The Department of Budget and Management (DBM) has shrugged off criticisms raised by some lawmakers against the hefty unprogrammed funds under the Marcos administration’s proposed national budget for next year.

Budget Secretary Amenah F. Pangadaman on Wednesday, Aug. 31, said the DBM is ready to defend the P588.1 billion standby funds under the proposed P5.268-trillion national expenditure program (NEP) for 2023.

Pangadaman also categorically said that there was "no irregularity in allocating unprogrammed funds” and the “DBM stands firm on its position.”

“Details of these unprogrammed appropriations (UA) are available for public and Congress scrutiny,” Pangandaman said in a statement.

On Wednesday, the DBM Chief provided the media with the details of the 2023 UA submitted to Congress, which she said will be implemented only when government revenue collections exceed targets, or when there are additional foreign project loans.

Included in the UA list were support for infrastructure projects and social programs, inclusive of P22 billion for procurement of vaccines, amounting to P149.6 billion and the Armed Forces of the Philippines modernization program with P5 billion.

There were also standby funds for the government owned companies costing P20.6 billion, support to foreign-assisted projects with P380 billion, risk management program with P1 billion and payment of arrears of Land Transportation Office-IT service with P2 billion.

UA also included are the refund of the service development fee for the right to develop the Nampeidai property in Tokyo, Japan amounting to P210.5 million as well as the Bangko Sentral ng Pilipinas equity infusion of P10 billion.

Lastly, there are UA for public health emergency benefits and allowances for health and non-health care workers of P18.9 billion and the prior years' local government unit shares of P14 million.

“If at any given point when excess revenues are not generated, and an item of appropriations is found to be deficient or even non-existent, then unprogrammed appropriation will be triggered,” Pangadaman said.

She further explained that UA is not an unusual practice, saying it came into being more than four decades ago, and was accepted by the previous administrations.

“In the past, there were certain instances when we did not have unprogrammed appropriation. This is due to the logic that when budget is effectively increasing, there should not be an unprogrammed appropriation,” Pangandaman said.

“But in our country where we have calamities we do not expect or activities we do not even anticipate but necessitates us to provide services to our people, the UA is an available resource cover that will trigger additional amounts for the national government,” she added.

Pangandaman also said that the 2023 UA, as a percentage of the proposed national budget, is only four percent, and not 11.2 percent.

She said the P588.1 billion has included the estimated P378.2 billion for loan proceeds requirements of the Department of Transportation (DOTr).

“Hence, the DBM contends that if there is going to be an analysis on whether it exceeded the ideal percentage of UA against the national budget, it should be based on the P200 billion unprogrammed appropriation, and not with the P378.2 billion unprogrammed appropriation corresponding to loan proceeds of DOTr,” the budget chief said.

Should the DOTr’s P378.2 billion budget be removed, only approximately P200 billion, or four percent, is considered unprogrammed, which will be triggered for release only upon the generation of additional revenues, Pangandaman said.

The four percent UA appropriation level is aligned with the government’s historical average ranging between 2.0 percent and 8.4 percent from 2010 to 2022, Pangadaman said.

“In light of all these, we subject ourselves to the collective wisdom of the honorable members of Congress to scrutinize the budget and make adjustments as appropriate, as a result of the technical budget hearings and debates,” Pangandaman said.