A transparent budget

Corporate Watch
Amelia H.C. Ylagan

Posted on August 04, 2014

AT THE HEIGHT of the moral turbulence in President Gloria Arroyo’s term, investigation upon investigation of alleged anomalies in government piled thick to numb social attention on what maneuverings there might have been in the Countryside Development Fund and the diversion of savings in the national budget. The pork barrel grand scam that is now being investigated five years retroactively was thriving then, wallowing in the murk of graft and corruption.

“President Arroyo could choose who and how much to give to each congressman or senator, which explains why some have more than others in the Commission on Audit report (that exposed the Janet Napoles pork barrel mega-scam). But under this (Aquino) administration, everybody gets the P70 million (for congressmen) or P200 million (for senators) every year,” Camarines Sur Rep. Rolando Andaya, Arroyo’s former Budget Secretary, said in an Inquirer interview last year.

President Benigno S. Aquino III’s own Budget Secretary, Florencio Abad, confirmed this, saying this allocation was adopted as the norm beginning in the 15th Congress. He said this way was better than Arroyo’s because pork barrel releases were more transparent and discouraged “congressional insertions” where representatives lobbied agencies for more projects in their districts during budget hearings. (These insertions by Congress self-servingly increase the budgets from the original proposed by the Executive branch. Constitutional experts say the budget can be cut by Congress but not increased.)

Andaya acknowledged that the repeated failure to enact the budget on time during the Arroyo years had by default given Arroyo the final say on how to use the savings or unused allocations in the budget for the new fiscal year. The same Inquirer expose on the Napoles pork barrel scam quoted the COA that “Arroyo was already spending more than the 2012 pork-spending level in the last few years of her administration during which she faced impeachment cases and congressional probes of projects tainted with corruption.” Yes, the timely approval of the budget under the Aquino administration ensured more fiscal discipline than during the previous administration, Abad said.

In the quiet before the hurly-burly of the Napoles expose in 2013, the national budget increased 29% from P1.4 trillion in 2009 to P1.8 trillion in 2012, boosting the Priority Development Assistance Fund (PDAF) 267% to P24.24 billion in 2012. The pork barrel of senators burgeoned 67% to P4.14 billion in 2012 from P2.48 billion. The House of Representatives pork barrel allocation grew nearly five times to P20.1 billion in 2012 from P4.12 billion in 2009.

Civil society, riled by the grand scale of the apparent collusion of some lawmakers with Napoles and her fake or conniving nongovernment organization (NGO) beneficiaries, turned its focus on pork barrel transactions beyond the 2007-2009 scope of the COA audit. Hopefully not to the advantage of identified alleged partners-in-crime of Napoles, eyes are now on the Disbursement Acceleration Program (DAP), a stimulus program of President Aquino which draws funds from savings and re-allocations in the budget. The angry people cry out: Can he do that?

On Nov. 19, 2013, the Supreme Court declared as unconstitutional the controversial PDAF, or more commonly known as the congressional pork barrel. On July 1, the Court declared the DAP as unconstitutional. The Court also declared as illegal the portion of Presidential Decree 910 that allows the Malampaya fund to be used “for such other purposes” as determined by the President.

The P27 billion in PDAF has been re-allocated to five departments in the P2.27-trillion national budget for 2014, and the DAP practice had been stopped since late 2013. There is no pork in the P2.606-trillion 2015 national budget just submitted to Congress, the President assures all. Both houses of Congress committed to pass the budget before year end. No chance for insertions or diversions like in Arroyo’s time. There is a commitment that savings will not be re-allocated and transferred by the President.

All discretionary funds are now being closely watched, and already, civil rights advocates are agitating on unappropriated and other undefined funds in the budget, which will be under the control and disposal of the President. Some budget experts are worried that the 15.6% increase in budget from 2014 imbeds savings that can later be scraped up for other areas needing funding. Even though the Supreme Court has unanimously declared the DAP unconstitutional, and redirecting savings not allowed, President Aquino in his State of the Nation Address last week said the Executive would submit a joint resolution asking to define savings, in a perceived move to try to save some aspect of the DAP for unforeseen operational demands.

President Aquino is also requesting a supplemental budget to augment the lack of funds for projects stalled due to the Court’s prohibition of the DAP practice, according to the news. Surely (or hopefully) there will be transparency and integrity in the disbursement of public funds, with the overload of PDAF, DAP, Malampaya and other glowering chimeras of corruption spooking us. But cynical observers may think this whole budgeting effort can always find ways to tuck in some goodies for the unscrupulous.

The Philippine budget process and material scored 48% in the 2012 Open Budget Initiative (OBI) of the International Budget Partnership, a world rating system for budget transparency. The Philippines has had a negative rating since its budget was looked at in 2009 at the height of the Arroyo administration’s integrity and governance problems. The Philippines is in the company of Kazakhstan, Romania, Mozambique, Albania and Tanzania in this ranking, below Indonesia (62%) but above Thailand (36%) in the measurement of how much information is available and analyzable in the national budget.

The Filipino people have a right to know where their money is to be properly and honestly used by those elected to public office.

Amelia H.C. Ylagan is a Doctor of Business Administration from the University of the Philippines.