Gov't told not to withhold release of development funds

Senate Minority Leader Aquilino Q. Pimentel, Jr. (PDP-Laban) today urged the Arroyo government to stop its practice of withholding development funds to stimulate the economy and to help shield the country from the impact of the financial crisis that has hit the United States and Europe.

With the US-Europe financial meltdown expected to reduce the inflow of foreign investments into the country, Pimentel said a hike in public spending for infrastructures and other development projects will increase the money in circulation and help stabilize the economy.

The minority leader made the suggestion in response to reports about the government's tendency to withhold the release of funds even for essential programs and projects that are covered by the national budget despite the availability of money. Such practice, he said, is being resorted to in order to generate savings and narrow down the budget deficit ostensibly to impress foreign creditors and international credit rating agencies.

"Whatever funds that are being frozen by the government without sound and justifiable reasons should be released. That is the immediate solution," he said.

At the same time, Pimentel called on Malacanang to heed the suggestion of congressional leaders to suspend or scrap the tariff on oil and the l2 percent Value Added Tax on petroleum products to help ease the economic hardship of the people.

He said the temporary suspension of oil tariff and VAT on petroleum products will reduce the cost of production and distribution of prime commodities, and bring down their market prices.

Pimentel said the very high power rates, resulting from excessive taxes, has been blamed by the business community as one of the major reasons for turning off foreign investors.

He also criticized the Arroyo administration for its decision to sell the government's remaining 40 percent share in the Petron oil company. He said this will only have effect of further eroding the government's ability to influence market prices of petroleum products.

With the financial meltdown in the US and Europe, we should rethink the mass privatization of government corporations. Unbridled capitalism is disastrous to the economy," the senator from Mindanao said.

Earlier, Pimentel had challenged the Arroyo government to refute the claim of former Budget and Management Secretary Benjamin Diokno that it has impounded about Pll8 billion of the authorized appropriations of some departments last year and transferred the "imaginary savings" to favored agencies and state corporations without congressional approval.

Diokno, in a published report, said the supposedly unreleased funds, equivalent to 17 percent of the total national budget for 2007, included P29.9 billion in the Department of Education, P2.5 billion in the Autonomous Region in Muslim Mindanao, P4.6 billion in the Department of Public Works and Highways, P3.8 billion intended for the Agriculture and Fisheries Modernization Program under the Department of Agriculture and P6 billion in Priority Development Assistance Fund intended for projects of lawmakers.

"This is a grave allegation and if true, this means that the government is unnecessarily scrimping on its spending to generate savings to the detriment of programs meant to spur economic growth and alleviate poverty," Pimentel said.

"The President cannot unilaterally withhold the release of funds and realign the same to other agencies or projects without impairing the integrity of the appropriations law and tramping upon the power of Congress over the purse."