DBM: No more lump sums in 2013 budget

MANILA, Philippines - The Aquino administration will be doing away with the lump sum funds in the proposal for next year’s budget since all agencies will be required to provide “comprehensive details” for government allocations, Budget and Management Secretary Florencio Abad said yesterday.

Abad said this policy is in line with the President’s “transparency and accountability in public expenditure” in a move to minimize, if not eradicate corruption in the bureaucracy.

“Under the proposed 2013 budget, only a small amount of lump sum funds will be appropriated under the Special Purpose Funds (SPFs) of the National Expenditure Program,” he said.

Unlike in the past administration, Abad said, “large items under agency budgets were not broken down into specific projects, and this practice opened up a lot of legroom for irregularities in expenditure.” 

“Now that we’ve discontinued agency lump sums for 2013 appropriations, program implementation among departments will be more efficient and transparent,” he said.

According to Abad, this will include allotments for the Calamity Fund and Miscellaneous and Personnel Benefit Funds (MPBF), among others.

Lump sum budgets in departments will be fleshed out and disaggregated into programs and projects for distribution. The disaggregated funds will subsequently be distributed by agencies to implementing units, according to program strategy and focus.

The DBM will also separate remaining lump-sum amounts within agency budgets into their component projects.

“The disaggregation of lump sums also paves the way to very important breakthroughs. Because projects under lump sums will be subject to scrutiny and approval, the national budget itself will also stand as a comprehensive release order,” Abad said.

“The need for Special Allotment Release Orders and Agency Budget Matrices will be eliminated, thus increasing efficiencies in budget execution,” he said.

Abad added early budget preparations will help the government achieve its primary goal of generating revenues equivalent to 14.5 percent of the country’s gross domestic product (GDP).

President Aquino also intends to keep the national tax effort at 13.4 percent to fund government expenditures amounting to 16.5 percent.

The budget preparation also seeks to reduce the budget deficit to two percent of GDP. This will lower the national government debt to levels comparable to those of peer countries in the medium-term.

“For the ongoing budget preparation for 2013, we will definitely strengthen the linkage between development planning and budgeting. We’re also going to increase the likelihood of accomplishing development goals by considering the resource requirements of key agencies as reflected in the Philippine Development Plan (PDP) and the Medium Term Public Investment Program (MTPIP) for fiscal years 2011-2016,” Abad said.