A matter of trust: the rest of the Abad story
Now THIS is trust. [Photo source: philstar.com]
What if the shrill cry for Secretary Abad’s resignation has been wrong all along, built on an emotional bubble provoked by enemies of the straight path, fueled by sensationalist headlines and leftist rants? Provoked by our own general mistrust of all politicians, even a good President.
What if that mistrust is wrong, too?
What if the Supreme Court is wrong, or remiss, or did a poor reading of the constitutional issues and historical precedents? (refer to Raissa Robles’ article).
What if we were too quick to judge? Didn’t have the whole picture?
What in the world are we doing?
The report which follows, an interview with Philippine Budget Secretary Butch Abad, was conducted by GlobalSource Partners in December of 2013. It was recently released for public readership. The interview gives us a better understanding of how the Philippine budgeting process works, what some of the challenges are, and why the current Administration applied DAP to the benefit of the Philippines.
It is rather striking to me how pragmatic Secretary Abad’s approach is. This is no conniving slackard staying in the shadows and shuffling bags of money for personal gain. This is a professional working to build a strong budgeting process.
This is something his colleagues have been telling us all along.
Why don’t we listen to those who know the secretary instead of the sensationalist headline writers? Or our own suspicions of everyone in politics?
He clearly has not been coasting on the job. He also has not been charged with any personal gains from corruption. I read this report and suddenly the shrill cries for Secretary Abad’s resignation rang small, hollow and grossly uninformed. I say this embarrassed because I, too, had suggested that President Aquino could have saved himself a lot of grief by suspending Mr. Abad.
Now I conclude that – once again – the President is right and I am wrong. This has happened on occasion, before.
In this instance, I should have heeded a stronger principle than political expedience: the principle of trust in a good man. Ah, make that TWO good men, Mr. Abad and Mr. Aquino.
Senator Drilon, upon hearing that President Aquino had not accepted the Secretary’s resignation, said:
- “I am not surprised. I know the President. His trust and confidence in the members of his Cabinet is not based on what may be convenient.”
The critics somehow seems to believe DAP is like PDAF, that in both cases, people abused discretion for personal gain. That illustrates how little trust the people hold for Philippine politicians, and how little understanding of the issues ordinary citizens possess. Or even EDUCATED citizens. It also illustrates how easily suspicions emerge as shallow emotional conclusions hyped by sensationalist headlines.
And – perhaps more important than anything . . . it illustrates how vengeful those penalized by the straight path are, and how ruthless the leftists are in seeking to destroy all that Mr. Aquino has built. The people we should be suspicious of are not those in the President’s cabinet, but those who are relentless critics of everything the Administration does.
And we should be suspicious of Mr. Binay for not taking the PDAF/DAP brouhaha as an opportunity to speak out strongly against “power and favor” corruption. We should be suspicious that he does not forthrightly support the President’s straight path initiatives.
I’ll leave you with the report now. It is lengthy so I have highlighted a few of the sections I found interesting (in case you are in a hurry).
Excerpt from Introduction by Dr. Romeo L. Bernardo
In his three and a half years so far atop the Department of Budget and Management, Secretary Abad was a prime mover in what the World Bank described as significant reforms in public financial management. Apart from the greater transparency, accountability and openness to civil society participation that the reforms brought to the Philippine national budget process, the changes also helped to improve budget efficiency, thereby creating fiscal space for government and allowed faster disbursements to support economic growth and greater social inclusiveness.
The Point Guard
(In this, our year-end report, we print in full our conversation with Philippine Budget Secretary Florencio “Butch” B. Abad, by all accounts one of the President’s most trusted men. The “point guard” on budget matters, he talks about the pork barrel controversy and its possible impact on public expenditures and the administration’s reform agenda, as well as spending priorities in the 2014 budget, including programs in support of public-private partnerships. He also answers our questions about the Liberal Party’s plans for 2016.)
