The Market Monitor Minding the Nation's Business
Luis Leoncio
A new Malacañang-sanctioned budgeting scheme called Grassroots Participatory Budgeting Process (GPBP) has allotted P20.9 billion from the P2.606-trillion 2015 national budget to fund thousands of projects in various towns and cities nationwide under a so-called bottom-up budgeting (BuB) scheme developed by the Department of Budget and Management.
While Budget Secretary Florencio “Butch” Abad has been extolling the advantages of the new scheme, budget watchdogs suspect it to be nothing but a political tool designed to ensure the victory of the Liberal Party in next year’s presidential elections.
The suspicion seems justified. The 20.9 billion is mostly lodged in the budget of the Department of the Interior and Local Government (DILG) headed by Secretary Manuel A. Roxas II, the presumptive standard-bearer of the ruling Liberal Party in next year’s elections. Abad himself is a political strategist of the ruling party. He was also the chief architect of the controversial Malacañang-approved Disbursement Acceleration Program (DAP), parts of which were declared unconstitutional by the Supreme Court.
Abad has described the GPBP as part of the Budget department’s campaign for citizen participation in public spending.
But there is nothing on record to show clearly how the participatory mechanism involved people’s organizations and local-based NGOs in identifying and prioritizing the 14,300 projects.
On closer scrutiny, the amount suspiciously approximates the P24.9 billion in Priority Development Assistance Fund (PDAF) already stricken off the General Appropriations Act after the Supreme Court (SC) ruled in 2013 that the legislative pork barrel is unconstitutional.
Former National Treasurer Leonor Briones, also lead convenor of budget watchdog Social Watch Philippines, said the P20-billion GPBP is part of as much as P50 billion in the 2015 GAA that could be easily converted into the ruling party’s campaign funds for 2016. Among the funds camouflaged in the 2015 budget is the P33.13-billion assistance to local government units (ALGU), which is separate from the internal revenue allotment (IRA) received by local government units.
Briones said the ALGU item has vague provisions.
“All local governments receive IRA but this ALGU, what is the basis for the selection (of recipients)? So the standard will only be known after (an) audit,” she added.
Briones said while the GPBP supposedly gives LGUs the privilege of proposing their own projects, it is viewed by administration critics as a clone of the unconstitutional PDAF.
The ALGU is included in the list of special purpose funds under the discretion of the Office of the President. The PDAF was also placed under this rubric before being stricken off by the SC.
Briones said the special-purpose and unprogrammed funds that are worth P500 billion in the 2015 budget, are lump sums the use of which is under the discretion of the President.
Abad, defending the BuB, has said local governments and civil-service organizations (CSOs) “can effectively respond to the different needs of their communities through the BuB.”
The bulk of the amount, Abad said, would be channeled through agencies like the DILG as well as the departments of agriculture, social welfare and development, education and health.
On top of the allocations to these agencies, P2.83 billion would be released by the DBM directly to the LGUs through the Local Government Support Fund, Abad said.
Abad gave assurances the allocation of BuB funds for priority local projects is politics-free, and the release would be based upon LGU compliance with “governance conditions.” These included, Abad said, not receiving an adverse report from the Commission on Audit (COA); compliance with the full-disclosure policy; and submission of the LGU Public Financial Management Improvement Plan.
Citing DBM data, he said 573 cities and municipalities have yet to comply with these conditions, while 1,017 have already complied with the requirements.
“We urge local government officials to prioritize their compliance with these conditions. Otherwise, their allocated BuB funding will be forfeited,” he said.
Participatory planning exercise
The BuB projects were first jointly identified by LGUs and local CSOs through a participatory planning and budgeting exercise.
At a BuB forum in Vigan City last February 13 attended by almost 200 local chief executives from the Ilocos Region, Abad delivered a presentation on the administration’s reform agenda and its goal of deepening the devolution to LGUs.
Abad said during the forum: “Bottom-up Budgeting in the Philippines is a landmark reform, because we are the first country in the world that has implemented participatory budgeting at the national level.”
