Billions of public funds strangely deviated

TALKS these days on corruption associated with non-governmental organizations (NGOs) could have been avoided if the Department of Budget and Management (DBM) and the Commission on Audit (COA) had not been remiss in safeguarding public funds.

In 2012 the DBM, COA and other implementing agencies (IAs) inordinately deviated from their conscientious and prudent role in handling the discretionary spending program authorized by Congress involving the controversial Disbursement Acceleration Program (DAP).

That year the Executive branch spent a whopping P21.3 billion in equity, unbelievably way above the P2.1 billion authorized by Congress. This represents an increase of P19.3 billion, or a 926-percent deviation.

Also in 2012, the branch spent P24.1 billion for subsidy, P6 billion more than the P18.2 billion authorized by Congress. This clearly represents a 32.7-percent deviation.

My researchers were not the first ones who discovered these huge deviations while gathering materials for my book, Trail of Graft and Plunder, due for publication before the year ends.

University of the Philippines (UP) economist and former Budget Secretary Benjamin E. Diokno was the first when he vetted, in particular, the 2012 General Appropriations Act (GAA).

“Strictly speaking,” Diokno said, “the GAA allows the transfer of funds [not only the Priority Development Assistance Fund, or PDAF] to civil-society organizations [CSOs], NGOs or people’s organizations [POs] as implementors of programs and projects, but under well-defined conditions.”

According to him, the GAA requires that fund transfers to CSOs shall be made only when earlier fund releases, if any, availed of by the CSOs shall have been fully liquidated pursuant to pertinent accounting and auditing rules and regulations.

Public funds are strictly covered by COA rules on budget releases and project implementation.

Under COA rules, public funds are never released directly to NGOs, CSOs or any other PO, whether they came from the unconstitutionally declared PDAF or other sources of appropriations, like the DAP.

Fund releases are only made to IAs, which could be a department, an agency or a local government unit under the Executive branch.

Funds are never released to members of the Senate and the House of Representatives.

“The choice of the NGO as the implementing service or supply contractor is the responsibility of the agency head, not the senator or [House representative], even in the case of PDAF or other off-budget public funds,” Diokno said, adding that “the contract cannot be provided to an NGO at the whim and caprice of the head of the implementing agency.”

“If the legislator insists on awarding the service/supply contract to his [or her] chosen supplier or contractor, it is the responsibility of the head of the IA to advise the legislator that it can’t be done, since it would violate some existing rules, mainly the Government Procurement Reform Act,” he said.

The ex-budget chief also said “a general provision in the GAA requires that a report on the fund releases indicating the names of CSOs shall be prepared by the agency concerned and duly audited by the COA, and shall be submitted to the Senate Committee on Finance and the House Committee on Appropriations, either in printed form or by way of electronic document.”

Diokno emphasized that it is the responsibility of the head of the IA to require no less than an audit by the COA.

The questions are: “Has the COA audited the concerned IAs? Has the agency concerned submitted the COA-audited reports to the Senate Committee on Finance and the House Committee on Appropriations?”

“What have these two powerful congressional committees done to the reports? Did they review or promptly refer them to the archives, where they might quickly fade into oblivion?” the budget expert from the UP School of Economics asked.

source:  Business Mirror / Database - Cecilio T Arillo

Country rises in ICT use ranking

THE PHILIPPINES has moved up in a World Economic Forum (WEF) ranking that measures the capacity of countries to use technology to improve economic growth and social well-being.

After staying in 86th over the past three years, the country climbed eight rungs to 78th out of 148 economies in terms of network readiness, according to the WEF’s 2014 Global Information Technology Report.

The network readiness index assesses how prepared an economy is to apply the benefits of information and communications technologies (ICTs) to increase productivity, economic growth, and the number of quality jobs.

The improvement in the Philippines standing was driven by good showings in the following subindices: environment (up one to 90th), readiness (up 38 to 81st), usage (up 15 to 76th), and impact (up 10 to 62nd).

The environment subindex evaluates the friendliness of an economy’s market and regulatory framework in supporting high ICT uptake levels.

