Ralph’s errata
“During his stint in the House, Recto suggested a ‘budget errata’ to realign the budget and make it more transparent.
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“During his stint in the House, Recto suggested a ‘budget errata’ to realign the budget and make it more transparent.
As House Deputy Speaker, Ralph Recto criticized the P588 billion in unprogrammed funds in the proposed 2023 national budget and called on Malacañang to provide a “detailed explanation” of the items.
He regarded the unprogrammed appropriations as items that should be part of the budget.
The Batangas lawmaker criticized the standby allocations, claiming they inflated the budget to P5.856 trillion, compared to the official P5.268 trillion outlined in the National Expenditure Program.
The unprogrammed funds were the repository of pork barrel and other projects displaced from the regular budget at the instigation of Congress members.
How time flies. Today, Recto, as finance secretary, is combing through the budget to fund unprogrammed items.
He had completely turned his back on his call for a detailed report on the budget items with uncertain funding that could only be raised through revenue collections that exceeded the targets or by juggling funds.
During his House stint, Recto suggested a “budget errata” to realign the budget and make it more transparent.
He tasked the Department of Budget and Management (DBM) at the time to submit details of the unprogrammed appropriations.
Recto’s attention was directed to the two biggest items in the unprogrammed appropriations which were the P380.6-billion Support to Foreign Assisted Projects and the P149.7-billion Support for Infrastructure Projects and Social Programs that lacked details.
The errata would revise portions of the budget to include a breakdown of the allocations.
Now, as the chief of the Department of Finance (DoF), Recto has adopted a different stance. He said the unprogrammed appropriations are crucial and the (DoFmust heed Congress’ directives in collecting excess and unused funds of government-owned and -controlled corporations (GOCCs) to finance “crucial government projects under the unprogrammed appropriations.”
“It was a mandate we faithfully complied with based on the merits of our cost-benefit analysis and the legal rail guards spelled out in legal opinions by the OGCC (Office of the Government Corporate Counsel), the GCG (Governance Commission for GOCCs), and the CoA (Commission on Audit),” he explained.
He targeted the idle reserves of P89.9 billion of the Philippine Health Insurance Corporation (PhilHealth) and the P108.9 billion of the Philippine Deposit Insurance Corporation (PDIC) for transfer to the National Treasury to fund the unprogrammed appropriations.
He claimed the funds all came from government subsidies, “unused, excess, and dormant in PhilHealth while taxpayers pay interest on them without anyone benefiting.”
Recto overlooked the fact that the extracted funds were essential for the two insurers to fulfill their mandates: providing healthcare coverage to Filipinos and ensuring depositors’ peace of mind regarding their bank accounts.
According to the DoF’s cost-benefit analysis, the projects to be funded with the unprogrammed appropriations would hike real GDP (gross domestic product) growth by 0.7 percent, increase revenues by an additional P23 billion to P24.4 billion, and create hundreds of thousands of jobs.
He argued that if the projects were to be funded with additional borrowings, it would increase the country’s deficit-to-GDP ratio.
Recto warned that this would translate to an additional P12.7 billion in interest payments every year.
“In effect, we will fail to hit our Medium-Term Fiscal Program and put at risk our hard-earned investment grade rating, just when we recently achieved a credit rating upgrade of A minus. It seems as if we took one step forward to our Road to A agenda only to take three steps back,” he said.
Recto must also apply his cost-benefit analysis to the hundreds of billions of pesos allocated to pork barrel projects in the budget, which displaced essential initiatives like the Metro Subway Program.
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