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Teofisto Guingona IIIBukidnon Rep. Teofisto Guingona III has taken on the decidedly ‘unsexy’ task of reforming the Philippine government’s budget process. Here’s why we should bother about the billions on the books

How important is the national budget? Why should we care about it?
The budget is the lifeblood of the national government. It is the embodiment of our hopes and aspirations for ourselves, our children, and our children’s children. If the process for making it is flawed, then, our plans will be flawed. We are undeniably all the worse for our flawed budget process, and that can be measured in terms of our people’s continued suffering.

The General Appropriations Act (GAA) is not merely about numbers. The numbers are important only to the extent that they reflect our nation’s fiscal resources and only to the extent that these resources are deployed towards meeting our national objectives.

The process of crafting and implementing the national budget is not an accounting exercise but a political one. The GAA can be tinkered with if legislators become too lazy to really look at every budget entry. The whole ritual of passing the GAA simply follows the bandwagon effect or “majority rule” with little care for caution.

It is time for the public to care and understand how the national budget is prepared because it is our responsibility to know how government spends our taxes.

What’s wrong with the current budget system? How does it allow onerous deals like the 728-million-peso Fertilizer Fund Scam?
In business, whatever is unspent from an annual budget is considered savings, and is available for use in succeeding years.

In government, savings can result when a budgeted amount is simply not released or is impounded. Sometimes, in a reenacted budget, the amount budgeted is not released because the project has already been completed. Even when released, a budgeted amount or appropriation becomes savings when not used or disbursed by the agency [it was given to.]

Under our system, savings may be re-aligned by the President for items other than what was originally budgeted.

Here lies the source of common misunderstanding and the occasion for much abuse. Because impoundment can create savings that can be realigned without the need of congressional authorization, impoundment is an attractive tool for the President to manipulate the budget.

The Arroyo administration has mastered budget manipulation. It impounds programmed funds from districts to make opposition congressmen think twice about impeachment. Conversely, it pours un-programmed cash into allies’ projects. Each year, it habitually delays budget passage to get extra funds that end up as “savings.” The President then spends these “savings” as she wishes. Contrary to constitutional rules, there is no transparency at all.

Former Agriculture Undersecretary Jocelyn Bolante took advantage of the budget process to release at least 728 million pesos in funds supposedly for fertilizers to local officials during the 2004 presidential elections.

Since 2004 was a reenacted budget year, Mr Bolante had a total of 3.83 billion pesos at his disposal under the Ginintuang Masaganang Ani (GMA) program. Of this amount, 970 million pesos was available from the continuing appropriation of the previous year’s GMA budget. It was from this budget item that Mr Bolante was able to source the 728 million pesos he allegedly used to purchase overpriced fertilizers.

Mr Bolante also had access to another 2.86 billion pesos as a result of the reenactment of the entire 2003 budget for the GMA program. For what purpose? Certainly not to buy the items already purchased in the previous year.

Based on documents, these amounts were released in just one week. Mr Bolante was also able to get the funds released within a day or two of requesting for them. That is expeditious even by the standards of family-owned corporations. It’s as if he had an ATM card for the National Treasury with no limits on withdrawal amounts.

The fact that he has begun to fade from our collective memory shows just how well Mr Bolante was able to work the system. My worry now is that he set a pattern of procedural abuse that others may follow.

What safeguards need to be in place to prevent a repeat of the Fertilizer Fund Scam? What accountability does the executive branch really have for its spending?
If the budget is critical to our future, then let us demand that it be made transparent. Let us demand that the budget be posted in detail on a public website hosted by something more powerful than a Pentium 286 desktop. Let us study the budget, understand it, and debate on it. Finally, let us hold our public officials accountable for it.

The Commission on Audit should be empowered to do their audit work and cover special purpose funds, lump-sum amounts, and discretionary expenses to ensure that funds have been disbursed, and were disbursed only for their authorized purpose.

Deeper than policies and larger than personalities, it is institutions that structure behavior and motivate public servants. Institutions are simply the “rules of the game” in society—formal rules, informal constraints, and their enforcement—which reduce uncertainty, generate regular behavior, and allow people to get on with everyday business. Our country is suffering from institutional deterioration, and we should do something about this too.

We need to make budget reform a big issue, even an election issue. We have to push for putting the process as an issue in the 2010 presidential elections in an effort to prevent the use of public money for campaign kitties.

We also have to demand for a participative and transparent budget process. Ownership of the budget must be returned to the people by letting them take part in the budget process.

We have to open up the budget process to public scrutiny for better budget targets and allocations at the national and agency levels. Budgeting should not be the exclusive turf of the executive and the legislature.

Officials in the executive and the legislative should also be knowledgeable on the budget process. They have to understand the significance and consequences of accountability, transparency, and participation in national budgeting.

We need to have a budget law that is crafted not by the executive who will mostly benefit from it. What we have now is a martial-law-era Budget Reform Decree that grants enormous powers to the chief executive.

And we need to re-establish the fiscal standard of a balanced budget as a fundamental standard of fiscal responsibility. Together, let us advocate fiscal morality, not just fiscal responsibility.

You have a series of bills that aim to reform the budget system. What obstacles have you encountered in trying to get them passed?
I have already filed seven bills and one resolution toward reforming the budget process. They are now gathering dust on the shelves of the Committee on Appropriations. I expected that. I suspect that they impinge too much on to the President’s discretion to be seriously considered for passage by her allies in the House leadership.

Print ed: 01/10


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