The Department of Budget and Management expressly denies the facilitation of a “fund scam” in the Flood Mitigation Structures and Drainage Systems program of the Department of Public Works and Highways.In a hearing by the House Committee on Rules, Committee Chairperson and House Majority Leader Congressman Rolando Andaya, Jr. cited an amount of P332 billion allocated for “non-existent” flood control projects. This purportedly comprises P213 billion worth of appropriations in 2017 and 2018 and the proposed allocation of P119 billion for 2019.The DBM believes that citing these amounts to present a picture of a “flood control scam” facilitated by the DBM is irresponsible and misleading.First, the amount representing the proposed allocation for FY 2019 cannot be accounted for yet. There are no existing projects for 2019 as the 2019 budget has yet to be legislated, much less implemented.
Second, the amounts allocated in the FY 2017 and 2018 GAA were reviewed, amended, and approved by both Houses of Congress before approval of the President.
The DBM would also like to refute claims that it has allocated funds with preferential treatment to certain areas or districts.
The DBM has no hand in determining the projects that should be implemented and in which areas or districts. This is the job of the implementing agency; in this case, the DPWH.
There are technical requirements set by the DPWH that need to be satisfied for projects to be considered for inclusion in their project listing. In the case of flood control works, the requirements are listed in DPWH Department Order No. 23, s. of 2015.
Even then, the DBM is not privy to the specific project listing for the projects under each program and region during budget preparation. The agency budget proposal submitted by the DPWH will only present their target allocation for the upcoming fiscal year by program (i.e. roads, bridges) and total allocation per region. The DBM evaluates each program based on the program’s budget utilization rates in previous years.
Budget and Management Secretary Benjamin E. Diokno vehemently refutes the allegations hurled by Majority Leader Rolando Andaya, Jr. in the public hearing conducted by the House Committee on Rules yesterday in Naga City, Camarines Sur.“His accusations are illusory. The numbers are wrong and the narrative he’s selling is not grounded on facts,” said Secretary Diokno.On the allegation that the DBM adjusted the DPWH budget without the latter’s knowledge
The original budget proposal of the DPWH was PhP 652 billion, not PhP 488 billion as Congressman Andaya claimed in the Question Hour last December 11, 2018. The DBM then initially approved PhP 480.2 billion out of the PhP 652 billion budget request of the DPWH.
But in the final phase of budget preparation, the total public infrastructure budget was still short of the government’s commitment to disburse at least 5% of Gross Domestic Product (GDP) for infrastructure. This is why the budget of the DPWH was adjusted by PhP 75.5 billion.
Given the adjustment, it was the DPWH who filled out their budgetary allocation with the specific project listing. The mandate of the DBM is limited to setting the budget ceiling and evaluating agency proposals by program (not by project because that is the role of the implementing agency).
Hence, in the 2019 National Expenditure Program (NEP), the total budget for the DPWH is P555.7 billion. This was presented and approved by the Cabinet in a cabinet meeting on July 9, 2018.
On the allegation that the DBM anomalously allocated funds for flood control projects in the 2019 NEP
Of the PhP 652 billion budget proposal of the DPWH in 2019, PhP 132.5 billion was for flood control projects (including foreign-assisted projects). In the 2019 NEP, flood control projects by the DPWH totaled PhP 114.3 billion (including foreign-assisted projects), well below its initial funding request for flood control structures.
More so, the DBM is not privy to the breakdown of DPWH projects per district. It is DPWH, as an implementing agency, that determines the specific project listing for the projects under each program and region.
On the allegations that the DBM has a favored contractor
The DBM is not involved in the implementation of projects and awarding of contracts. Contracts are awarded to contractors after open and competitive bidding in accordance with the Republic Act 9184 or the Government Procurement Reform Act. This much was confirmed by DPWH Assistant Secretary Antonio Molano, Jr. in an interview with CNN Philippines (https://twitter.com/cnnphilippines/status/1080814679679688705 at the 2:20 mark).
Again, the role of the DBM is to set the budget ceiling for the line agencies and to evaluate whether their programs are aligned with the government’s priorities.