Face- to-Face with the Budget Secretary
Florencio “Butch” B. Abad, the Philippine Budget Secretary, is one of President Benigno Aquino’s most trusted men. Acknowledged by the President as his mentor from his days as a neophyte congressman in the 11th Congress (1998-2001) when the Secretary was already serving his third of four terms representing the northernmost province of Batanes (1987-89,1995-2004), Sec. Butch, as he is referred to by staff, has also been tagged as the administration’s “political ideologue”, and is an influential member of the President’s Liberal Party, which he headed as its president from 1999-2004. Described as a politician and a technocrat, Secretary Abad, a lawyer by training, has the respect of colleagues in and out of government, having been involved in the reform movement during Martial Law, under which he was twice jailed, and spending his early professional years in socially-oriented civil society organizations, including as trade unionist and head of an academic social and public policy center. Coming from a political family, he was a young supporter of the President’s father, the late Senator and democracy hero Benigno “Ninoy” Aquino, Jr., but only joined government after the restoration of democracy in 1986. Aside from Congress, he has held Cabinet posts briefly under Aquino I (Agrarian Reform, 1989-90) and the Arroyo Administration (Education, 2004-05, from which he resigned with nine other Cabinet members, dubbed the “Hyatt 10,” when an election fraud scandal involving the then-President broke).
In his three and a half years so far atop the Department of Budget and Management, Secretary Abad was a prime mover in what the World Bank described as significant reforms in public financial management. Apart from the greater transparency, accountability and openness to civil society participation that the reforms brought to the Philippine national budget process, the changes also helped to improve budget efficiency, thereby creating fiscal space for government and allowed faster disbursements to support economic growth and greater social inclusiveness.
Secretary Abad’s background in both social movements and mainstream politics equips him with a keen understanding of the imperatives for growth of democracy as well as the practical workings of governance. His ability to balance idealism and realism puts him in a good position to navigate the intricate process of reforming governance and public expenditure management. (On this, he can count on a trusted ally – his wife, Rep. Henedina Abad, currently Deputy Speaker of the House of Representatives).
As the President’s point guard on budget matters, he sat down with us on a Friday afternoon to talk about recent controversies – the Priority Development Assistance Fund (PDAF) and the Disbursement Acceleration Program (DAP), their impact on public expenditures and the administration’s reform agenda as well as spending priorities in the 2014 budget, including programs in support of public-private partnerships (PPPs). He also answers our questions about the Liberal Party’s plans for 2016.
GlobalSource Partners: What is the impact on government spending of the PDAF and DAP controversies, first in terms of the so-called “chilling effect” on bureaucrats who would understandably not exercise discretion if they see downsides to any action?
Secretary Abad: There will be an effect both from the expenditure side (the Executive) and oversight side (Congress and the Commission on Audit); in particular in trying to decipher what the Supreme Court means with its decision on the PDAF. But the bigger sources of concern are the cases being filed. As you said, by their nature, the people in the bureaucracy are conservative, it’s like “If in doubt, don’t.” But I think this will not be something that will be here for quite a while. This is just an initial knee-jerk, instinctive reaction. They will eventually come around.
What about in terms of how the new rulings may actually tie your ability to spend going forward?
Abad: Next year, we will be introducing a lot of reforms that will in fact provide more leeway for spending without much red tape. For example, we are going into a “GAA (General Appropriations Act)-as-Release Document” system. This means that as soon as the budget is signed, on the first day of the new year, about 90% of the items in the GAA are already considered released to the departments and agencies and ready to be obligated. The only items that you will need a special budget request for, which you will need a SARO (Special Allotment Release Order), are lump sums like the Calamity Fund.
Second, we adopted a policy of procuring in advance of the fiscal year. If you look at the procurement process, under ideal circumstances, it takes 3 to 4 months to bid out a project. In the past, when we allowed a two-year lapsing of appropriations, most projects would be implemented in the second year, not in the year the budget was passed. So we changed policies; now all appropriations will just have a one-year life and they need to start procuring on the last quarter of the prior year. So we are aiming for execution to be done for the most part in the first semester. Also, by next year (2014), because of the automation we have introduced, 80% of our disbursements will be bank-to-bank. We will no longer be using cash or checks for these. This will accelerate the payment system. We are also working on the other side of the transaction, which is payment to us. This is part of the Single Treasury Account, which by the way is going to save us a lot of money, not only from the revenue float but even more so from the expenditure float.
