By Business Mirror, April 17 2019

Image Credit to Business Mirror

ALTHOUGH the P95.3-billion vetoed items in the 2019 budget law were first tagged as simply being outside the President’s priority projects, Malacañang said on Tuesday that President Duterte vetoed certain appropriations under the Department of Public Works and Highways (DPWH) because these are “riders” that violate the Constitution.

The Executive’s act effectively upheld the position of senators in the weeks-long standoff with the House of Representatives, that matters inserted after the two chambers had already ratified the bicameral version of the 2019 budget bill were illegal.

But for other infrastructure projects that are part of the government’s programmed priorities, the President has allowed the extension of implementation and payment until December 31, 2020, in view of the delayed passage of the 2019 budget and the ongoing election ban. This is on the condition that funds for these infrastructure projects have been obligated not later than December 31, 2019.

Despite this, the President still mandated the implementation of operational cash-based budgeting for the 2019 budget.

Presidential Spokesman and Chief Presidential Legal Counsel Salvador S. Panelo also confirmed on Tuesday that the vetoed funds include the last-minute insertions made in the House of Representatives.

“Those are the so-called insertions/riders. They are not part of the program by the DPWH, hence [they] violate the Constitution. It’s violative of the Constitution, because they are not—remember the decision of the Supreme Court, the decision of the Supreme Court was that if they are unprogrammed, then it violates the Constitution,” Panelo said in a Palace briefing.

This comes a day after Executive Secretary Salvador Medialdea denied that the P95.3-billion items of appropriations were considered unconstitutional. He said they were merely deemed not part of the priority list.

The President late on Monday signed the long-delayed 2019 General Appropriations Act (Republic Act 11260), amounting to P3.662 trillion.

In his veto message dated April 15, the President said: “Any provision introduced in this budget, which does not relate to a particular appropriation or those which seek to amend the Constitution and existing laws, have no place in the GAA, as these are considered ‘rider’ provisions, and therefore, must be subjected to direct veto. Likewise, items of appropriation that are not consistent with the programmed priorities are hereby vetoed.”

Duterte also vowed that he will not tolerate any attempts to circumvent the Constitution or any other action that will prejudice the Filipino people.

Legal basis

Senate Minority Leader Frank Drilon noted that Duterte’s budget veto “finds legal basis in the case of Joker Arroyo v. De
Venecia (GR 127255, August 14, 1997), where the Supreme Court ruled that “the attestations by the Speaker of the House and the Senate President serve as a solemn assurance that the measure was indeed passed by Congress.”

Drilon noted that the assurance given by Senate President Vicente Sotto III, in this 2019 case, was qualified. “The Senate President only attested to the approval of that portion of the bill not affected by the realignments. Thus, the President’s line-item veto is based on legal and constitutional grounds, and not because the President sided with the Senate.”

Sen. Sherwin Gatchalian, in a separate statement, said that despite the presidential veto, he felt “relief” that the delayed 2019 budget bill was finally law.

“As chairman of the Senate Committee on Economic Affairs, I am relieved that the 2019 budget has finally been signed, primarily because further delay would have caused adverse effects on our macroeconomy,” said Gatchalian, adding: “I also appreciate that the President has chosen to veto the changes made by the Lower House to the ratified version of the General Appropriations Bill.”

Gatchalian stressed that “the veto is proof that the Senate was right all along in saying that the changes made were unconstitutional.” The senator added that with the General Appropriations Act now enacted, the “government can finally focus on catching up with the implementation of pending projects that were delayed because of the budget impasse.”

For her part, Sen. Grace Poe reminded fellow lawmakers that “our task does not end here.”

“Equally important is to see to it that the money is spent where it was allocated, and is felt by the people,” said Poe.

Vetoed items

The P95.3-billion items of appropriations under the DPWH budget comprised: Provisions for General Administration and Support (P350,000,000), Provisions for Support to Operations (P460,000,000) and Provisions for Capital Outlays (P94, 564,241,000).

Comprising the biggest bulk of provisions for Capital Outlays were those for Local Roads and Bridges (P42,611,461,000) followed by Flood Control and Drainage(P24,036,850,000), National Roads and Bridges (P17,161,390,000), Building and other Structures (P10,503,290,000), and Water Management (P251,250,000).

Aside from P95.3 billion, some general and special provisions were also vetoed, while other provisions were subjected to conditional implementation to ensure conformity with existing laws, policies, and rules and regulations.

Those under conditional implementation include allowance and benefits of teachers and creation of teaching positions, construction of evacuation centers, funding for foreign-assisted projects, revolving fund and lump-sum appropriations for capital outlays, as well as financial assistance to local government units and funding requirements of our foreign service, among others.

“With this approved National Budget of P3.66 trillion for FY 2019, we will continue to strengthen the framework of our economy, ensure peace and security on our lands and seas, and provide efficient public services that every Filipino deserves,” Duterte said.

Although the budget passage encountered several bumps along the way, Duterte chose to be optimistic of what lies ahead.

“Admittedly, the passage of the FY 2019 budget was not as smooth as we had hoped for. But we can look back at this experience positively if we choose to see certain delays as manifestation of our legislators’ commitment to the exercise of the power of the purse for the common good,” he added.

The 2019 budget was delayed by a number of issues, including the Senate’s quarrel with the House over the post-bicameral ratification changes by the House leadership, the alleged P75-billion budget insertion to the DPWH and the controversial budgeting system shift of the government from obligations-based to cash-based.

House defers to Duterte

The House leadership said it respected the President’s decision to veto some items in the 2019 GAA.

Majority Leader Fredenil Castro of Capiz said, “We respect the thorough study made by his team after all factors were considered.”

House Committee on Appropriations Chairman Rolando Andaya Jr., who led the weeks-long word war with senators, reiterated that they have been transparent as to the authorship of the  amendments.

“The Senate has been silent about theirs.  It’s time to break their omertà,” he said.

Andaya insisted the printed House version is completely authorized and compliant with the ratified Bicameral Report.

Veto shows focus—DOF

The Department of Finance (DOF), meanwhile, said the President’s act underscores his commitment to implement expenditures on projects and activities that will benefit all Filipinos.

“The FY [fiscal year] 2019 [budget] has just been signed with the line-item veto in the total amount of P95 billion under DPWH [Department of Public Works and Highways] covering projects that are not included in the programmed priorities. We fully support the President in his desire to focus national expenditure on projects and activities that redound to the benefit of all Filipinos and stimulate the growth of the economy providing job and income opportunity for the least advantaged,” Dominguez said.

The government has been operating under a 2018 reenacted budget since January this year, as a result of the deadlock between the two chambers of Congress over the final version of this budget bill.

The delay in the passage of the 2019 national budget has prevented the Duterte administration from spending P43.7 billion on its economic stimulus programs in the year’s first two months alone, according to the DOF.

This then led to a revision on the government’s growth projections for this year with the Development Budget Coordination Committee (DBCC) reducing the country’s gross domestic product (GDP) growth target to 6 to 7 percent this year, from the previous 7 to 8 percent.