Statement of Senator Legarda on The One Billion Cut on the 2016 Family Planning and Responsible Parenting Program

January 26, 2016

Statement of Senator Loren Legarda
Chairperson of the Senate Committee on Finance
“The One Billion Cut on the 2016 Family Planning and
Responsible Parenting Program”

This is in relation to the issue on the Department of Health (DOH) budget and to provide enlightenment on the One Billion Pesos cut imposed on the Family Health and Responsible Parenting or the FHRP program of the DOH for 2016, which includes the budget for family planning commodities.

First things first. Although the budget of the Department will show a decrease from the 2016 General Appropriations Bill (GAB) or House Bill to the 2016 General Appropriations Act (GAA), the overall allocation of the Department, including its attached corporations, will still reflect an increase compared with the 2016 National Expenditure Program (NEP) or President’s proposal, as shown in the slide.

Now even with the said One Billon Pesos cut, can one say that the allocation for contraceptives was zeroed out in the 2016 budget?

No. Anyone can go over the entire President’s proposed budget, the National Expenditure Program (NEP), with a fine-toothed comb and still no specific line item can be found that provides for the acquisition of contraceptives. Thus, there was no line item that was deleted to warrant the statement that the budget for contraceptives has been zeroed out.

Exactly how much is appropriated for FHRP? And who determines where the FHRP will be used?

The GAA will reflect that P2.275 Billion for Maintenance and other Operating Expenses is allocated for FHRP. It is the DOH that will determine where the said amount will be used, whether for drugs, vaccines, medicines, medical and dental supplies, including family planning commodities. The programming of FHRP is within the ambit of the DOH.

The cut on the FHRP was neither whimsical nor unilateral.

Included in the budget submitted by the DOH to DBM, which subsequently formed part of the President’s Budget submitted to Congress, is the allocation for FHRP, which includes P520 Million for Progestin Subdermal Implants which is the subject of the Temporary Restraining Order of the Supreme Court issued on June 17, 2015. Congress cannot fund an item that is the subject of a TRO. Also in 2015, the amount of P337.5 Million has been earmarked by DOH for the same purpose. Thus, the cut of One Billion Pesos is attributed to the P520 Million and the remaining cut of P480 Million will be partially offset by the P337.5 Million allocation in 2015 which has not been utilized and is part of the unused allotment of P1.238 Billion, as of September 2015 and is valid until end of 2016.

It follows, therefore, that the program of the DOH for the purchase of family planning commodities as submitted by the President to Congress has not been affected.

In addition, based on the June 30, 2015 report on the utilization of funds, P955 Million or 29.1% was utilized during the first semester of 2015, which means that the bulk of the procurement activities of DOH will have to be made on the second semester of 2015.

Will there be family planning commodities for distribution in 2016?

Yes. The September 2015 Statement of Appropriations, Allotment, Obligations, Disbursement and Balances submitted to DBM by DOH will show that the bulk of the P2.036 Billion obligation (which represents 62% of the released amount of P3.274 Billion) amounting to P1.081 Billion was entered during the third quarter of 2015. This means that the delivery of the commodities procured in the third quarter will most likely be delivered latter part of the year or early 2016 and will be distributed in 2016.

A report on the 2015 Status of Procurement of the Family Health Office of the DOH shows that as of January 6, 2016, procurement amounting to P621.822 Million has just been awarded, P87.125 Million is ongoing, P70 Million classified as failed bidding, and P337.5 Million as awarded but cancelled, thus, still available.

The funding sources that can be used for the requirements of the FHRP consist of the following:

a. The FHRP has a P2.275 Billion allocation in the FY 2016 GAA.

b. FHRP has only utilized P2.036 Billion or 62.19% of its allocation as of September 30, 2015. The remaining P1.238 Billion or 37.81% is still available until FY 2016.

