PRESIDENT Duterte has indeed directly vetoed the “block payment” provision in the 2019 national budget intended to prohibit the government from using unprogrammed appropriations for public video surveillance and communication system.
The President also placed under conditional implementation the related safeguard provision enumerating the foreign-assisted projects which may draw from authorized appropriations for fiscal year 2019.
These provisions were included by the Senate in order to prevent the government from using the unprogrammed appropriations for the P20-billion Chinese-offered “Safe Philippines Project”, which will pilot a CCTV-based emergency response system proposed to be installed by the Duterte administration in Metro Manila and Davao.
Senate President Pro Tempore Ralph Recto has since raised concern over the “vetting and approval of the project” which allegedly lacked studies, consultations and validation. He also noted that the primary equipment contractors for the project’s Phase 1, Huawei, had been “embroiled” in controversies over national security and data protection.
However, the whole Special Provision No. 17 under the Unprogrammed Appropriations titled “Prohibitions Against the Use of Unprogrammed Appropriations” was stricken out, as seen in the copy of the 2019 General Appropriations Act uploaded in the Department of Budget web site.
The vetoed provision states that: “No amount appropriated herein shall be utilized for any project intended for public video surveillance and communication system with suppliers or service providers that are considered as serious risks to national security or interest or are involved in cases regarding information leakage, computer or network hacking, or other forms of cyber espionage, whether in the Philippines or in other countries.”
In his veto message, the President said he was constrained to directly veto the provision as “it limits the power of the President, as chief architect of foreign policy, to enter into loan agreements consistent with Section 20, Article VII of the Constitution.”
Moreover, the President also tinkered with the second safeguard provision on the list of foreign-assisted projects included by the Senate.
While the Senate deliberately excluded the Safe Philippines Project from this list of 14 projects, the President placed the whole list instead under conditional implementation.
The President said this provision shall not “limit” him in “negotiating other foreign loan agreements in consonance with Section 20, Article VII of the Constitution,” referring to the legal basis for the President to contract or guarantee foreign loans on behalf of the Philippines with prior concurrence of the Monetary Board, and subject to such limitations as may be provided by law.
Moreover, the President said the release of funds chargeable against the purpose of conversion of national government advances into subsidy for government-owned and -controlled corporations of the unprogrammed appropriations shall be subject to the submission of a Special Budget pursuant to Section 35 Book VI of EO 292 and the approved loan agreement.
“Moreover, any changes in the project, title, scope, or amount of the FAPs [foreign-assisted projects] shall further be subject to the appropriate approval in accordance with the existing guidelines,” Duterte added.
President Duterte signed the long-delayed budget on April 15, vetoing P95.3 billion worth of items of appropriations under the budget of the Department of Public Works and Highways for not being part of the list of priority projects along with 12 general and special provisions, while also placing several provisions under conditional implementation.
Recto’s warning
In January, Recto filed a resolution asking the Senate to conduct an inquiry in aid of legislation into the project, noting that a portion of the implementation cost for the project was already appropriated under the Unprogrammed Appropriations in the National Expenditure Program for fiscal year 2019.
The initial implementation phase of the project, the Recto resolution noted, was estimated by its proponents to cost P20,313,920,000, to be funded and implemented through official development assistance (ODA) from China.
The resolution added that the Chinese Embassy on July 19, 2018, transmitted a “short list” of Chinese companies recommended by the Chinese Ministry of Commerce to carry out the project, including Huawei Technologies Co. Ltd.-Huawei Technologies Phils. Inc. and China Electronics Technology Group Corp., China Machinery Engineering Corp. and China International Telecommunications Construction Corp. (CITCC).
At the same time, Recto warned that the primary equipment supplier of the winning contractor for Phase 1 of the Safe Philippines Project, Huawei Technologies Co. Ltd, “has been increasingly embroiled in issues concerning national security and data protection.”
The Recto resolution recalled that the Department of the Interior and Local Government (DILG) had already transmitted to the Department of Finance on September 20, 2018, an approved budget cost for the Safe Philippines Project to “facilitate the loan application and negotiation” for the project, after which a Notice of Award was issued on November 16, 2018, in favor of CITCC and a supply contract was signed by the DILG and CITCC on November 19, 2018.