GMA to impound 'pork' when needed - Palace

MANILA, Philippines - President Arroyo will exercise her power to impound certain portions of the proposed P1.542-trillion 2010 national budget whenever necessary, Malacañang said yesterday.

The bicameral conference committee of the proposed 2010 General Appropriations Act (GAA) has reportedly inserted a provision that would make it difficult for the President to impound certain parts of the budget, particularly their pork barrel allocations.

Presidential economic spokesman Gary Olivar said Mrs. Arroyo would use her power to impound despite restrictions that may have been inserted in the proposed budget.

“The President still has that power to impound despite any restrictions that may have been placed upon her by this Congress. If she deems it necessary, urgent, she would certainly exercise that power,” Olivar told a news briefing.

Budget Secretary Rolando Andaya said impounding is practiced when revenues are scarce and could not fund some of the provisions in the budget.

“In essence, it’s important to remember that the budget is just spending authority. What is more important are revenues that would support that authority to spend,” Andaya said.

“In the end, fiscal discipline will be the guiding principle when the President prepares her veto message,” he added. 

One of the provisions usually vetoed is the reduction of appropriations for debt service.

Andaya said impounding is not a “totally conscious” move, and is dependent mainly on the availability of funds. He said the government has revised its deficit targets for the year several times because of poor collections caused by the global financial crisis. 

He said this is not the first time that a provision to make impounding difficult for the President was inserted in the GAA.

Olivar said the government would likely raise power rates if it cannot collect enough revenues for debt payments.

“If we do not appropriate for debt service, then what happens by the end of the year? Unless we come up with the additional revenues or the cut in expenses to cover that amount, automatically, we’re going to higher power rates,” he said.

“So exercising her power in a scenario like that is clearly an exercise of fiscal responsibility that she would owe to our country. This is just one example. If there are other examples that would require our attention in this manner, you can be sure that the President will act with the usual decisiveness,” he added.

Olivar said lawmakers should also explain to the public why their pork barrel allocations should not be suspended when revenues are scarce.