We were looking at year-on-year growth in government spending and it was very strong through July, started slowing in August and declined in September. Does this have anything to do with PDAF/DAP?
Abad: If it has, it would really be in September and October. I think any impact on spending may be in the very short term, maybe in the last quarter, but even then we are trying to make up for it in these last months. The other thing that would accelerate spending is the rehabilitation and reconstruction program in the three regions affected by the typhoon.
I understand that with Yolanda [international name, Haiyan] and all the typhoons, you have more leeway for spending. What are the guidelines for this?
Abad: Under a State of Calamity, we can procure on a negotiated basis P500 million and below. But the GPPB (Government Procurement Policy Board) met and adopted a policy that for the duration of the State of Calamity, we will allow negotiated procurement even for P500 million and above, so we can really accelerate spending for relief and rehabilitation.
And this period of calamity would extend for?
Abad: On a sliding basis, the relief will continue until end of January. And then they will phase in, as they are now doing, the rehabilitation. So I think the impact will not be for long and we are also driven by the policy of the President to build back better. It’s not just restoration but to climate-proof the design of the construction, so that would probably add about 30% to the cost.
So there will be some compensating, recovery-related spending.
Abad: We are hoping that it should induce additional growth income. There is also strong international support which can bring in more grants and concessional loans.
What would be the impact of the Supreme Court decision regarding the unconstitutionality of the PDAF on the quality of engagement between the Executive and Congress?
Abad: Institutionally, I don’t think that the inherent powers of the Congress have been eroded by the decision of the Supreme Court. I am referring to the power over the budget, the power over appointments and the power of oversight. I think the problem is that all these years, Congress has been more preoccupied with constituency work service and not strengthening these powers, which they have, but they hardly use. And because of that, it also became a source of weakness. If the president withholds the pork, then politically, it impacts individually on the legislators, but institutionally they ought to be revisiting their powers to see how they can use that as a stronger lever. But the one good thing about the decision is clarifying the roles of the branches. In fact the gist of the PDAF ruling is declaring as illegal or unconstitutional post-enactment interventions by Congress, except when they are exercising their power of oversight
I see what you’re trying to do long-term in terms of improved governance. But I am more worried about the short-term. While the Supreme Court ruling prohibits Congress from interfering in execution, nothing prevents it from being involved, so it’s just a question of putting it ahead and being more participatory in some sense, and maybe if they can get their constituency involved in the process as well, you will actually have a more people-oriented budget process.
Abad: Exactly, there is nothing wrong with Congress participating during budget preparation, especially during budget authorization, because that really is in the realm of the power of Congress. But what I mean is they have to do more work in order to get their proposed projects into the Budget before it is enacted into law.
That will really impose more on you, right? To be more provocative or put it more bluntly, the PDAF system, stripped of the abuses or criminality of the Napoles type, in which each legislator gets a fixed allocation for projects for his constituency, is actually an efficient system that meets the political objectives of the legislators in an equitable devolved non-partisan and budgetwise limited manner, while engendering good working relationship between the executive and legislative branches which under a good president facilitates passage of key legislation. With the Supreme Court decision, you will need to find less transparent ways, involving 250 congressmen and 24 senators in opaque negotiations with so many, with indeterminate bargaining outcomes, potential charge of partisanship, high administrative and friction costs and potentially larger budget spending distortions. How would you respond to this characterization?
Abad: You have a good point. In fact, the President once told Congressmen that if 300 of you called the Budget Secretary once, twice or thrice a week, can you imagine the time it will take him to answer each of you? And you will start by calling the provincial offices (of executive departments), the regional offices, then the Secretary, until you see your projects in the NEP (National Expenditure Program). As I mentioned, this is a lot of work that has to be done in order to get representatives’ projects into the Budget before enactment.
Is there a way of doing these efficiently before the budget is passed, without violating the Supreme Court ruling?
