Palace maintains Arroyo spending spree 'irresponsible'

MANILA, Philippines – Malacañang stood pat on the figures cited by President Aquino in his first State of the Nation Address (SONA) and maintained that the previous administration was “fiscally irresponsible” and “immoral” by going on a spending spree during the first half of the year when no revenues were coming in.

“Oh, that comment on immoral. But as I’ve said, yes, it’s correct,” Budget Undersecretary Mario Relampagos said in a press briefing.

“If you look at our deficit for the period – January to June – we overshot the target by P51 billion and that is because of two factors: one is there was a revenue shortfall of P23 billion, which would have signaled to slow down our spending or releases. But, however, if you look at our spending for the same period, we exceeded by P27 billion,” Relampagos said.

He said former President Gloria Macapagal-Arroyo could not be made legally responsible for the releases that she made, but “there was an imbalance of the pattern in the spending of the government.”

He said the more important thing was whether the spending was justified given the fiscal situation at the time.

“You have to calibrate your releases against the fiscal situation. I mean, if you think revenues are not forthcoming, you cannot support the allotment that you issued, then you should not issue faster authorization than the inflow of revenues,” Relampagos stressed.

The Palace was reacting to the statements made by Albay Rep. Edcel Lagman in his counter-SONA, former Budget Secretary Rolando Andaya and ex-Presidential Management Staff chief, now Arroyo spokesperson, Elena Bautista-Horn that the budget figures cited by President Aquino were misleading and inaccurate because only more than half of the P1.54-trillion appropriations for 2010 had been released.

Mr. Aquino said in his SONA that he was left with only a little more than P100 billion elbow room to spend for his projects and programs for the rest of the year because the bulk of the budget had been released even without revenues generated, increasing the budget deficit to P196.7 billion in the first half of the year.

Relampagos said Lagman used May 31 figures while the Palace cited the releases made by June 30.

“When we prepared the SONA, we said that as of June 30, we have released P949.2 billion of the P1.54-trillion budget for the year,” he said.

Of the P949.2 billion, P544.5 billion went to national government agencies and departments; P86.5 billion to Special Purpose Funds; and P318.2 billion for automatic appropriations.

Relampagos said only P591.4 billion was unreleased but out of these funds, P313.1 billion was intended for automatic appropriations, including interest payments, internal revenue allotments and others that should be released and paid.

“So that is not easily within the flexibility of the budget. After deducting automatic appropriations, we have P278 billion for spending for government agencies and departments, as well as some special purposes funds,” Relampagos said.

The P278.3 billion is composed of P20.4 billion for later release to the government agencies because not all of the budgets for the agencies were released at the start of the year; P62.1 billion for congressional initiatives; P115.4 billion for personal services; P42.6 billion for maintenance and other operating expenses; and P37.8 billion capital outlay.

He said the P100 billion was taken out of the P278.3 billion that included the balances for later release and for budgets needing clearance, which “the President may declare as savings and he can use to augment his priority programs.”

But despite the lack of wiggle room for the President as far as the budget was concerned, Relampagos reiterated Budget Secretary Florencio Abad’s position that they would not ask for any supplemental budget so as not to further increase the deficit.

Abad said the new administration would make sure that the P62.1 billion for congressional insertions would not be touched since this had been vetoed by Arroyo and could only be released if there were new sources of revenues.