November 8, 2017
BREAKFAST WITH BEN: MALAMPAYA FUND, MARAWI REHABILITATION, AND INDEXATION OF MUP PENSION
Breakfast with Ben is a biweekly informal and casual discussion of Department of Budget and Management Secretary Benjamin Diokno with media to talk about the latest news on the budget, economic reforms and government policies.
November 8, 2017
This video will be broadcast live on our facebook page and website.
OP approves PHP 14.5B NDRMMF augmentation for Marawi rehabilitation; TFBM leadership reorganized
On October 30, 2017, the Office of the President approved the augmentation of the FY 2017 National Disaster Risk Reduction and Management Fund (NDRMMF) amounting to PhP 14.5 billion pesos. Geared towards providing sufficient funding for the rehabilitation of Marawi City in Lanao del Sur, the amount will be sourced from the savings of the Department of Public Works and Highways (DPWH) for FY 2016 and 2017, amounting to PhP 10.3 Billion and PhP 4.2 Billion, respectively.
Agencies are now expected to submit their respective Budget Execution Documents (BEDs) to support the release of such funds, especially for the budgetary requirements for Pre-Post Conflict Needs Assessment (Pre-PCNA) inclusive of housing, health and social welfare, business and livelihood, peace and order, and information management and strategic communications support.
Around PhP 495 Million sourced from the Quick Response Fund (QRF) of the Department of Social Welfare and Development (DSWD), the Department of Health (DOH), and the Department of National Defense (DND) has already been spent for evacuation and relief of internally-displaced families and persons.
Furthermore, a total of PhP 3 Billion has been released to DSWD to cover the funding for continuing relief, inclusive of food assistance, provision of hygiene kits, kitchen kits, family kits, sleeping kits, and collapsible water carriers. This amount would also cover DSWD’s budgetary requirements for a cash-for-work program, enlisting residents in reconstruction/rehabilitation community works and project management/ operational support.
PhP 195 Million has also been released to DPWH to cover funding for quick response, transitional shelter, and various evacuation centers in Marawi City.
Reorganization of Task Force Bangon Marawi
Following Administrative Order No. 9, the leadership of the Task Force Bangon Marawi (TFBM) has also been transferred to the Housing and Urban Development Coordinating Council (HUDCC), in order to address the urban planning requirements of the newly liberated city. Previously, the DND had the lead oversight in the planning and proceedings for the city’s reconstruction and rehabilitation while the fighting ensued. Marawi City has been liberated from the control of ISIS-backed terrorist groups on October 17, 2017, thereby indicating the start of a thorough reconstruction period. As such, the need to re-organize TFBM was borne to reflect the government’s current priority to rebuild and develop the settlement areas that were affected by the attacks.
DBM willing to participate on COA investigation of Malampaya Fund
“The DBM is not a prosecutorial body. We have other agencies for that, but we are willing to participate,” Secretary Diokno told reporters who asked what the budget department’s involvement would be in the investigation of the Malampaya Fund. “We are willing to provide necessary evidence, SARO releases, etc. We will cooperate fully on whatever the direction of the government on this matter,” he added.
The COA report on Malampaya transmitted to the Department of Budget Management (DBM) last August 31, 2017 covers the releases that the DBM made to various implementing agencies (IAs) during the period January 2004 to May 2012, involving 184 Special Allotment Release Orders (SAROs) amounting 38.8 billion pesos.
The COA report focused on “compliance by the DBM with existing laws, rules and regulations on the release of SAROs and Notice of Cash Allocation (NCAs) to the different IAs out of the Malampaya Fund.
When asked if the DBM would craft additional guidelines for the use of the fund, the Secretary said there would be ‘no need’. “Our people know what to do. It has always been the policy of the DBM to only release funds on the basis of a request,” the Budget Chief emphasized.
But the nature of the fund has made it “difficult to access and reuse”, according to Secretary Diokno.
The Malampaya Fund was created as a special fund Presidential Decree No. (PD) 910, issued by then President Ferdinand E. Marcos on March 22, 1976. The Malampaya Fund was initially set up to help intensify, strengthen, and consolidate government efforts relating to the exploration, exploitation, and development of indigenous energy resources vital to economic growth.
Under Section 8 of PD 910, the Malampaya Fund “shall form part of a Special Fund to be used to finance energy resource development and exploitation programs and projects of the government and for such other purposes as may be hereafter directed by the President.”
However, “use of the funds for ‘other purposes as directed by the President’ has been rendered unconstitutional with the Supreme Court decision on the Priority Development Assistance Fund (Belgica vs Ochoa, Jr., GR No. 208566, November 19, 2013, 710 SCRA 1).
“The government is no longer involved in [the] activity [for which the fund was created for], it’s a private sector or joint venture activity,” Secretary Diokno added. “In other words, we have a fund that is lying idle there. We cannot use it.”
As of June 30, 2017, the Malampaya Fund has a standing balance of close to 200 billion pesos, and it continues to grow, with monthly inflow from the Malampaya natural gas project.
According to the Secretary, broadening the use of the fund or changing the nature of the fund would require Congressional action.
“Looking forward, this is a clear message to all people in the bureaucracy that we should be careful in the use of public funds,” the budget chief said.
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