Business World, 11 September 2013


In Philippine politics, one needs a lead time of at least two years to adequately prepare for a presidential run. Some prepare for it for most of their adult life. This lesson was not missed by Budget Secretary Butch Abad, the de facto president of the ruling Liberal Party. A reading of the 2014 President’s Budget unmistakably shows that the party in power is gearing up for the 2016 presidential race.

Mr. Abad knows the importance of the 2014 and 2015 President’s Budgets for increasing the chances of victory for the LP presidential candidate in 2016. The passage of the 2016 President’s Budget is iffy as political partisanship heats up in 2015, if not earlier.

Here are some signs that the budget is prepared to favor the ruling party. First, the 2014 budget for the Department of Interior and Local Government (DILG) is loaded. The DILG is headed by the LP likely presidential candidate in 2016. I estimate, conservatively, that the DILG budget contained some 6.9-billion discretionary spending or “pork” for some.

DILG’s major mandate is the maintenance of peace and order. The DILG’s influence over local officials is grossly exaggerated. As envisioned in the Local Government Code of 1991, the power of the DILG Secretary over local government units (LGUs) is mainly supervisory, not control.

Here’s the brutal truth: an effectively decentralized government setup is consistent with a weak DILG Secretary. The more controlling the center, the less autonomous the LGUs.

In 2014, LGUs have access to the 341.5-billion Internal Revenue Allotment. If the desire is to make LGUs observe the “hard-budget” constraint, then they should be left alone and live within their means.

What then is the justification for the half-a-billion “Performance-Based Challenge Fund for Local Government Units?” Nothing. Except, perhaps, for the DILG Secretary to play the role of a mini-god.

What’s DILG’s business implementing the 2.2-billion potable water supply project? That’s better left with either the Department of Public Works and Highways or the Department of Health.

What’s DILG’s business managing the 1.2-billion program for informal settler families (ISF) in dangerous areas? That’s better left to the National Housing Authority in coordination with the Department of Environment and Natural Resources.

Second, Mr. Abad has initiated the Bottom-up Budgeting (BuB) approach. It may prove useful to improve local governance. But its relevance to national budgeting is likely to be counter-productive. Didn’t we elect our representatives to decide in our behalf? Why leave decision-making to a bunch of NGOs whom the Department of Budget and Management has hand-picked? How can one choose the appropriate NGOs out of the 60,000 NGOs in the Philippines?

The BuB approach started at 8.4 billion in 2013 but has ballooned to 20 billion in 2014. The amount is intended for various LGU projects, and is scattered in select departments, the bulk of which, about half, goes to the Department of Agriculture (DA).

But isn’t the DA the source of a lot of corrupt-laden, non-transparent, sometimes “ghost” projects?

If not nipped in the bud, this 20-billion BuB projects could easily multiply many times over in 2015.

Third, even if the BuB amount were not increased in the President’s Budget, there is nothing that will prevent President Aquino from expanding the same, many times over, through the presidential power of augmentation. Such power has been used and abused by the previous administration. Do you think such abuses have not been committed by the present administration? Think again.

Here’s one incontrovertible proof that such abuses have continued: while the appropriation for Financial Subsidy to Local Government Units was only 200 million in 2012, actual disbursement was 2.936 billion. Actual spending zoomed 15 times what Congress authorized the President to spend! Incredible but true. And this is not an isolated case.

Eat your heart out, Vice-President Binay!