Business World, 24 July 2013


The Department of Social Welfare and Development as gatekeeper to congressional pork? That, effectively, was Budgetary Secretary Butch Abad’s solution to the grand misuse and abuse of the Priority Development Assistance Fund (PDAF). Last week, Abad announced that “In the 2014 GAA (General Appropriations Act), we included a special provision qualifying the PDAF that only NGOs (nongovernmental organizations) accredited by the DSWD will be eligible as recipient or implementing agency.”

DSWD Secretary Dinky Soliman, in a text message, confirmed the department’s planned expanded role in ensuring the integrity of PDAF disbursement.

“The idea of accreditation came about even before the… exposé but also as a response to reports of abuse,” Abad added. Seriously?

Don’t you smell a rat here? I do. The idea of empowering DSWD as the gatekeeper of pork barrel came before the 10-billion PDAF and Malampaya Fund mess? Is there a conspiracy to solidify DSWD’s power over the pork barrel in preparation for the 2016 elections?

This is a cure worse than the disease. Not only will the pork barrel continue to exist, and perhaps even flourish, but it will effectively be controlled by one of President Aquino’s closest allies. Combine this with Mr. Aquino’s continuing refusal to have a Freedom of Information (FOI) Act approved by a friendly Congress, and the result will be the disbursement of public funds with little or no scrutiny by the general public.

Mr. President, the Filipino people, your bosses, are beginning to believe that you lied to them when you strongly supported the FOI during the presidential campaign, yet you continue to stonewall its congressional approval. Did you?

The first best solution for the “pork barrel’ mess is for the President to exclude the PDAF from the 2014 national budget. The Constitution is very clear: Congress may decrease but not increase the budget as submitted by the President. With PDAF excluded in the President’s Budget, Congress can’t do anything. No law is required, only presidential will.

The second best solution is for the President to gradually taper off the entitlement of senators (now 200 million per year) and congressmen (now 70 million per year) to as low as zero for senators and 25 million for congressmen by 2016. Legislators should focus on passing laws and exercising its oversight duties, not construct bringing pork to his district.

Even with the much lower PDAF allocation, the fund should be purely for hard infrastructure, nothing for “soft” projects.

With no soft projects, the proposed questionable role of DSWD as keeper of the pork will be avoided.

Imagine the DSWD Secretary having the god-like power of determining which NGO will survive and which will die. By the way, in the old days, NGOs were volunteer organizations surviving on private sector grants. They don’t compete for public funds.

Giving the right to choose who the legitimate NGOs are, and therefore, potential recipients of government funds, to the DSWD Secretary constitutes undue delegation of authority. Effective another layer is placed on the use of public funds. Significantly, such delegation has the effect of changing the balance of power enshrined in the Constitution. The President, through, the DSWD Secretary would have effective control over funds that legislators are supposed to control.

Under a Secretary who’s the alter ego of the Chief Executive and hence a political individual, the flow of public funds will be subject to grave abuse. Where tens of billions of public funds are involved, unbiasedness in the release of public funds cannot be expected. With the power to accredit eligible NGOs, the DSWD Secretary may allow funds to flow only to “friendly” NGOs and shut off funds to “unfriendly” NGOs.

This will unduly politicize an agency who’s main mandate is to take care of the welfare of the underprivileged, regardless of political color.

I have nothing against Secretary Soliman, but she is mortal, not god. She was once head honcho of CODE-NGO. It’s the NGO that benefited from one of the shadiest financial scams involving NGOs in Philippine history, the 10.1-billion PEACE bond, which was issued during the graft-ridden Macapagal-Arroyo regime.

Supply creates its own demand, as economists love to say. Make money available, be it through the General Appropriations Act or through other off-budget, shadowy, funds — the PAGCOR Fund, the PCSO fund, the Malampaya Fund — and it will surely attract schemers, opportunists, corrupt public officials and unscrupulous NGOs.

Recipients of public funds should be financially responsible and accountable. Unless NGOs have the capability and willingness to subject themselves to government budgeting, accounting, and auditing rules and regulation, then they should not receive public funds

But it creates a bias based on size. The big, organized NGOs may be compliant but the small, start-up NGOs may be non-compliant. Sadly, it is the big NGOs that have mastered the art of lobbying, using influence, to get as much access to public funds as possible, both at the national and local levels.

In the government, public officials who handle public funds have to be bonded. Similarly, NGOs that receive public funds should also be bonded. The higher the amount involved, the higher the value of the bond. I wonder if any, or all, NGO-recipients of PDAF in the 10-billion Fund mess were bonded?

Summing up, here’s a list of policy recommendations on the PDAF fund scandal. Pass the Freedom of Information Act. A government that is truly committed to openness and fiscal accountability should welcome, not resist, the FOI bill.

As a first-best solution, abolish the PDAF. As a second-best solution, gradually phase it out. Limit PDAF’s use to “hard” infrastructure. Capital projects are easier to monitor than “soft” projects.

Limit the release of PDAF to national government agencies. Releases of PDAF funds to local government units should be discontinued, since releases to LGUs have become a major source of corruption, too.

Finally, reject — repeat reject — the dark proposal to empower DSWD as the gatekeeper of the congressional pork. Don’t politicize the agency whose main mandate is to improve the welfare of the underprivileged.