Last September 2014, the Philippines won the Gold Open Government Award for the BuB program in the inaugural Open Government Partnership (OGP) Awards in New York City. The country was recognized for its outstanding efforts to deepen citizen engagement in the budget process. Along with Denmark and Montenegro, the country was given one of the three gold awards to recognize innovative and citizen-driven initiatives in designing and implementing public policy.
Budget slanted toward DILG
Even Sen. Miriam Defensor-Santiago believed the budget was inordinately slanted toward the DILG.
Several portions of the budget, according to Santiago, point to it being stuffed with pork in the guise of participatory budgeting. It is geared toward building up a campaign kitty or aligned with the pre-election buildup of the LP since several components are left to the discretion of agency heads to disburse.
Santiago said crucial to the manipulation of the 2015 budget to serve the interest of the incumbent was the redefinition of savings.
She noted in a privilege speech that, “the 2015 budget invents its own definition of savings in Sections 67 to 70, particularly Section 68, which provides that savings can be declared at any time for whatever might be considered ‘justifiable reasons.’”
Among the Palace acts ruled as unconstitutional by the Supreme Court in the DAP was “the withdrawal of unobligated allotments from the implementing agencies and the declaration of the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without complying with the statutory definition of savings contained in the General Appropriations Act.”
The SC ruling already required that savings could be realized only after the end of a fiscal year.
The DBM said 300-400 of the poorest towns were engaged by the government in crafting community-level poverty-reduction and empowerment plans. State documents identify the DILG as the main distributor of funds under the scheme.
From April to June last year, DILG gave away P6.634 billion in assistance to different LGUs and agencies—61 LGUs in Eastern Visayas receiving P215 million on April 6, 2014; 54 LGUs in the Cordillera Autonomous Region (CAR) getting P2 million and 23 other LGUs receiving P258 million on April 24, 2014; and 21 LGUs in Northern Mindanao receiving P38 million on May 21, 2014.
Also, 17 police stations in Albay last May 27, 2014, obtained P34.1 million; 54 Bicol LGUs also received P91.6 million on the same day. On May 28, 36 LGUs in Camarines Sur received P641 million while 23 police stations got P14.6 million.
The Bohol provincial government also received P2.5 billion in Yolanda assistance in June 6, 2014, while 68 other LGUs in the province were given P662 million.
These were on top of 24 fire trucks, two new fire stations, three new police stations and the repair of 11 police stations in the region with a total cost of P219.1 million.
Diokno: BuB a political tool
According to former Budget Secretary Benjamin Diokno, the BuB is an extension of previous initiatives to involve regional development councils in the budget process. Instead of the supposed reforms it represented, it appears to be more of a political tool to get the support of favored civil organizations.
In 2013, the budget items placed under the BuB scheme totaled P8.4 billion and grew to P20.03 billion in this year’s budget.
With the exponential growth of the funds placed under the scheme, it would not be far-fetched that the LP would have at its disposal nearly double the P24 billion yearly under the PDAF.
The use of NGOs and CSOs in the BuB scheme was notable in the sense that the pork-barrel scam of alleged brains Janet Lim Napoles was undertaken through the channeling of funds through these groups, bogus or not.
Another indisputable fact was that Napoles alleged in a sworn affidavit that it was Budget Secretary Abad who guided him in the forming of NGOs to divert government funds.
Though Abad has consistently denied the accusation, the ingredients of the PDAF diversion cycle of government funds, NGOs and implementing agencies, which grew in number under the BuB, are all present under the Palace reform measure.
Another common denominator is that Abad is on top of the BuB appropriations as he was in the diverted PDAF of the past.
In 2014, the budget as loaded in favor of the DILG contained P6.9 billion in discretionary funding, including the P500-million Performance-Based Challenge Fund for Local Government Units, the P2.2-billion potable water supply project and the P1.2-billion program for squatter families in dangerous areas.
The BuB scheme in that year also totaled P20 billion. Half of the projects are found under the Department of Agriculture, which has lately been the center of controversy regarding misappropriated government funds.
Diokno also cited the power of augmentation of the President, which rendered the budgeting process useless since he could increase a budgeted amount at will through authorization from Congress which is under the LP’s control.
Diokno noted, for instance, that while the appropriation for Financial Subsidy to Local Government Units was only P200 million in 2012, actual disbursement was P2.936 billion.