Towards Fiscal Democracy

Freedom from Debt Coalition (FDC) on the 2015 Budget Deliberations

September 10, 2014

1. Repeal Automatic Debt Service Appropriations (1 of 2)

• Section 26(B), Book VI of the 1987 Revised Administrative Code / Executive Order (EO) 292 says that: “all expenditures for ... (b) principal and interest on public debt, ... are automatically appropriated.”

• Compromises the Congress’ “power of purse” – Congress cannot increase the budgetary ceiling

(Article VI, Section 25-1 of the 1987 Constitution)– Executive can unilaterally contract loans (Article VII,

Section 20 of the 1987 Constitution), retains option to limit Congress’ fiscal space in the future by increasing the deficit today

1. Repeal Automatic Debt Service Appropriations (1 of 2)

• The 16th Congress must take a second look at the following bills:

• House Bill 3302 [An Act Restoring To Congress The Power To Appropriate Payments On Debt Service] filed by Rep. Rufus B. Rodriguez

• House Bill 3460 [An Act Repealing The Automatic Appropriation For Debt Service] filed by Rep. Neri Colmenares

2. Budget Reforms to End Fiscal Dictatorship (1 of 4)

• Enablers of “Fiscal autocracy”1. Impoundment. Section 38, Book VI of the 1987 RAC2. Reallocation of Savings. Section 39, Book VI of the 1987

RAC– Combined with Section 38, may be interpreted as power to

realign allocations.

3. Line-Veto. Article VI, Section 27(2) of the 1987 Constitution

4. Reenacting Budgets. Article VI, Section 25(7) of the 1987 Constitution – vulnerable to lump-sum budgets from “savings” from a

reenacted budget.

2. Budget Reforms to End Fiscal Dictatorship (2 of 4)

• Must prevent the abuse of “savings”, “deficit”, “augment”, “impoundment”, “reenacted budgets”, and other budgetary terms that only serve to clip the Congressional power of the purse.

• FDC supports following bills filed by Rep. Ibarra M. Gutierrez and former FDC President Rep. Walden Bello:

2. Budget Reforms to End Fiscal Dictatorship (3 of 4)

• House Bill 2256 [An Act Defining The Concept Of Savings And Regulating The Process Of Augmentation By The President]

• House Bill 2257 [An Act Regulating The Power Of The President To Defer, Rescind, Or Reserve Expenditure Of Appropriations Authorized By Congress]

• House Bill 3128 [An Act Prescribing Reforms In National Government Budgeting To Conform With Article Vi, Sections 24, 25 And 29 Of The 1987 Constitution]

2. Budget Reforms to End Fiscal Dictatorship (4 of 4)

• Defines augment, deficit and savings.• Defines a re-enacted budget and does

not consider it as a lump sum budget. • Procedure for impoundment, deferral

and rescission is prescribed (special message by President to Congress).

• Among many others

3. Congressional Audit of Public Funds

• Conduct a Congressional Audit of Public Funds, including the projects financed by spending mechanisms that are not itemized in the GAA – DAP, Congress’ own Priority Development Assistance

Fund (PDAF), the Judiciary Development Fund (JDF)• Need to know whether irregular programs and

projects had been financed through loans, and whether the creditors are complicit to the irregularities.

• Financing for Participatory Energy Planning Process for 17 pilot provinces (one per region)

• Rehabilitation of the Agus and Pulangui Hydropower Complex

• Increase Appropriation for SPUG Capital Outlay. • Provide finance mechanism of Php 12.8 Billion for 40

MW solar rooftop installation to kickstart net-metering in Metro Manila and Cebu

• Earmark 5% of CCC budget for policy and program monitoring, impact and assessment related activities.

• Formulate the guidelines for the mobilization of PSF funds amounting to Php 1B.

• Allocate funding for the revival of train system from La Union, Bicol and Batangas to address decongestion

Towards Fiscal Democracy

Freedom from Debt Coalition (FDC) on the 2015 Budget Deliberations

September 10, 2014