Latest report from the Department of Budget and Management (DBM) places their unused appropriations at P828 Million as of December 2015.

c. Commodities procured in the third quarter are expected to be delivered on the last quarter or early 2016 which can be distributed in FY 2016.

d. Overall savings, which will also include the unutilized amounts under FHRP of the DOH-OSEC for FY 2015 can also be a source of fund for Family Health and Responsible Parenting. The trend of the DOH-OSEC unutilized appropriations ranges between 13% and 16% as shown in the slide. Projected savings of DOH-OSEC for 2015 is P8.8 Billion.

The September 2015 report of DOH-OSEC shows that the P29.896 Billion fund utilization is only 53.84% of the P55.526 Billion appropriations of DOH. It is 68.76% if compared with the released amount of P43.479 Billion. The unused amount from released appropriations amounts to P13.584 Billion, while the unreleased appropriations amount to P12.047 Billion or a total of P25.631 Billion has not been utilized.

At this point, allow me to address unfounded and malicious allegations that the Committee purposely concealed the subject One Billion Pesos cut in FHRP.

Was the cut of One Billion Pesos surreptitiously hidden from the Senate?

The answer is a resounding and emphatic “NO”. The whole budgetary process was done in the most transparent and inclusive manner. The traditional budgetary legislative process was followed. It was not a unilateral act on my part but that of the bicameral committee supported by technical staff.

A copy of the bicameral report has been provided to all Senators by the Bills and Index prior to ratification. The first page of the bicameral report shows the following entries for the DOH:

In addition, this cut was reflected on the DOH Special Provision on the Purchase and Allocation of Drugs, Medicines and Vaccines. The provision covers the procurement by the DOH of drugs, medicines and vaccines, including medical and dental supplies, for distribution to government health care facilities of DOH, of which family health and responsible parenting is a component.

The Bicameral Report that was submitted, as in previous Congresses, shows the summary by department or by agency. We have closely followed the traditional way of presenting the Bicameral Report dating back from 1993 to 2015 under the Chairmanship of former Senators Neptali Gonzales, Edgardo Angara, John Osmeña, Ernesto Herrera, Ernesto Maceda and Manny Villar Jr., and incumbent Senators Francis Escudero and Juan Ponce Enrile and Senate President Franklin Drilon.

Bicameral Reports were presented in the same manner that the 2016 Bicameral Report was presented. It does not include the specific line items that were amended.

To be sure, the cut of One Billion Pesos reflected in the DOH Special Provision is the same One Billion Pesos cut on FHRP. Any amendment in any program/activities/projects (P/A/P), if it has an accompanying special provision and is affected by the amendments under P/A/P, has to be amended to reflect the changes. From the NEP to GAB to GAA, the DOH Special Provision on the Purchase and Allocation of Drugs, Medicines and Vaccines contained the same wording and only the amount was changed.

Was this done only in the 2016 budget? Is this situation peculiar to the DOH budget?

The slides will show that included in the 2016 Bicameral Report are the amendments on the budget of the Department of Social Welfare and Development (DSWD) and Department of Transportation and Communications (DOTC) which were treated the same way as the amendments to the DOH budget.

The same was done in the 2012 and 2014 Bicameral Reports on the DOH budget when the amount of P224 Million and P1.122 Billion, respectively, were cut. It was implemented in the same manner as the implementation of the 2016 amendment.

All changes proposed by the bicameral conference committee were contained in the Bicameral Report that the Senate unanimously ratified as a body and thus carried in the General Appropriations Act.

We have worked hard on the 2016 national bugdet and I am proud of the work we did. For the first time, we have allocated funding worth P4.773 Billion for the payment of the total administrative disability (TAD) pension for surviving spouses of deceased World War II veterans and partial payment for TAD pension for living post-war veterans who are at least 80 years of age as of 2016. We are also funding additional support worth P1.047 Billion for health facilities and medical assistance to indigent patients; increased budget worth P1.2 Billion for social pension of indigent senior citizens; and additional funds for state universities and colleges worth P2.7 Billion, among others.

Having laid down the facts surrounding the One Billion Pesos cut on the Department of Health’s Family Health and Responsible Parenting program, I believe I have explained and presented everything on the subject in great detail and I hope this will bring a close to the issue. (END)