The readiness subindex, meanwhile, looks at how prepared a society is make good use of an affordable ICT infrastructure and digital content.

The usage subindex assesses the efforts of individuals, businesses, and government to increase their capacity to use ICTs, while the impact subindex gauges the broad economic and social impact of such technologies.

“A significant improvement in the perceived efficiency in the country’s legal system and property rights protection drive the political and regulatory environment ... ICT readiness is the other area where the Philippines improves the most, thanks to a more affordable access to ICT infrastructure and better skills...,” the report said.

“Business usage is, as in many other Asian economies, at a more advanced stage than individual usage. Progress made in terms of economic impacts registered last year continues this year [and] the role of ICTs in fostering innovation by creating new products and services and organizational models is confirmed and contributes to this promising result.”

Finland topped the list for the second consecutive year, followed by Singapore, Sweden, the Netherlands, Norway, Switzerland, the United States, Hong Kong, the United Kingdom, and South Korea.

Chad ranked last.

Sought for comment, National Competitiveness Council (NCC) private sector co-chairman Guillermo M. Luz said: “I am quite optimistic that we will be in the top third by 2016 since the government last year made significant changes the way IT is procured by the government, leading to better systems in the government and more interoperability.” -- Daryll Edisonn D. Saclag

source: Businessworld

Foreign investments reach $1b

Foreign direct investments rose 5.3 percent year-on-year to $1 billion in January, as foreign companies infused more capital in their local units, the Bangko Sentral said Thursday.

“This developed as investments in debt instruments and equity capital registered higher net inflows during the month despite the observed reversal in foreign portfolio investments,” the Bangko Sentral said.

FDIs refer to long-term investments that are infused in companies in the country while foreign portfolio investments are funds that are temporarily parked in stocks, government securities and currency market.

The January figure reversed the 7.9-percent decline recorded in the same period last year when net inflows of FDIs fell to $976 million from $1.059 billion in January 2012.

“In particular, non-residents’ net placements in debt instruments issued by their local affiliates increased by 7.3 percent to $687 million, accounting for about 67 percent of the FDI in January 2014,” the Bangko Sentral said.

“This was due to the continued lending of parent companies abroad to their local affiliates to fund existing operations and the expansion of their business in the country, an indication of sustained confidence in the country’s strong macroeconomic fundamentals,” the bank regulator said.

Data showed net equity capital inflows increased 10.5 percent to $278 million in January from $252 million a year ago. Gross placements of equity capital reached $361 million, while withdrawals amounted to $83 million during the month.

The bulk of gross equity capital placements came from Hong Kong, the United States, Japan, Singapore and the United Kingdom.

These funds were channeled mainly to financial and insurance; wholesale and retail trade; real estate; manufacturing, and information and communication activities.

Meanwhile, reinvestment of earnings reached $62 million in January 2014, down from $84 million a year ago.

Net inflows of FDIs increased 20 percent to a record $3.86 billion in 2013 from $3.215 billion in 2012, driven by investors’ rising confidence on the country’s sound macroeconomic fundamentals.

The Bangko Sentral projected net inflows of FDIs to reach $2.6 billion this year.

Bangko Sentral Governor Amando Tetangco Jr. earlier said despite the tapering of the US monetary stimulus this year, investors would still look at the fundamentals and prospects of individual countries.

Data from the International Monetary Fund showed FDI inflows in the Philippines from 2000 to 2011 reached $25.59 billion, lower than $114.56 billion of Malaysia, $146 billion of Thailand, $186 billion of Indonesia and $617 billion of Singapore.

source:  Manila Standard Today

Gov’t loses P144 B in 2011 due to tax perks in ecozones

By Zinnia B. Dela Peña (The Philippine Star) | Updated March 27, 2014 - 12:00am

MANILA, Philippines - The government lost at least P144 billion from the income tax holidays enjoyed by domestic and foreign firms in free ports or economic zones in 2011, the Department of Finance said.

The amount accounted for 1.5 percent of gross domestic product (GDP), 9.3 percent of government’s total expenditures and 10.6 percent of state revenues in 2011.