Abad: We haven’t been able to figure out how to do this in the most transparent way. In fact, the legislature is at a disadvantage here. At the same time, for us, administratively, it will mean a lot of work. The problem is the negative public reaction even to be talking to politicians; that the mere thought of the executive working with the Congress for projects in their districts is already to them repulsive. Our challenge, really, is how do we remove avenues for leakages and abuse; while at the same time addressing the need to deliver basic services to the people, including the constituents of legislators? The latter is a reality that we must acknowledge and address together – how do we help our representatives ensure that the legitimate needs of their constituents are met, and without resorting to patronage-based relationships of the past? Bottom line: we want to make public spending more transparent, more accountable and more empowering for constituents. The reality is that patronage cannot be overturned overnight: there are steps we have to take, milestones we have to meet . And I believe we are already moving forward in that direction – for one, we are already disclosing budget information in unprecedented ways, such as publishing detailed releases from lump-sum funds, including PDAF before it was invalidated by the Court, on our website.
In the meantime, what will happen to the administration’s priority legislation?Is there risk that the 2014 budget won’t be passed on time?
Abad: We have no doubt that Congress will pass the 2014 Budget on time, the way they ensured the early passage of our previous budgets. In fact, the Senate just ratified the 2014 budget and the House is about to do the same by next week, so that the GAA will be signed into law by December 20. (Note: it was already enacted into law on the said date.) This alone is a clear indication of the support the President enjoys in Congress. I think we will see the same support for our other priority bills.
On the subject of the DAP…
Abad: At this point that the case is being heard in the Supreme Court; forgive me if I’ll have to refrain from answering questions on this point by point. But I think that most would concede that the DAP has achieved its economic purpose in an unprecedented way so that today, we have a more vibrant economy and better risk profile.
We understand if you don’t want to talk about the Supreme Court case, but are there really serious implications if the Supreme Court would rule that either it is unconstitutional…
Abad: First of all, I think most people concede that the DAP has succeeded in bolstering public spending and economic growth. The issue is this: in doing so, did we abide by the rules? Our position is that if we go by the Constitution, statutes and practices in past administrations, we did. Just to be clear, DAP is not a fund but a label that we used to refer to the use of the president’s power over savings and unprogrammed funds – authorities that have been present and have been used by all previous administrations post-EDSA. To us it’s clear that DAP is not PDAF: the latter is a lump-sum fund, while the former is not a fund, but the label we gave for the mechanism of exercising the president’s Constitutional powers. It’s just unfortunate that the DAP got identified with PDAF, maybe perhaps because these two acronyms sound the same. On DAP, we acknowledge that the one that’s in the public consciousness, and also mentioned by the President in his recent public address, is the portion of the DAP that funded legislator-endorsed projects. Just to be sure, I checked the listing again, and all the projects went to national government agencies, not to legislators themselves.
One of my other worries is how a decision that the DAP is unconstitutional will affect the President’s ratings, and what it means for his remaining three years if his political capital were eroded. Aren’t you worried that a tighter or a more restrictive definition will lead to less flexibility on your part and will affect spending looking forward?
Abad: I wouldn’t want to speculate on the Supreme Court’s decision at this point. My hope, of course, is that the Supreme Court’s decision will put our country in a better place, just like the overall effect of their decision on PDAF, even with the practical challenges. More important, we’re not worried of a ruling that would tie the hands of the Executive in implementing the budget and addressing contingencies. At this point too, we already know a lot about the ins and outs of the Budget Process and we’ve also rolled-out important reforms to speed up the disbursement process. We also have a clearer idea of the structural bottlenecks that need to be addressed, such as the need to enable agencies to plan better.
What are the spending priorities for 2014?
Abad: A We have been able to significantly reshape the national budget to prioritize inclusive development. By 2014, the share of social services which increased from less than 30% in 2003 to 35% in 2013 will further increase to 37%; economic services will rise from about 20% in 2003 to 26% by next year. We have expanded our Pantawid Pamilyang Pilipino Program so we cover 4.3 million indigent households as well as 4.3 million high school children until graduation from secondary education. We are also near our target of closing our basic education resource gaps in classrooms, teachers and textbooks as well as in providing all poor households with universal healthcare services. We are also intensifying our investments in public goods for economic expansion. For one, we are targeting a public infrastructure spending level of 5% of GDP by 2016, from 2.3% this year.
