Facts and figures on gov’t spending for people’s initiative

By Benjamin Diokno Former Budget secretary and now economics professor at the UP

On the use of contingent fund to fund people’s initiative:

The use of the contingent fund to finance a referendum to reform the Constitution is illegal, improper and wasteful use of taxpayers’ money.

Fact One: There is no item in the 2005 budget – nor in the proposed 2006 budget — for the conduct of a separate plebiscite in response to a people’s initiative to amend the 1987 Constitution. Note that Congress has yet to approve the 2006 budget and that the government is operating on a reenacted 2005 budget.

Implication: There is no explicit funding for the proposed plebiscite. Consequently, funding has to come from the contingent fund. The General Appropriations Act provides that the contingent fund “shall be used to fund the requirements of new and/or urgent projects and activities that need to be implemented during the year, including the cost of local and foreign travels of the President, but in no case shall be used for the purchase of motor vehicles.

Assuming the plebiscite has assumed the highest priority of the government, an agency (logically the Commission on Elections, or Comelec) has to request, and the President has to approve, before the Budget secretary could release the fund to the concerned agency. But the Comelec has been permanently restrained by the Supreme Court (SC) from engaging in a people’s initiative for the purpose of amending the Constitution. Until the SC decision is reversed, it would be illegal for Comelec to request funding, the President to approve and the Budget Secretary to authorize the release of funds from whatever funding source.

Fact Two: The contingent fund is inadequate to fund the estimated requirements by Comelec to conduct a plebiscite.

Only P800 million is appropriated in the 2005 budget; the same amount is proposed for 2006.

The use of the contingent fund for the conduct of a plebiscite to amend the Constitution is improper:What if the government uses up totally the money for the plebiscite and then during the fiscal year, funding becomes necessary in order to achieve peace in Mindanao or to address a terrorist attack in Metro Manila or to meet a serious health emergency like bird flu? Where then would the government get the money to address any or all these contingencies?

The process is convoluted; the outcome absurd:The GMA administration proposes to go through a convoluted process of creating a new item in the budget – say, conduct of plebiscite to amend the 1987 Constitution – and then source the funding from the contingent fund. Since P800 million is insufficient, DBM would then generate “savings” from the entire budget, augment the contingent fund, and then subsequently augment the new line item on the plebiscite.

The outcome is absurd: a new item in the budget is created (without authority of Congress) and funded at a level (P2.6 billion) much higher than the funding source (contingent fund -P800 million). That this absurdity had happened in recent years does not make it legal; it is more a testament to the executive department’s audacity to violate existing budget laws and Congress’ abdication of its power of the purse.

P2.6 billion for the plebiscite represents a wasteful use of taxpayers’ money: The government just raised the value-added tax (VAT) rate from 10 to 12 percent — in effect increasing the tax burden of every Filipino. Why spend P2.6 billion for a referendum that is of dubious value? The amount is better spent for teacher training, new school buildings and classrooms, improved health care and more roads and irrigation systems. For example, P2.6 billion may be used to build approximately 10,400 classrooms.

The country’s political and economic problems flow from the doubtful legitimacy of the current leadership and poor governance – not the form of government. Spending P2.6 billion for the plebiscite is a monumental waste of taxpayers’ money.

Read this too from Malaya.