• Prioritizing the government’s budget – Let’s try to get it right

    Mike Wootton

    Mike Wootton

    I’m very pleased to see that the Pope on his forthcoming visit to the Philippines and Leyte, specifically, does not want to meet and be entertained by politicians and the wealthy. He wants to dine and talk to poor people, the victims of Yolanda. And that, in my opinion, is exactly what he should be doing, but I’ll bet it will take a huge effort to keep the politicians and the rich people out of it.

    The whole Yolanda debacle is fading from the public’s minds now. After all, it was about eight months ago, but the political capitalization that was attempted around the disaster was shameful. Only recently has a plan, notable for its number of words and volumes and cost, been developed to rehabilitate the areas destroyed. People are still living under tarpaulins and the dead have not yet been fully accounted for. Yet another indication of the dearth of real societal focus, which is endemic to the Philippines.

    There is apparently a law, Republic Act (RA) 8344, which mandates that people who are seriously ill should be given medical attention in hospitals without the need for any pre-payment. There was a case in Bohol recently in which a seriously ill 10-year old girl was refused admission to a private hospital because the parents could not pay the P30,000 deposit demanded; the child received no medical attention and died as a result. RA 8344 apparently provides penalties for this sort of thing but they are of little value to the child or the parents in the Bohol case and their enforcement would no doubt take eons to resolve through litigation. I am quite sure that this is not a unique incident, many deaths in the Philippines must be attributable to an inability to pay up-front medical fees—and there is an intention to privatize all medical facilities—people should really be worried by that prospect.

    This rush to be seen as a “Tiger Economy,” to be the leading GDP growth nation in Asia, to be a star technologically, to attract Rolls Royce and Maserati dealerships, develop “Smart” office blocks and condominiums and the other latest gizmos that are commonplace in the world’s advanced economies has missed some things out. It’s as if there has been a leapfrogging over societal matters. “Boing” and suddenly we are there up front with Singapore and the USA, in fact we are doing better than Singapore or so it is reported.

    Of course, we all know that growth has not been inclusive. There is obviously something wrong with the way in which redistribution takes place—if it takes place at all, and that in a nation with the highest income tax rates in the region. The government’s money just vanishes, a few trillion comes in and there is a couple of billion left to do things for the people.

    A full service general hospital of about 800 beds enough to deal with a population of about 250,000 should cost about P800 million—1 billion to build and equip and be staffed by about 1,500 people. A school costs about P25 million per classroom. Given that the Philippines national budget for 2014 is about P2.27 trillion, then even excepting all the other things that government has to spend money on things like airports, roads, ports, propping up the central bank, and its own administration it intuitively seems that, indeed, the shortage of public schools and medical facilities is not because of a shortage of government income such that the government must claim that it just doesn’t have the money to provide these facilities so we have to look to the private sector for its support.

    There seems to be a big issue on the prioritization of government money; the welfare of the citizens seems to be very low on the priority list, whereas propping up the central bank’s reserves seems to be a matter of very high priority. This, of course, probably is beginning to sound like an argument in favor of discretionary political funds – give the money to a congressman or senator and they will spend it in the best interests of their constituents. Theoretically, yes, that is what should happen, but it would appear that is not what actually happens, money just vanishes. So budgeting has to be done in a very disciplined way if necessary accepting a certain amount of leakage along the way, but to serve the interests and needs of the people rather than personal egos and it must be managed and controlled in a similarly disciplined way. In fact, you could easily imagine that the most important job of the President of the nation would be to ratify the national budget. Government takes its responsibilities with a firm, determined, and informed hand and shows everybody that it is doing so, it has to be seen to be in control and accountable.

    It is surely not rocket science . . . or is it?

    Mike can be contacted at mawootton@gmail.com


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