DBM chief defends 607% hike in President’s budget

MANILA, Philippines – Budget Secretary Benjamin Diokno defended yesterday the more than 600-percent increase in funding for the Office of the President (OP).

The OP outlay soared from P2.8 billion in 2016 to P20.2 billion this year, or a whopping P17.4-billion increase.

Diokno told GMA-7 that P15.5 billion of the huge OP outlay is allocated for expenses related to the country’s hosting this year of the 50th anniversary of the Association of Southeast Asian Nations (ASEAN). That leaves the OP proper with P4.7 billion.

Diokno admitted that President Duterte’s intelligence fund grew five-fold compared to the same appropriation during the time of his predecessor, former president Benigno Aquino III, from P500 million to P2.5 billion.

“It’s principally because of the President’s campaign against illegal drugs. He needs it,” he said.

During the budget hearings in the House of Representatives, Diokno was asked why the ASEAN anniversary-related appropriations were part of the OP budget and not added to the agencies’ individual outlay.

He said the agencies did not know yet exactly how much they would need.

This prompted opposition Rep. Edgar Erice of Caloocan City to say that the P15.5-billion funding was “at best a guesstimate.”

Malacañang has attracted controversy in relation to the hosting of the ASEAN event when it awarded a P1-billion contract to an events organizer.

Lawmakers are questioning the need for an organizer in the first place, when there is a national organizing committee led by former ambassador Marciano Paynor Jr. and composed of representatives from various agencies.

They noted that the Aquino administration hosted the Asia-Pacific Cooperation (APEC) leaders’ summit, which was a much bigger gathering, on a smaller budget and did not hire an events manager.

Of the P20.2-billion budget for President Duterte’s office this year, only P707 million will go to salaries, while maintenance and other operating expenses (MOOE) will amount to P19.3 billion. The P15.5 billion for the ASEAN hosting is part of MOOE.

Of the P15.5 billion for the ASEAN event, P11.5 billion will be used by the President’s office, P2 billion will go to the Department of the Interior and Local Government, P1.5 billion to the Presidential Communications Operations Office (PCOO), P749.6 million to the Department of Tourism and P177.7 million to the Department of Trade and Industry.

The allocations are on top of the five agencies’ own budgets for 2017.

The P1.5 billion for ASEAN-related activities for PCOO is P300 million more than its P1.2-billion budget.

The OP outlay also includes P7.6 billion for representation and entertainment expenses, P2.1 billion for consultants, another P2.1 billion for travel, P2.3 billion for rent and P1.3 billion for communication.

Erice has said the Aquino administration spent an amount much smaller than the P15.5 billion for the APEC leaders’ summit in 2015.

And yet, APEC is a much larger organization composed of 21 economies, including the United States, Australia and China, while ASEAN is made up of only 10 countries, he said.

Priority projects

 Meanwhile, Diokno has issued a memorandum directing government agencies to identify priority projects for 2018 to ensure they get appropriate budgets while remaining compliant with Supreme Court decisions on the Priority Development Assistance Fund (PDAF) and the Disbursement Acceleration Program (DAP).

Unlike in his previous tenure as budget chief, Diokno said he is always on the go in his latest post as he is “actively seeking for good projects all over the country.”

He said he has been asking for possible projects in Palawan, Bohol, Albay and Siargao.

“So, as I said, this budget and future budgets will be compliant with the two Supreme Court decisions, okay. That’s why I have also filed the Budget Reform Bill so that after us, maybe the next president or next, next presidents will try to honor the Supreme Court decision,” he said.

The SC order prohibits realignment of funds already approved by Congress. The SC also declared as unconstitutional the lumping of savings under one common fund such as DAP, as what was practiced during the previous Aquino administration.

Diokno also said projects are being readied to provide road linkages to the Visayas and Mindanao.

“So we’re looking for those projects. We’re planning to link, for example, Matnog to Southern Leyte,” he said.

“And then maybe link up Leyte with Mindanao, right? So you can now travel by car from Luzon to Mindanao. That’s an ambitious project and I think we can finance it if we just put our mind to it,” Diokno added.

In a press briefing, Diokno stressed it’s the Duterte administration’s goal to sustain the seven-percent growth rate.

“The way I see it, the Duterte government wants to have a growth rate of seven percent sustained,” he maintained.

“So, 2017 budget is a down payment for that desire. So for example, if you look at the 2017 budget, 5.4 percent of GDP will go to public infrastructure. That has never been done before in the history of the country,” he pointed out.

He explained that the improved peace and order condition is “a precondition” to achieving the country’s growth target, and that there is a need to address the infrastructure gap and to boost investment in human services.

“We need to cut the cost of doing business. We are ranked very low in that regard and if we want to attract foreign investors we need to do that,” he added.

Diokno also voiced support for congressional efforts to have a competitive tax system – including the need to reduce the income tax bracket for workers.

“Our tax system compares poorly with our neighbors. We’re lucky that we belong to what they call the fastest growing region in the world which is Asia and Southeast Asia,” he said.

“So if we manage to grow at seven percent, we become the fastest growing country in the fastest growing region in the world and that’s an honor, right? That would be an accomplishment.”

Diokno also said bigger spending would keep the economy on the growth track.

“So I reckon that we should be spending something like P8 trillion to P9 trillion for public infrastructure,” he said. “This is over and above what we are spending for PPP projects, okay? So we know that’s consistent with the President’s build, build, build.”

PPP stands for public-private partnership.