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Businessworld
In his veto message, President Benigno Aquino III triumphantly said: “For the first time in over a decade, we have a budget passed on time.” It’s an achievement worth celebrating but only because the previous Arroyo administration had wantonly disregarded all existing budget rules. During the past nine fiscal years, not a single national budget was passed on time, and for three of those nine years, the government operated on a reenacted budget for the entire year.
Having the national budget passed before the start of the fiscal year is important for effective governance and for making it possible to complete most of the infrastructure projects before the onset of the monsoon rains. Passing the budget before the start of the new fiscal year should be the norm; not passing it on time should be the exception.
Arroyo, during her nearly decade-long stay in Malacañang, had disregarded all sound rules and regulations of public budgeting. Aquino, through the 2011 budget formulation and authorization, has managed to restore the integrity and decency in the budget process.
The challenge for the Aquino administration is how to institutionalize the early approval of the national budget year in and year out. A further challenge is to make good the claim that Congress has conscientiously chosen “to adopt a national budget that enshrines transparency and accountability.” The second part remains to be seen and the Executive plays a big role in making sure that the national budget is implemented in a transparent and accountable way.
Ironically, practically the same set of political personalities who allowed Arroyo to deliberately violate the budget rules for almost a decade aided Aquino in restoring order in and respect for the budget process.
What explains the prompt approval of the 2011 budget? First, the fresh mandate of a newly elected President and his overwhelming public approval rating to date is hard to ignore. It is politically smart for a legislator to go along with a President who is popular and who is likely to be around for the next six years.
Second, the congressional pork was not only retained, it was enhanced. The 2011 budget includes P200 million for the vice president, P300 million for senators (from the previous P200 million), P120 million for congressman (up from P70 million), plus P15 million for members of the Commission on Appointments.
Will the political alliance hold in future years? It would depend on how the pork will be distributed. Making it available for all — friends and foes alike — is going be a big help. Cherry-picking would create bad blood and may cause the political alliance to collapse. It will delay project implementation, and put at risk the early approval of the budget in future years.
Strict compliance with the menu of projects will enhance the productivity of public funds. But such will have little appeal to rent-seeking politicians. Publication of all releases from the pork barrel allocation in a dedicated Web site (say, PDAP.gov.ph) showing the type of project (roads, irrigation facilities, ports, seaports, etc.), brief description, amount, and later, name of contractor, will enhance transparency and public accountability. But politicians who prefer to operate under a cloak of secrecy may not like it.
While the pork barrel system is allowed to stay, its continues existence should be subject to clear rules on transparency and public accountability. The use of public funds should constantly be in the public eye. The Web site should be maintained, and updated daily, by the Department of Budget and Management (DBM).
The centerpiece of the 2011 national budget is the P21-billion conditional cash transfer (CCT) program. It has remained intact despite serious doubts raised by legislators on the ability of the Department of Social Welfare and Development (DSWD) to spend such a huge budget.
One of the 13 items directly vetoed by the President was the use of savings from the Conditional Cash Transfer Program. The special provision reads; “If by the end of the third quarter of FY 2011, it has been determined by DBM and DSWD that savings from the full-year requirements of the program will be generated, the same shall be utilized to augment the appropriations for basic education, maternal health care and immunization.”
No doubt, the alternative uses proposed by Congress are worthwhile. These are areas where the Philippines is seriously lagging behind in its Millennium Development Goals. But the President vetoed the provision because it infringes on his exclusive constitutional power to augment any item in the appropriations of the Executive Branch.
The allocation for CCT as proposed by the President was left intact, despite the spirited attempts from various sectors to have it cut. The challenge for the Executive is to demonstrate that it can disburse the P21-billion cash transfer budget judiciously, effectively and transparently.
The administrative costs of implementing the cash transfer program should be kept to the minimum in order to ensure that the bulk of the P21-billion allocation goes to its intended beneficiaries. The plan to spend P4 billion to run the entire program is wasteful and has to be drastically reduced. Spending one peso for every four pesos of cash transfer is excessive and extravagant.
The cash distribution system under the CCT program should make use of public-private partnership. All three major telcos — Globe, Smart, and Sun — should be tapped to enhance competition and efficiency in public service delivery.
Leakages — benefits going to unintended beneficiaries — should be minimized. One way of doing this is to post the names of beneficiaries in a dedicated Web site (say, CCT.gov.ph) with the corresponding monthly cash support, by region, by province, town and barangay. Making this list available to all parties concerned will enhance the transparency and public accountability of the CCT program. Concerned citizens may then bring to the attention of government authorities those who are truly deserving and those who are freeloading. In today’s high-speed and large-storage computing capacities, setting up this list is doable.
The respect for and the integrity of the budget process as enshrined in the 1987 Constitution was restored through the prompt passage of the 2011 national budget. This restoration has to be supported, nurtured, and institutionalized.
