IN other countries, terms like “Department of Budget and Management” and “Budget Secretary” are generally assumed to mean “a government agency and/or official responsible for managing the spending of government funds according to the provisions of the national budget.”
What those terms mean in the Philippines, however, is anyone’s guess, since spending is a concept that the Aquino Administration’s bean-counters, led by Finance Secretary Cesar Purisima and Budget Secretary Butch Abad, are apparently unable to comprehend.
On Thursday, the Department of Finance released budget data for the month of April, which revealed that the government had once again racked up a huge surplus due to underspending, this time to the tune of P52.6 billion. Believe it or not, that was an improvement over the year before; while government revenues were lower by about 6.7 percent, government spending increased by about 7.5 percent, or about P11 billion in April.
As they do when this sort of unattractive data is released—by now, theirs is a well-practiced routine—Secretaries Purisima and Abad delivered the standard one-two response, Purisima explaining away the numbers with accounting technicalities, and Abad complaining about how adverse rulings against the PDAF and DAP have retarded spending processes.
The reaction of one of my favorite analysts, BPI associate economist Nicholas Mapa, was priceless. “This administration has been crowing about pump-priming [the economy]ever since 2012 and we’ve been disappointed at every turn,” Mapa said. “Their inability to spend the funds extracted from the public is truly confounding, as funds squeezed out from the public have not been spent in projects that have improved the quality of life nor increased efficiency in the medium term.”
And who could blame Mapa or anyone else for feeling frustrated, when the response to near-constant criticism about government underspending is either silence or a counterproductive alternative idea? The latter is exemplified by the result of the fallout from April’s budget numbers—Abad’s announcement that government agencies would now be required to form permanent “delivery units” to ensure that disbursements are accelerated.
In other words, Abad’s solution to underspending, which analysts almost unanimously blame on unwieldy and inefficient bureaucracy, is to add another layer of administrative intervention, one that is superfluous in more than one way. One would think the basic insult to logic of that idea, as well as the long past worn-out excuse about the ‘chilling effect’ of the court rulings against free-for-all spending schemes would be rather obvious, but that is apparently not the case.
To begin with, the very point of the existence of the “Department of Budget and Management” is to serve as the government’s “delivery unit,” making sure the right amount of money is delivered to the right places and spent on the right things. Creating new “delivery units” within each agency is simply duplication of effort.
That administrative step was made necessary, Abad has said, by the adverse rulings against the PDAF and DAP. But the Supreme Court ruling that most of the key parts of the so-called “disbursement acceleration program” were unconstitutional didn’t establish a new law, it simply pointed out that management of the budget by the Executive branch of the government must be conducted in accordance with existing laws. Restoring the processes to their former state should not require the creation of a new institutional layer.
The fact that government spending, in fact, did improve by a modest but still significant amount in April in the absence of Abad’s latest clever idea should also tell him something; whatever the administration is already doing is working, and if anything, perhaps, they should be just doing more of it.
If you have a process with four steps and you add one more, the process will take longer, which is basically the opposite of what “accelerating” expenditures means. It’s not rocket science. Or is it?