Do we need a rocket scientist?

Ben D. Kritz

Ben D. Kritz

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?


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  1. Most citizens can just conclude it as “GOVERNMENT INEFFICIENCY”, if the problem of disbursement of funds starts from the the first point the DBM and Dept. of Finance then it affects everything down the line to all agencies. The next question I may ask, then what date would this two top government officials start to be efficient because they still need to program to spend all the government money? Or should they finish their term of office as being tagged inefficient department secretary managers of the country?

  2. I keep on saying the same things time after time, it seems every top person in the philippines is incompetent. Im sure they are the laughing stock of the world & they dont seem to notice. They are proud to be dumb & dumber. I also dont know what the answer is to this, they certainly will never have a clue what the answer is as they dont even see the problem.

  3. In real budgeting process repeatedly underspending means the organization does not need the budget being approved and it must be reduced to level the organization can efficiently implement/spend. In the administration of Pnoy the government has been underspending since day 1 but every year budget is increasing. Question where is the money going since all major projects are under PPP funded by private funds.It will not be a surprise if the money went and will go to fund 2016 campaign. Truly we are under the regime of tuwid na daan.

  4. Lets remember that Florencio “Butch Abad” is not just the DBM Secretary of PNoy but also the campaign manager of the Liberal Party. Its his political interests that get the way.

    If we want a DBM Secretary the job that is expected of him, never put a politician in this position. And in this case, we have a very crooked one.