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Consolidating Consensus, Advancing People’s Struggles and Building Alternatives
The Freedom from Debt Coalition (FDC) appeals to the 16th House of Representatives to push for crucial budget reforms in the last two years of the Aquino administration. Doing so will bring us closer to fiscal democracy and add credence to the administration’s maxim of “Tuwid na Daan”. Congress must assert its “power of the purse”, produce regular and transparent budgetary allocations, and work toward ending discretionary measures in the budget.
1. Repeal of the Automatic Appropriations Act
Section 26(B), Book VI of the 1987 Revised Administrative Code as instituted by Executive Order (EO) 292 says that: “all expenditures for ... (b) principal and interest on public debt, ... are automatically appropriated.”
Automatic appropriation for debt severely compromises the legislative’s “power of the purse”. Since Congress cannot increase the budgetary ceiling (Article VI, Section 25-1 of the 1987 Constitution, as affirmed by Sec. 24, Book VI of EO292) only a little amount of the budget is left for Congressional reallocation. Moreover, since the executive can unilaterally contract loans (Article VII, Section 20 of the 1987 Constitution), the executive retains the option of further constraining whatever future limited fiscal space Congress may have by increasing the deficit today.
It was during the Martial Law in the Philippines that automatic appropriation for debt service was first codified, in Section 31(B) of Presidential Decree 1177 (Budget Reform Decree of 1977). In consonance with her “honor-all-debts” policy, President Corazon Aquino signed into law the Administrative Code of 1987, copying en toto Section 31(B) of PD1177 into Section 26(B) of the code. Section 31(B) of PD1177 also serves as its legal basis.
FDC enjoins Congress to reclaim its power to set budget levels by repealing this archaic provision in the budget law. The 16th Congress must take a second look at the following bills:
The vast fiscal powers of the President have recently been tested by the decision of the Supreme Court on the Disbursement Acceleration Program (DAP). These powers have been exercised not only by the current administration but also by its predecessors. FDC insists that the roots of what we called as “fiscal dictatorship” are structural rather than conjunctural. As early as 2008, during the 2009 budget deliberations, FDC already informed the House of Representatives of the following key enablers of fiscal autocracy:
It is high time to finally clarify the ambiguous provisions of our budget law that enable fiscal dictatorship. Specifically, we 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. Thus, FDC lends its support to the following bills filed by Rep. Ibarra M. Gutierrez and former FDC President, Rep. Walden Bello:
Finally, FDC enjoins the 16th Congress to conduct a Congressional Audit of Public Funds, including the projects financed by the DAP, Congress’ own Priority Development Assistance Fund (PDAF), the Judiciary Development Fund (JDF) and other spending mechanisms that are not itemized in the General Appropriations Act (GAA). Moreover, there is a need to know whether irregular programs and projects had been financed through loans, and whether the creditors are complicit to the irregularities.