New oversight panel for gov’t projects costing P1 B eyed

Albay Rep. Jose Salceda is proposing the creation of a congressional oversight committee that will approve government projects costing P1 billion and above.

This committee, he said, would be separate from the National Economic and Development Authority-Investment Coordinating Council (NEDA-ICC), which approves all government and foreign-funded projects.

Salceda announced his proposal during the breakfast forum of the Manila Overseas Press Club (MOPC) yesterday at the Ristorante La Dolce Fontana in Greenhills, San Juan.

At the same forum, Trade and Industry Secretary Cesar Purisima bared a three-pronged strategy for generating livelihood for six million Filipinos.

The first strategy, said Purisima, is to encourage both domestic and foreign investments in the country. The second is to encourage infrastructure projects that will also help pump-prime the economy. Third is to promote the growth of small and medium enterprises (SMEs).

In attracting investments, Purisima said the Philippines is looking at the services sector as the area where the country has a comparative advantage.

Meanwhile, in pushing for a separate committee that will approve government projects worth P1 billion and above, Salceda wants Congress to take a more active role in restraining the accumulation of public sector debt.

He said that of the P2.011-trillion debt accumulated by the national government from 1997 to 2003, 43 percent was due to borrowings to finance the deficit, 19 percent was due to the depreciation of the peso, one percent was due to an actual cash increase while 37 percent was due to non-budget or off-book borrowings of government-owned or controlled corporations (GOCCs).

The increase in the debt stock due to unrestrained borrowings of GOCCs is alarming especially since these agencies embark on massive and costly projects for which the government ends up paying, Salceda said.

Congress, he stressed, "must correct this fundamental anomaly" by ensuring that it gives prior approval for all big government projects.

"It’s time to make them (GOCCs) accountable since their mistakes are being paid for by government and ultimately by the people," said Salceda, who is also a member of President Arroyo’s Economic Managers Group.

He disclosed that many GOCCs undertake projects funded through foreign loans and guaranteed by government. But many of the projects go sour or do not make profitable returns so the government, as guarantor, has to shoulder the debts. Worse, the debt payments are automatically appropriated so Congress has no way of stopping the cash outflow from the national coffers.

Among the heavily indebted GOCCs are the National Power Corp., National Food Authority, Light Rail Transit Authority and the Public Estates Authority.

Camarines Sur Rep. Rolando Andaya, chairman of the House appropriations committee in the 12th Congress, noted that 12 GOCCs racked up a combined loss of P169.9 billion for the national government from 2001 to 2003.

He said some GOCCs even require government subsidies estimated at P6 billion a year just to keep them afloat. He then urged Malacañang to strictly screen nominees to the GOCCs to ensure that those who get appointed will optimize the gains of GOCCs and minimize losses.

He said Malacañang should also enforce its earlier directive to cut the allowances and other perks of government appointees to "juicy corporations."

Meanwhile, because of the growing debt burden, Salceda said it is now imperative for the government to resort to new taxes to fund the budget rather than rely on tax efficiency. However, improving tax administration is expected to generate only P102 billion in revenue.

Several new revenue streams have been identified, including sin taxes, sex taxes, fuel tax, a shift to a gross income taxation, text tax, franchise tax, telecom tax, extended motor vehicle users tax, rationalization of incentives, raising administrative charges and an increase in the value-added tax.

In shifting to gross income taxation, Salcedo estimates that government could only raise an additional P30 billion while about P300 million would be generated from the proposed "sex tax" on motels and inns.