How is the 2014 budget different from past budgets?
Abad: A lot. For instance, for the first time, the 2014 Budget will indicate the performance targets of each agency alongside their budgetary allocations. Through the GAA-as-release regime I mentioned earlier and the automation of financial processes, we expect to improve the speed of implementation of urgent programs and projects. Also in crafting this budget, we expanded allocation, by P20 billion, for local poverty reduction programs and projects developed with grassroots communities and local civil society organizations in over 1,200 cities and municipalities.
How would you assess progress in the reforms in the budget process you have introduced so far? (eg. linking budgeting with the development plans and programs, multi-year budgeting for capital outlays, performance based budgeting and auditing, single account for gov’t, etc.)
Abad: The changes we made to the 2014 budget would not have been possible if we had not previously gone through a tedious review and refinement of all major outputs and performance indicators of government agencies, or if we had not done a disaggregation of lump-sum funds and imposed a one-year validity of all appropriations. The roll-out of our Government Integrated Financial Management Information System (GIFMIS) by 2016 is also made possible by the joint efforts of DBM, DoF and COA to develop a Unified Account Code Structure and to harmonize charts of accounts and accountability reports. Overall, I think the budget process is in a much better state now than before and the recent turn of events gives us a great opportunity to install more transparency, strengthen the accountability of institutions, and intensify our citizen’s voice and vote in the budget process. In terms of supporting PPP, based on feedback from the private sector, it seems they are looking for certainty that government can deliver on its contributions to projects, as well as in case something happens, its contingent liabilities.
How is this handled in the 2014 budget?
Abad: We have P30 billion in the Risk Management Program under the Unprogrammed Fund. This will cover commitments made and obligations of the National Government in the concession agreements for PPP proj ects, for example for regulatory risks. Once we generate the money, we can always augment that.
Does this have to be appropriated every year? What the private investors are looking for is like a fund so that they will not be captive to the appropriation process.
Abad: Yes, this has to be appropriated every year. That is as much as we can provide.
Have you given thought to a multi-year allotment that commits government over a longer-term? Or does the process not allow it?
Abad: We are doing a MTEF [Medium-term Expenditure Framework] which is for three years. Based on these forward estimates, we can provide a MYOA [multi-year obligating authority] to cover them. We acknowledge that the MYOA does not bind the legislature, but given our budgetary system now, this is something which we think is viable.
Going to politics…taking Brazil as an example, former President Lula da Silva (in office from 2003 to 2011) who was very popular and was seen to have led Brazil in achieving sustained inclusive growth, was able to choose as a successor someone who had never won an election, who used to be his budget, I think. Who is the administration party eyeing to carry on the “daang matuwid” work?
Abad: She was Lula’s chief of staff, President Dilma Rousseff. But now that you mentioned Lula, I think that’s a template to look at, which is that rather than be distracted by naming somebody you know at the start, I think it is better and less distracting if all the efforts are made to make the President and his inclusive development program hugely successful so that near the end, the President will be in a strong position to name his successor, as his mother was able to do so in 1992. I think that’s the preferred approach. If you look at Lula’s social protection program, the Bolsa Familia, he was able to cut poverty by half after three years. So if we are able to push social protection, social services, the focus on jobs, agri-industrial development, tourism, and now the reconstruction, and of course we’ll grow the infra budget to 5% by 2016, those will help.
How would you assuage fears which we noted in our latest report, that the President’s popularity rating will fall further after Yolanda, and together with probable reduced influence over Congress and public confusion about DAP, he may become a lame-duck president?
