Ex-Finance chief calls for cuts in unprogrammed appropriations

Former Finance secretary Margarito “Gary” Teves on Thursday called on lawmakers and policymakers to reduce unprogrammed appropriations in the national budget.

In a statement, Teves said reducing unprogrammed appropriations would allow the Department of Finance (DOF) to focus on increasing revenues instead of scrutinizing the funds of government-owned and-controlled corporations (GOCCs) for excess resources which could be tapped to bankroll unprogrammed projects.

Sought for reaction, Finance Secretary Ralph Recto said, “I agree with the statement of former sec. Gary Teves. I don’t expect this to continue next year."

The former Finance chief during the administration of former President Gloria Macapagal Arroyo made the recommendation amid the issue of diverting idle or unused GOCCs funds, such as PhilHealth’s P89.9 billion, back to the Treasury to finance unprogrammed appropriations.

The Department of Budget and Management (DBM) had earlier bared a list of over P200 billion worth of programs and projects, which are under unprogrammed appropriations, which could be funded by excess funds of state firms. 

Teves said the government should instead find ways to ensure that government priority programs and projects are included in programmed appropriations.

He pointed out that in 2023 and 2024 “unprogrammed appropriations reached P807.2 billion and P731.4 billion, or 15% and 13%, respectively, of the national government budget. 

“This is more than double the 5% average from 2010-2022,” he added.

“A reasonable amount of unprogrammed appropriations is necessary to cover expenses arising from unforeseen events since the national government budget is prepared one year ahead of time,” the former Finance chief said, adding that "moving crucial social and infrastructure projects from programmed to. unprogrammed is not only questionable but also undermines the government’s commitment to inclusive development and fiscal prudence.”

Teves also expressed concern that including key priority items under unprogrammed appropriations—such as the upgrading of health facilities, the training of health professionals, payment of government personnel benefits, and construction of housing for the poor— could result in “delayed implementation of vital programs since there is no definite funding source.”

He said the Legislative-Executive Development Advisory Council (Ledac) should be convened “as a platform to allow the executive and legislative branches to agree on the priority programs that should strictly remain programmed and budget items that will be placed under unprogrammed.”

“This could be done for the proposed 2025 NG budget before the deliberation in the bicameral conference committee. The Ledac can be convened for succeeding years before the NG budget is formally sent to Congress,” he added.

“Given all this, it is necessary to unburden the finance secretary from scrutinizing financial statements of each GOCC in search of idle funds just to finance the rising unprogrammed appropriations,” Teves said.

“It would be more efficient and practical for the finance secretary to focus on his primary role of increasing collection efficiency from existing taxes, recommending necessary new tax measures, and ensuring that we are within prudent international standards in managing our fiscal deficit and debt,” he said.—LDF, GMA Integrated News