These figures, the Finance Department said, were conservative as the Tax Expenditure Report covered only 29 percent of all investment promotion agency – registered firms.
“With the current tax incentives system that has been largely unaccounted and uncoordinated, the government loses billions of pesos in revenues every year which could have helped improve our fiscal position,” Finance Secretary Cesar Purisima said as he urged lawmakers to speed up the approval of key economic reforms particularly the fiscal incentives rationalization bill that has been pending for more than 15 years.

The bill, which has been certified a priority measure by the Aquino administration, aims to establish a transparent and accountable system for the grant of incentives.

It seeks to remove various incentives granted to businesses that are deemed either excessive or no longer necessary as the government aims to achieve sustainable inclusive growth.

 

Internal Revenue commissioner Kim Henares earlier said the government would generate as much as P19 billion in additional revenues with the rationalization of tax breaks.

Purisima is also pushing for the immediate passage of the Tax Incentives Management and Transparency Act (TIMTA) and the Fiscal Incentives Rationalization Reform (FIR) bill.

The TIMTA will give the government the necessary tools to account for the magnitude of government support given to a certain sector and the appropriateness of using tax incentives in achieving socioeconomic goals while the FIR coordinates and organizes the grant of incentives to different sectors that has been largely unfettered over the last few years.

“Tax incentives distort the tax structure of the Philippine economy. Through these twin fiscal incentives reform measures, in the long term the government will enhance the country’s fiscal capacity to continue to build on its macroeconomic fundamentals, level the playing field and improve competitiveness and investment opportunities. Accounting for tax incentives needs to be transparent, and these tax incentives need to be granted properly,” Purisima said.

Visually impaired Pinoys to hit over 2 M this year – study

By Sheila Crisostomo (The Philippine Star) | Updated March 26, 2014 - 12:00am

 

MANILA, Philippines - More than two million Filipinos are projected to develop visual impairment this year due to various reasons, ranging from chronic illnesses to aging, an expert from the Philippine Academy of Opthalmology (PAO) said yesterday.

In a press briefing, PAO member Carlos Emmanuel Chua noted that based on research of the Sentro Oftalmologico Jose Rizal of the Philippine General Hospital in 2012 and 2013, around 2.4 million individuals will be visually impaired this year.

Of this figure, 312,000 individuals will go blind due to cataract, refractive error, glaucoma and diabetes.

Chua also noted that the top causes of visual impairment include error of refraction, cataract, glaucoma, retinopathy and maculopathies, particularly diabetes and hypertension.

“Poorly controlled diabetes mellitus is estimated to blind 40,419 individuals in 2014 and cause visual impairment in around 151,570 individuals,” said Chua, an adult and pediatric ophthalmologist at the St. Luke’s Medical Center (SLMC).

According to Pearl Tamesis-Villalon, former PAO president and SLMC Quezon City-Retina Section head, it is important to manage diabetes to prevent the development of diabetic retinopathy.

 

“It is one of the many complications of diabetes. It primarily affects retinal microvasculature, destroying its walls (causing) fluid leakage and accumulation in retinal tissue causing edema,” Villalon explained.

She also noted that the Philippines has the ninth largest diabetic population in the world, affecting some 7.8 million Filipinos by 2030.

Age-related macular degeneration (AMD) is the leading cause of permanent visual impairment or severe vision loss in people above 50 in western countries, she added.

Age is the most important risk factor, followed by modifiable risk factors like lack of antioxidant, smoking, excessive ultra violet exposure and systemic conditions such as high cholesterol and obesity.
Prevalence is higher among Europeans at 12.3 percent against Asians at 7.4 percent.

“But numbers are expected to rise sharply in Asia as the region comprises 60 percent of the world population,” Villalon added.

To enhance diagnosis and treatment of blindness-causing eye diseases, the Eye Institute of SLMC inked yesterday a memorandum of agreement with Novartis Healthcare Philippines.

Under the agreement, Novartis will provide free Optical Coherence Tomography (OCT) to 360 qualified patients of SLMC Eye Institute in Quezon City and Global City from Jan. 1 to Dec. 31 this year.

To qualify, a patient should be currently on the Novartis medication Ranibizumab, which is indicated for the treatment of neovascular or wet AMD, a visual impairment due to diabetic macular edema and macular edema secondary to retinal vein occlusion.

