprogrammed funds are “standby appropriations” that will be used for “some unexpected expenses; additional support for infrastructure projects and social programs; support to FAPs (foreign-assisted projects), [and other programs such as] last-mile schools’ program, procurement of vaccines and risk- management program.”
“The Department of Budget and Management stands firm on its position of having no irregularities in allocating unprogrammed funds under the 2023 [proposed] National Expenditure Program (NEP), as it is ready to defend the proposed budget with the start of the marathon of budget deliberations,” it said.
Pangandaman and her office also provided a breakdown of the proposed unprogrammed appropriations under the proposed 2023 NEP.
Of the P588.1 billion, around P149.6 billion will be used to support infrastructure projects and social programs, including vaccine procurement worth P22 billion.
Around P5 billion will go to the Armed Forces of the Philippines’ Modernization Program; P20.6 billion for budgetary support to government-owned or -controlled corporations; P1 billion for the Risk Management Program; and P2 billion for payment of arrears of Land Transportation Office – Information Technology’s Service.
Under the unprogrammed appropriations, about P210.5 million will be allocated for the refund of the service development fee for the right to develop the Nampeidai Property in Tokyo, Japan.
Around P380 billion will be earmarked to support foreign-assisted projects, the DBM noted, adding that P378.2 billion of which will be given to the Department of Transportation (DOTr) while the remaining P2.2 billion will go to the Department of Social Welfare and Development.
The DBM said some P10 billion of the unprogrammed funds will be allocated for the Bangko Sentral ng Pilipinas (BSP) Equity Infusion pursuant to Republic Acct 11211; P18.9 billion for public health emergency benefits and allowances for health and non-healthcare workers; and P14 million for Prior Years’ local government units (LGU) Shares.
“The [unprogrammed appropriation] came into being more than four decades ago and was accepted by subsequent administrations. It is a form of standby appropriations, meaning if at any given point when excess revenues are not generated, and an item of appropriations is found to be deficient or even non-existent, then unprogrammed appropriation will be triggered,” the DBM said.
The DBM said only P200 billion of the P588.1 billion will be “considered unprogrammed,” since P378.2 billion of the total unprogrammed appropriations (AUs) will be allocated for DOTr’s loan proceeds requirements
“Hence, the DBM contends that if there is going to be an analysis on whether it exceeded the ideal percentage of UA against the national budget, it should be based on the P200 billion unprogrammed appropriation, and not with the P378.2 billion unprogrammed appropriation corresponding to loan proceeds of DOTr,” it said.
“Thus, should this be removed, only approximately P200 billion, or 4 percent (of the total national budget), is considered unprogrammed, which will be triggered for release only upon the generation of additional revenues,” the DBM added.
The DBM explained that the DOTr’s loan proceeds were transferred to the unprogrammed appropriation “due to their history of low absorptive capacity insofar as loan proceeds is concerned.”
The DBM said it is “ready to provide details and open to Congress” the wisdom to allocate specific programs and projects under the unprogrammed appropriations.
It gave the assurance as it acknowledged there were certain instances when the proposed budget in the past did not have unprogrammed appropriations.
“This is due to the logic that when the budget is effectively increasing, there should not be an unprogrammed appropriation,” the DBM said.
“But in our country where we have calamities we do not expect or activities we do not even anticipate but necessitates us to provide services to our people, the unprogrammed appropriation is an available resource cover that will trigger additional amounts for the national government,” it added.