UNEDITED

Part 2-july 28, 2010

Q: Sir, sinasabi ninyo na walang anumang ---kung nbagkaroon man ng over

spending sa budget. Pero may sinite din si president na isang may isang distrito lang, kasama
iyon sa justified na releases noong funds.

RELAMPAGOS: Noong sinabi ko kasi walang anomalous, meaning all the releases made by
DBM were within the authorization made by Congress of P1.54 trillion we didn’t…that. So,
there is no legal problems on all the releases that were made, so far.

Q: Saan magpo-fall, kung napunta lahat sa particular district na ito sa

Pampanga, kaninong responsibilidad, hindi kaya nag-exceed on what was authorized by
Congress. Whose are fault?

RELAMPAGOS: Ang DBM kasi mag-release lang kung may request nanggagaling sa
ahensiya. So, may request iyon, whatever province or locality, the project is located, we make
that release based on the request of the agency. If it happens if went to certain locality and that’s
it. Now, whether the purpose I think,…wanted to know if the release there a stated in the
purpose based on the request was indeed appropriate at that time ands was justified to be
released in that locality.

Q: Sir, clarification din lang, in the past ba, sir. May mga pagkakataon ba na
before the end of the year lumampas tayo sa target na spending, halimbawa July pa lang ngayon,
tapos P1 billion na lang, nangyari na ba iyon in the past?

RELAMPAGOS: not the total budget, because kung sabihin mong lumabas as a totals
budget na authorized by Congress.

Q: Like halimbawa last year. Did it happened?

RELAMPAGOS: AS the program, you mean the program, because the budget is
programmed for a certain period, like quarterly ba or what you call semestrally or whatever.
Now, it depends on the program that year, I could not recall right now the specific numbers
indeed we exceeded program, actual expenditures against program expenditures. The more
important thing there is whether it was justified given the fiscal situation at that time. You have
calibrate your releases against the fiscal situation. I mean, if you think revenues are not
forthcoming, we cannot support the allotment that you issued, then you should issue faster
spending authorization that the inflow of revenues.

Q: So, iyong nangyari ngayon, can you say iyong initial assessment justified
iyong release?

RELAMPAGOS: As I said, there is a P51 billion excess in our deficit target.

LACIERDA: Let me clarify,. I think you are referring to the calamity that was
apportioned to Pampanga, it’s a question of propriety as mentioned by Secretary Butch Abad
yesterday in the order of provinces affected by typhoon Ondoy. Pampanga was the fifth hit,
Pangasinan and Rizal were more severely hits and despite of that, they were only given a few
portion of the calamity funds. For instance in Pangasinan, only P5 million was given, in
districts 1 and 2 of Pampanga, which was not severely hit by typhoon Ondoy, they were given
P108 million. It’s a question of propriety at that time. Take note also that the release of the
calamity fund was done 7 months after more or less and coincidently during the election
season. That is were Secretary Abad is saying about the propriety of releasing the calamity
fund of the two districts in Pampanga.

Q: Sir, iyon bang address ng Pangulong Aquino, iyon basis niya ay glaign sa
inyo sa DBM? When he said na halos nilimas na po iyong budget. I am justr wondering na kung
sinasabi ninyo ngayon na there is no actually anomalous over this expenditures, pero ang basa
kasi ng taumbayan ay parang heinous crime na iyong pagkakagastos ng unang ----

RELAMPAGOS: Legally, everything releases at within the budget, there is no illegal on the
releases. But, as I have said, if prudence dictates that you have calibrate your releases against
revenue sources, then, the outcome as of June 30 is that we exceed the deficit target by P51
billion. And that is because as I said, shortfall in revenue by 23, yet the spending exceeded by 27.

Q: Sir, in President Aquino SONA, he also mentioned the an attempt to

release P3.5 billion. I think 5 days before the end of former Arroyo’s term. Wala rin pong illegal
about that, five days before?

