ERC seeks restoration of slashed proposed 2022 budget

The Energy Regulatory Commission (ERC) is appealing to the House of Representatives to restore several items in its proposed budget for 2022 that were slashed by the Department of Budget and Management (DBM).

During the House Committee on Appropriations’ deliberations on the proposed budgets of the ERC and the Department of Energy (DOE) on Thursday, ERC chairman Agnes Devanadera revealed that its proposed budget of P987.458 million was slashed by the DBM by 41%.

Devanadera noted that the ERC’s proposed budget for next year was already lower than its 2021 approved budget of P1.006 billion.

But the DBM reduced the ERC’s proposed 2022 budget submitted to Congress to P586.516 million.

“We are seeking reconsideration for the budget that was not approved by the DBM because this are very, very important to us and without this additional budget we will not be able to sustain the traveling expenses which are needed in the conduct of public hearings, in the conduct of regulatory visits, in the conduct of inspection and meter testing,” Devanadera said.

In particular, the ERC chair is appealing for the restoration of about P314.128 million for the agency’s maintenance and other operating expenses (MOOE), which include traveling expenses, communication expenses, and repair and maintenance of machineries and equipment.

Devanadera emphasized the need for enough funds for the maintenance of its communication expenses as “work-from-home setup is something that will be part of the new normal.”

The ERC is also seeking for the restoration of around P68.685 million in capital outlays, which include expenses for the procurement of ICT equipment, office equipment, and transportation equipment.

In response, DBM director Cristina Clasara said the budget department took into consideration the ERC's financial performance in its evaluation of the commission's proposed budget.

The DBM official explained that the ERC has low utilization of its past years’ budgets.

“For 2019, out of the allotment that we issued to ERC, only 71% was obligated. For 2019, the obligation rate is just 69%. As of June 30, 2021, the obligation rate is only 28% and the highest is for personal services,” Clasara said.

Devanadera explained that the ERC was not able to have a high utilization rate because the budget was approved only in April 2019.

“Before we could even initiate or proceed with the procurement, we did not have that time anymore,” the ERC chair said.

“For 2020, we were not given very much by Congress and thank you for that. However, a very substantial amount is classified as congressional initiative (CI). We all know there is a DBM circular saying that because of the pandemic we cannot use CI. We needed to ask permission from the Office of the President for the utilization of CI. But we all know that these things, I suppose, were used for the pandemic as supported by DBM circular. For 2020, the total utilization rate is 76.77%,” Devanadera said.

Meanwhile, as of August 2021, the ERC has a utilization rate of 40.10%, according to the ERC chairman.

House Appropriations panel vice chairperson Manuel Jose Dalipe asked if the ERC can assure it can utilize its original proposed budget.

Devanadera said, “I am happy to say that the absorptive capacity of the ERC has substantially increased. With the Bids and Awards Committee (BAC) split into two, we are likewise grateful to the DBM for our request for a plantilla position for the BAC. It’s really a case of having the right people in the BAC. We see no reason why we cannot improve our absorptive capacity.”

Clasara, on the other hand, said the DBM will defer to the Congress on restoring the ERC's budget.

“The power of the purse lies with the Congress. Should changes be affected by the Congress, we will honor the changes,” the DBM official said.

Dalipe said the committee can help the ERC restore its original proposed budget. — BM, GMA News