Treasury, DBM object to proposed developmental fund for CAAP

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Metro Manila (CNN Philippines, May 18) — The Civil Aviation Authority of the Philippines (CAAP) has expressed support for a bill in the House of Representatives seeking to give the agency a developmental fund.

But Dominick Mariano, a central office director of the Bureau of the Treasury, told the House committee on transportation on Thursday that the fund would defeat the purpose of the government's "one-fund concept."

"Although we support the intent of the bill, noting the critical role that the CAAP plays in our aviation sector, we do note that the setup of the development fund will run contrary or will not be in harmony with our cash management practices, particularly the one-fund concept," Mariano said.

"Since this will set up a separate fund outside of the Treasury, it will minimize or at least carve out from our ability to fund the priority programs of the government as approved by Congress," he added.

House Bill 5002, filed by Rep. Michael Romero, seeks to provide a developmental fund to CAAP to "foster upgrades in regards to its standards, system, and procedures prescribed for civil aviation practices and for other purposes."

Initially, the bill seeks a ₱5-billion fund that will be "chargeable against funds recommended by the DBM," and thereafter, "appropriations for the CAAP shall be included in the budget proposals under the Department of Transportation (DOTr)."

It will then be included in the General Appropriations Act for continued implementation.

The bill also states that the developmental fund will be administered by the Transportation secretary.

CAAP Director General Capt. Manuel Tamayo said the proposal was "laudable."

"With a sharp decrease in passenger demand due to fear of COVID-19 and imposition of air travel restrictions, the civil aviation industry took the brunt of the pandemic. It admittedly became harder for us to focus on our developmental programs," Tamayo said.

"Thus, it would be highly beneficial for CAAP to receive additional funding for our modernization efforts," he added.

Speaking to the House panel, the DBM agreed with Mariano's comment and also said that the CAAP, an attached agency of the DOTr, has no current programs or activities under the department.

"In this regard, we defer to the DOTr as to the provision for the inclusion in their budget proposal of the developmental fund of CAAP," the DBM said.

According to a document published by the DBM on its website, the policy requires that all government income and revenues must "accrue to the General Fund" to finance priority programs.

"The one-fund concept is significant in that it serves as an avenue through which fiscal authorities may properly allocate scarce government resources in accordance with the priorities in the over-all program of economic development," the DBM said.

The agency also said that the fiscal policy provides the government with a mechanism to "control drawdowns on pooled resources."

"Regularly, the level of funds disbursed are monitored against the level of revenues generated. This way, we are able to stick to the targeted level of disbursement for a given period," the DBM explained.

CAAP has faced two incidents of air traffic troubles this year — first on New Year's Day and second on the long Labor Day weekend.

It already said in January that the country’s air traffic system needs an upgrade, with Tamayo earlier admitting that the technology behind the Communications, Navigation, and Surveillance Systems for Air Traffic Management (CNS/ATM) of the country’s Air Traffic Management Center is already outdated.

READ: CAAP: PH air traffic system not outdated, but needs constant upgrading

Both houses of Congress are also seeking to limit the functions of CAAP to airport regulation, instead of being both regulator and operator.

READ: Senate adopts report limiting CAAP's functions