RELAMPAGOS: Well, as I said, when we released the P3.5 billion, it was also based on the
authority given by the Congress. There was a loan proceeds from Japan at that time for that
specific purpose for the calamity cause by Ondoy and Pepeng. So, when it came to us, there
was a certification that the loan proceeds have already come in. Then, DPWH requested for
that, then we released that P3.5 billion SARO.

Q: Sir, na-release siya. I thought napigilan po ni Secretary Singson.

RELAMPAGOS: Yes, at his level, at our level we have released it, DPWH received it, it is
now on the judgment of Secretary Singson to hold it or implement it.

Q; Sir, since matagal na po kayo sa DBM, may nakikita po ba kayong

unusual doon sa releases na ignawa ng Arroyo administration noong pagsasara ng termino ni
President Arroyo?

RELAMPAGOS: You see this again, the outcomes of the decisions made, because again,
there is a P51 billion excess.

Q: Iyon pong malaking speding na tinutukoy niyo, do you see that as

unusual?
RELAMPAGOS: Relative to the fiscal program, it may not be prudent at that time that we
accelerated spending when revenues were not forthcoming as program. So, it could been more
prudent, so we can control the deficit within the target deficit for htat period.

Q: Sir, like for example po noong time ng election, there were reports that
there was unusually high number of request for assistance to the LGUs and we heard that there
were releases made during election and there was a suspicion na baka daw nagagamit sa
patronage politics?

RELAMPAGOS: There is very high request from LGU’s, there were releases for LGU’s but
as to the proportioned of the total release, I don’t have the data now, But there we releases to
LGU’s.

Q: sir, clarification, you said earlier that there is nothing wrong with the
releases made by the previous administration, but you are questioning is the pattern of the
spending?

RELAMPAGOS: Legally there is nothing wrong. It is within the authorization given by

Congress, but in terms of fiscal situation at that time, it could have been more prudent of the
releases were calibrated against revenue inflows. So, the target deficit for that period will not
be exceeded by P51 billion.

Q: So, you are questioning the quality of spending.

RELAMPAGOS: No, when you say quality, its the nature of the projects that you are
funding. It was timing during that time when revenues were going slow, shortfall of P23 billion,
but spending went beyond P27 billion against program.

Q: Sir, since you have said that there is nothing wrong or anomalous sa mga
fund releases for the past administration. You think its quite unfair for the former president to be
dragged doon sa latest SONA of President Aquino considering na wala pa ring anomalya na
nai-establish on those fund releases.

RELAMPAGOS: We are not talking of legal issues here. I am not talking of legal issues
here. I am not referring to those legal issues here, I am not referring to those legal issues it
was just the fiscal situation at that time.

Q: Secretary Lacierda, do you think, it’s a little bit unfair for the former
president be dragged on this, particularly doon sa latest SONA na, now you arte saying na wala
palang …sa question of propriety?

LACIERDA: Its the question on how they manage, they manage country, the financial
situation. They are saying that they are good fiscal managers, but when it turns out, you’ve got a
severe shortfall on collections, you got spending and in spite of that, that is the reason why we
incur so much deficit. It is really fiscal irresponsible for them to do that, we’ve got deficit
and they were saying it is manageable. But the fact is, if you fiscally prudent in managing
the economy, we would have a lesser budget deficit. Because of that, they were, apart from their
fiscal mismanagement, you have also issued on governance. This two province presented
themselves and does we have very few foreign direct investments, were not able to pursue our
pursue our economic services, for instance, if you look at the region, we have the highest
electricity rates and then our social services were also severely hampered, you see also, a lot of
high school drop outs. So, all of these things apart from fiscal mismanagement and bad
governance, you have the situation wherein you’ve got like Undersecretary Relampagos was
saying, you got the P51 billion excesses. And you can’t say that they were responsible, even if
it was manageable, it was irresponsible for them to do that. We do not say puwede na. We …
better and of they were responsible enough, they would not have spent as much as they should
have. The other issue also the question again, and propriety is not something that we should be
emphasized. As we have stated, calamity funds are very, very important for area severely
affected were not used for the proper, were not allocated for the proper areas. You saw Rizal
and Pangasinan severely affected, they got 1.5 million population each and yet, district 1 and 2
of Pampanga which were not also severely affected that profited from the calamity fund. In
Pampanga, if you would like allocate resources, district 3 and 4 should have gotten most of the
resources, most of the calamity fund.

