The document discusses reforms to the Philippine budgeting process proposed by the Freedom from Debt Coalition. It recommends (1) repealing laws that automatically appropriate funding for debt service payments, in order to restore Congress' power over spending; (2) defining terms like "savings" and regulating the president's powers around budget impoundment and reallocation to prevent overreach; and (3) conducting a congressional audit of public funds spent through non-itemized mechanisms to ensure transparency. The FDC supports related bills filed in Congress to implement these reforms and increase oversight of the national budget.

1. Towards Fiscal Democracy
Freedom from Debt Coalition (FDC)
on the 2015 Budget Deliberations
September 10, 2014

2. 1. Repeal Automatic Debt Service
Appropriations (1 of 2)
• Section 26(B), Book VI of the 1987 Revised
Administrative Code / Executive Order (EO) 292
says that: “all expenditures for ... (b) principal and
interest on public debt, ... are automatically
appropriated.”
• Compromises the Congress’ “power of purse”
– Congress cannot increase the budgetary ceiling
(Article VI, Section 25-1 of the 1987 Constitution)
– Executive can unilaterally contract loans (Article VII,
Section 20 of the 1987 Constitution), retains option to
limit Congress’ fiscal space in the future by increasing
the deficit today

3. 1. Repeal Automatic Debt Service
Appropriations (1 of 2)
• The 16th Congress must take a second look at
the following bills:
• House Bill 3302 [An Act Restoring To Congress
The Power To Appropriate Payments On Debt
Service] filed by Rep. Rufus B. Rodriguez
• House Bill 3460 [An Act Repealing The
Automatic Appropriation For Debt Service]
filed by Rep. Neri Colmenares

4. 2. Budget Reforms to End Fiscal
Dictatorship (1 of 4)
• Enablers of “Fiscal autocracy”
1. Impoundment. Section 38, Book VI of the 1987 RAC
2. Reallocation of Savings. Section 39, Book VI of the
1987 RAC
– Combined with Section 38, may be interpreted as power
to realign allocations.
3. Line-Veto. Article VI, Section 27(2) of the 1987
Constitution
4. Reenacting Budgets. Article VI, Section 25(7) of the
1987 Constitution
– vulnerable to lump-sum budgets from “savings” from a
reenacted budget.

5. 2. Budget Reforms to End Fiscal
Dictatorship (2 of 4)
• Must prevent the abuse of “savings”, “deficit”,
“augment”, “impoundment”, “reenacted
budgets”, and other budgetary terms that only
serve to clip the Congressional power of the
purse.
• FDC supports following bills filed by Rep.
Ibarra M. Gutierrez and former FDC President
Rep. Walden Bello:

6. 2. Budget Reforms to End Fiscal
Dictatorship (3 of 4)
• House Bill 2256 [An Act Defining The Concept Of
Savings And Regulating The Process Of
Augmentation By The President]
• House Bill 2257 [An Act Regulating The Power Of
The President To Defer, Rescind, Or Reserve
Expenditure Of Appropriations Authorized By
Congress]
• House Bill 3128 [An Act Prescribing Reforms In
National Government Budgeting To Conform
With Article Vi, Sections 24, 25 And 29 Of The
1987 Constitution]

7. 2. Budget Reforms to End Fiscal
Dictatorship (4 of 4)
• Defines augment, deficit and savings.
• Defines a re-enacted budget and does
not consider it as a lump sum budget.
• Procedure for impoundment, deferral
and rescission is prescribed (special
message by President to Congress).
• Among many others

8. 3. Congressional Audit of Public Funds
• Conduct a Congressional Audit of Public Funds,
including the projects financed by spending
mechanisms that are not itemized in the GAA
– DAP, Congress’ own Priority Development Assistance
Fund (PDAF), the Judiciary Development Fund (JDF)
• Need to know whether irregular programs and
projects had been financed through loans, and
whether the creditors are complicit to the
irregularities.

9. • Financing for Participatory Energy Planning
Process for 17 pilot provinces (one per region)
• Rehabilitation of the Agus and Pulangui
Hydropower Complex
• Increase Appropriation for SPUG Capital Outlay.
• Provide finance mechanism of Php 12.8 Billion for
40 MW solar rooftop installation to kickstart net-metering
in Metro Manila and Cebu
• Earmark 5% of CCC budget for policy and
program monitoring, impact and assessment
related activities.
• Formulate the guidelines for the mobilization of
PSF funds amounting to Php 1B.
• Allocate funding for the revival of train system
from La Union, Bicol and Batangas to address
decongestion

10. Towards Fiscal Democracy
Freedom from Debt Coalition (FDC)
on the 2015 Budget Deliberations
September 10, 2014