Ex-finance chief Teves foretells dark future

It is horrifying to note that the DBM chief with only a circular issued by the finance chief could go to the national treasury, withdraw P30 billion, and issue advices on allotments and notices of cash allocations to spend the whole amount.

One of the seven ex-finance chiefs, Margarito Teves, who served under former President Gloria Macapagal Arroyo, in August 2024 signed a joint statement saying that they agreed with Recto’s order for PhilHealth to transfer P89.9 billion of its funds to the national treasury, which was published in national publications on 28 August 2024.

In his most recent statements, however, Secretary Teves showed apprehension over the more serious problem of excessive unprogrammed appropriations in the national budget which I believe could trigger a national financial anomaly much bigger than what transpired in calendar years 2011 to 2015 under the infamous Priority Development Assistance Fund (PDAF) and the Disbursement Acceleration Program (DAP) under National Budget Circular 541 issued by former Department of Budget and Management Secretary Florencio Abad.

Early this month, Teves called on lawmakers and policymakers to reduce unprogrammed appropriations in the national budget.

He said reducing unprogrammed appropriations would allow the Department of Finance (DoF) to focus on increasing revenues instead of scrutinizing the funds of government-owned or controlled corporations (GOCCs) for excess resources that could be tapped to cover unprogrammed projects.

Sought for his reaction, Finance Secretary Ralph Recto said, “I agree with the statement of former finance chief Gary Teves. I don’t expect this to continue next year.”

The former finance chief made the recommendation amid the issue of diverting idle or unused GOCC funds, such as PhilHealth’s P89.9 billion, back to the treasury to finance unprogrammed appropriations.

It was the Department of Budget and Management (DBM) under Secretary Amenah Pangandaman that had earlier bared a list of over P200 billion worth of programs and projects, under unprogrammed appropriations, that could be funded with the excess funds of GOCCs.

Teves said the government should instead find ways to ensure that government priority programs and projects are included in programmed appropriations. He pointed out that in 2023 and 2024 “unprogrammed appropriations reached P807.2 billion, or 15 percent and 13 percent, respectively, of the national government budget.”

“This is more than double the five percent on average from 2023 and 2024,” he added.

“A reasonable amount of unprogrammed appropriations is necessary to cover expenses arising from unforeseen events since the national government budget is prepared one year ahead of time,” the former finance chief said, adding that “moving crucial social and infrastructure projects from programmed and unprogrammed appropriations is not only questionable but undermines the government’s commitment to inclusive development and fiscal prudence.”

Teves also expressed concern that including key priority items under unprogrammed appropriations — such as the upgrading of health facilities, training of health professionals, payments of government personnel benefits, and construction of health housing for the poor — could result in the “delayed implementation of vital programs since there is no definite funding source.”

He said the Legislative-Executive Development Advisory Council (Ledac) should be convened “as a platform to allow the executive and legislative branches to agree on the priority programs that should strictly remain programmed and the budget items that will be placed under the unprogrammed appropriations.”

“This could be done for the proposed 2025 budget before the deliberations in the bicameral conference committee. The Ledac can be convened for succeeding years before the NG budget is formally sent to Congress,” he added.

“Given all this, it is necessary to unburden the finance secretary from having to scrutinize the financial statements of each GOCC in search of idle funds just to finance the rising unprogrammed appropriations.

(To be continued)