You tell me, Rose if it is not irresponsible, if its not ethical and I think, we
are raising the bar of governance here. Kung saan maayos ang pag-asikaso sa ekonomiya, sa
paggamit ng calamity fund, siguro hindi abbot sa ganitong sitwasyon ngayon.

Q: Are you supportive of goals for the former president to break her silence
now and publicly hear her side on this allegation?

LACIERDA: She has never spoken even during her administration, she has been very,
very cautious. I don’t know if she will break from the mold that she had started from the
beginning, after she refuses to speak to the media. As she always let her spokespersons do their
job. So, I am no opposition to dictate on her what she wants to do. WE presented our case, we
presented the budget, we presented the numbers. This is the amount that were left with and in
spite of that we are doing the solutions that we are proposing and we are going to do it to the
best probabilities doable as they are, along with PPP, the Public Private Partnership that we
are intending to do under this administration. And also, we are doing zero based budgeting, that
is important for us right now., We take way programs which are not workable, we take away
programs which really essentially waste of resources and …I doubt if they did zero based
budgeting we also not incurring so much deficit.

Q: Usec Relampagos you said that the Arroyo administration has not been
prudent in its spending for that first half of the year. Would you say that Arroyo
administration also lack prudence in its spending in the previous years that it wasn’t election
year.

RELAMPAGOS: For this semester, I am sure of the figures that we have exceeded the
fiscal target for the first semester. If you look at previous years, there were also years that
again, we overshot our targets in terms if deficit targets. So, again, let her decisions should have
been made, let her collection had also been made to support the priorities laid out by the budget
that was approved also by the Congress.

Q: Usec Relampagos, clarification lang po, because in the previous years

and in the first months of the administration of former Arroyo in 2010, they were
overspending because of the stimulus package, because of the global financial that we
experienced in 2009. So, was these releases made because of the stimulus packages intended by
the administration.

RELAMPAGOS; If you look at them when we had the economic managers briefing, we
said, we cannot sustain the ….spending of 2010. We believed that there were already enough
spending and it was no longer sustainable to continue another year of spending because of out
outlook on the revenues. So, you can only continue similar spending if you have the appropriate
revenues. But, it would not be proper if you fund this out borrowings, because there are limits
to borrowings.

Q; Sir, former Pampanga Governor Ed Panlilio was interviewed on

television this morning and he confirmed na iyong P105 million calamity fund that was released
by the DBM to the province of Pampanga, but he said that the amount is parang standby fund pa
lang, so hindi pa expended pa,. so puwede po ba iyong nangyari sa DPWH na na na-discover ni
Secretary Singson na put on hold noong paggamit ng fund?

RELAMPAGOS: If you are telling me that the funds that were released are still unconvert,
still free and available and that Agency responsible for that will recommend to stop its
implementation, that is within the discretion of the head of agency. And if you will ask DBM
to issue allotment to withdraw that ,we will comply to that request of that department head.

Q: Sino ang puwedeng mag-request noon, pra masabi natin na hindi naman
sa isang province napunta iyong bulk ng calamity?

RELAMPAGOS: If the SARO was released on certain department like the DPWH, it is the
head of the agency that will request, make a decision to stop implementing that SARO and
recommend to DBM to withdraw that SARO.

Q; So, sir puwedeng iyong alleged impropriety na na-commit noong previous

administration puwede pang ma-correct?

RELAMPAGOS: If the allotment are still free, available and accountant of that agency will
certify that these funds are still free.