According to SLMC-Global City Eye Institute head Noel Chua, “OCT is a non-invasive imaging test that uses light waves to take cross-section pictures of your retina, the light-sensitive tissue lining the back of the eye.”

 “It enables the ophthalmologist to map and measure the thickness of each of the retina’s distinctive layers. These measurements help with the early detection, diagnosis and treatment guidance for retinal conditions and diseases,” Chua added.

553,706 college students to graduate

By Helen Flores (The Philippine Star) | Updated March 26, 2014 - 12:00am

 

MANILA, Philippines - Over half a million graduates will be added to the labor force this year, the Commission on Higher Education (CHED) reported yesterday.

Data from CHED show that 553,706 college students will graduate this school year.
Topping the list are graduates of Business Administration and related courses (142,061), followed by Medical and Allied disciplines (110,280), Information Technology (68,178), Education and Teacher Training (65,092), Engineering and Technology (61,786) and other disciplines (26,298).

A total of 18,725 are graduates of Maritime followed by Social and Behavioral Science (13,144); Agriculture, Forestry, Fisheries and Veterinary Medicine (9,109); Service Trades (8,283); Mass Communication and Documentation (6,153); Humanities (5,362); Natural Science (4,171); and Law and Jurisprudence (2,870).

Graduates of Architectural and Town Planning number 2,268 followed by Mathematics majors (2,094), general courses (1,863), Religion and Theology (1,280) and Trade, Craft and Industrial (403).

‘Entrepreneurship solution to joblessness’

 

Following reports on joblessness, Sen. Paolo Benigno Aquino IV said yesterday that youth entrepreneurship is the key to addressing unemployment for the 15- to 24-year-old segment, the number of whom continues to rise annually.

The Senate is in the process of studying several bills on youth entrepreneurship to help address the problem of unemployed youth.

But “with the slow pace of the country’s legislative mill, it will take months or years before these measures are enacted into law. That’s why the government needs to take the initiative and start these programs right away,” Aquino said.

Aquino believes that the government’s push for inclusive growth will not take off unless the problems of youth unemployment and underemployment are immediately addressed.– With Marvin Sy

Gov’t launches health program for 14.7 M poor families

By Delon Porcalla (The Philippine Star) | Updated March 25, 2014 - 12:00am

MANILA, Philippines - The government launched yesterday a comprehensive health program aimed at providing primary healthcare to 14.7 million indigent families.

President Aquino, along with officials of the Philippine Health Insurance Corp. (PhilHealth) and the Department of Health (DOH), led the launching of a multi-sectoral advocacy campaign dubbed “Alaga ka para sa Maayos na Buhay” (Alaga Ka) at the Quezon City Memorial Circle.

In his speech, Aquino invited the attendees – some 2,000 poor families from different parts of Metro Manila – to partake of and utilize the benefits offered by Alaga Ka.

“It is the primary objective of the Alaga Ka program to open the eyes of our fellowmen, especially the 14.7 million indigent families, about the services being offered by our very own DOH and PhilHealth,” Aquino said.

The beneficiaries will receive micronutrient supplements, maternal and neonatal care package and family planning.

They will also get free treatment package for tuberculosis from government hospitals.

 

“The services here are crystal clear: We firmly believe that prevention is better than cure. Instead of being content with curing the illness, we are giving Filipinos the capacity to prevent illnesses and stop it from spreading further,” Aquino said.

The President was joined by Health Secretary Enrique Ona, PhilHealth president and CEO Alexander Padilla, Education Secretary Armin Luistro and Quezon City Mayor Herbert Bautista.

Aquino said PhilHealth and other government agencies providing health services have been able to keep up with the demand for universal health care because of proper management of the government’s resources.

“Among the benefits that are included in this service are health-risk counseling and cancer screening, and the assurance that beneficiary-families will be able to consult and see a doctor every year,” he said.
He added that even the legislative branch pitched in and helped by passing the Sin Tax Reform and Responsible Parenthood laws that greatly helped in providing better and more expanded health services to the people.