Budget system breakdown

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JOSE V. ROMERO

JOSE V. ROMERO

Some people are convicted by what they say; Janet is going to be convicted by what she did not say. As far as the bar of public opinion is concerned, her demeanor at the Senate hearing—her evasiveness, the lack of candor in the face of probing questions from the senators, will be her Waterloo. With every denial in the face of compelling evidence in the hands of some of the interrogators in the Senate, such as her letters during the fertilizer scam, admitting to the use of PDAF, and the evidence presented by the team of whistleblowers—she dug deeper into her grave.

Listening to Senator Miriam and her characteristically feisty one hour cross examination of the witness Napoles, we are now morally convinced that if Janet is the most guilty of the scam, so are the senators and congressmen and line agency officials etc. Indeed she will be in good company. It would be next to impossible for JNL Corp. to have pulled the scam within the briar patch of Philippine bureaucracy without the tacit approval, nay, the active cooperation of employees working under the tutelage of the legislators and their staff. Yes indeed, it must have been a conspiracy of the grandest proportion with the highest officials of government, its line agencies and their accountants and auditors.

This brings us to the issue of the seemingly highly flawed budgetary process. Obviously there is a systems breakdown and a lot of moral hazard that has led to the corruption and dissipation of funds. This is unfortunate since there is such a great urgency to build infrastructure and social overhead projects if this nation were to achieve the level of growth that will allow it to bring down the level of poverty—the worst in this part of the world.

La Miriam talked about the need for constitutional changes while former Chief Justice Puno is leading the charge for a referendum on the issue of pork. We wonder however whether this will suffice. As we have underscored in previous columns, there is a need to restructure the whole apparatus of government which resembles an ill-designed quilt.


There is a need to address the issue of local government autonomy embedded in the constitution. Government decentralization will make governance more transparent and closer to the people, while curing the current dilemma. The present system has produced the fiscal authoritarianism which is a step closer to a dictatorship. The penchant for the tenants of Malacañang even as far back as Commonwealth days to hug the purse – the source of political grace has never been checked. So is the tendency of Congress in intervening in a strictly executive function of development implementation. Actually these are par for the course except that in the case of the executive, the distribution of development funds is short of participatory. When you see the long line of local executives cooling their heels in the palace, congress, or the budget office with their begging bowls, this opens the gate to at the very least political cooptation and at worst hating kapatid or cashsunduan.

Obviously a way out of this budgetary Gordian knot is to reorient and redirect the distribution of developmental funds in favor of rural areas and to make the leadership in the rural areas not only accountable for, but become the principal determinants, of development priorities in their areas and their direct beneficiaries. This is the way to inclusive growth and would give teeth to the vision of participatory planning and program implementation. This by no means prevents the national government from designing and implementing national projects such as railway systems that cut across the archipelago or other major infrastructure projects that cut across provincial boundaries.

This is not a suggestion to hamstring the central government and introduce fiscal inflexibility into the process. Obviously the realignment of projects by the central government when real savings occur is possible with the concurrence of congress. What is not allowed is the unilateral use of savings, income coming from government owned or controlled corporations and off-budget incomes to be lumped under the office of the president and spent at the sole discretion of the palace .This is tantamount to fiscal dictatorship.

The long and short of this intervention is a plea for greater transparency in the handling of national budget by going along with the constitutional provisions regarding savings, the transfer of which outside the agency needs congressional approval; avoiding lump sum appropriations and restoring line item budgeting; giving local government units (not Congress!) the task of project identification, except for national projects; placing off-budget income coming from government owned and controlled corporations in the national treasury; subject to the same appropriations scrutiny as the rest of government expenditures. These include Pagcor, Sweepstakes, Malampaya, PCGG etc.); give life to authentic local autonomy by giving more fiscal independence to local government units who today only share in their real estate tax collections and other city/municipal tax ordinances.

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2 Comments

  1. Mr. JR ur comments this morning are almost perfect. May I comment that the present system of releases which is controlled legally daw (supported by the corrupt SC decision) by DBM is abuse waiting to happen since its inception. And sadly the abuse happened as you said during Qiezon’s time pa and the abuse progressed to present humongous proportion with the DAP. Even current CoA’s system of imbeded auditors in Departments and GOCCs which is good in theory is not good in practice as said imbeded auditors are corrupted by the very agencies they are auditing. The COA auditors at Bangko Sentral are receiving daw the same bonuses its officers (BSP) are receiving. What about other GOCCs like MWSS, GSIS, SSS etc.? .

  2. there is no need to cross examine or ask Napoles to confess and name the suspects, there were already gigantic evidence which is the paper trail dugged by the media against her, the same is true to the others like Enrile, Revilla, Estrada, and drillon. evidence could be just as simple as comparing their salaries to the assets and businesses they own before and after. One do not need to be an FBI agent to find out. It is also not difficult to confiscate all their stolen assets and cash. I hope this will not be another whitewash or palabas investigation. these crooks need to be punished no matter how old Enrile is or if he die or get a stroke as a result of this then all his stolen wealth should be taken. Remember Enrile is now a billionaire and owns dozens of businesses nationwide and maybe abroad.