Abad: I think that considering the last survey, despite all of the things that happened, he was still at 71%, and that’s still very good. So his popularity is certainly holding. If he is able to execute the rehab and reconstruction well, I think that will be at least be maintained. That’s why I think the President is far from becoming a lame duck, especially in our presidential set-up. Compared to the US, the Philippine president on paper is so much more powerful, especially if you give him all t he levers. The other thing people don’t appreciate is that this is a president who is concerned not only about leaving a legacy but who is concerned about the legacy left by the father and the mother. “Malalim yun” (very deeply ingrained). He will make sure that the successor will carry those through. I think that’s what’s driving him to make sure that he succeeds and that his successor can take over.
Personal question if we may, what are your plans for 2016? Optional.
Abad: After all of this is done, I look forward to taking a really good break, to catching up on my gardening and carpentry projects in Batanes, and to having more quality time with Emma, my granddaughter.
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The Society of Honor by Joe America 
A SHORTHAND HAIKU RE THE DAP ISSUE
(Maikling tula para maunawaan ang DAP)
May ibinulsa ba tulad nung kay Estrada?
(Were funds pocketed, which got Estrada busted?)
Mayroon bang pandarambong, tulad nung kay Bong?
(Was there plunder, like in the case of the movie actor?)
Mayroon bang nadale, tulad nung kay Enrile?
(Were there big losses in Treasury, like in the case of Johnny? )
Kung wala naman pala,
(If there is none at all )
Bakit gustong itumba?
(Why would you want the government to fall?)
I will try to follow this with a classification of the creatures that are calling for the President’s head, based on their authenticity, politics, biases, religions and motives. There is only a tiny number of people who are basing it on principle – the rest are basing it on dark ulterior motives, a mindless adoration of ideology, and the crassest politics you can imagine.
Yes indeed. I’ve got an article in the pipeline about the enemies of the Philippine State. Put China aside and we see that it is the Leftists and the Corrupt.
I have been so positive with PNOY government even with the rise of this DAP issues which should have not been at all. I don’t remember where did I posted it, was it here or with Raissa’s blog. The message was, all the negative reactions were just politically motivated to discredit the PNOY PRESIDENTIABLE or any of his party candidate. The only best successor to continue PNOY objectives are his party member or at least someone like Grace Poe.
Philippine politics is starting to reshape itself from worst to best Government operation without political objective after the election but mainly a smooth sailing for ALL DEVELOPMENT, that is how PNOY is doing it.
Slowly but surely, NINOY AQUINO and his WIFE wish for the country is now forming through their good SON PNOY, what is his name??? I bet some of you don’t remember but just PNOY, yes this man is so fair that I see the bright future of my grand children…
I wish, hope and pray that We The Filipino people will elect a president come 2016 who will continue what PNOY has started. And we will remain vigilant as citizens to make sure that things will improve for the majority.
If I were Filipino, with my battered, poverty-wracked, occupied, dictator destroyed fledgling democracy, I would be immensely proud of this good President, and optimistic for my nation. As an American who has chosen to live here, I am for sure impressed with Mr. Aquino’s principles and determination. If successors do half of what he has done, this nation will be just fine. The people complaining do it for a purpose, generally so they personally benefit. Not the nation.
You know, that is a very good point. I think the son stands for himself now.
The discussion on DAP’s being unconstitutional is now losing traction. A reading of most of the opinion columns will show this. Even a retired Chief Justice has weighed in on this on favor of the Executive. They are now targeting Abad, not the President. They want his head for really ambiguous reasons like “delicadeza” (loosely translated as “hiya” or shame). No facts worth discerning are being cited.
The Supreme Court did not rule on the grounds of the program’s constitutionality or unconstitutionality. Instead certain specific acts were cited as such. Basically, there appeared to be no case to to talk about; much less decide on. CJ Art Panganiban and a certain Franklin Tan (in his column) touched on this.
So we ask ourselves this: where is the media’s anger coming from? Who stands to benefit from all these?
Raissa’s article was like a wake up cold shower. That lady is something else indeed as you have observed.
You know what Joe, I sometimes feel you’re more Filipino than most of us.
More power.
vernon
No, not more Filipino, Vernon, although I greatly appreciate your intended compliment. We have the “old Philippines”, of power and favor and corruption, and the “new Philippines”, of laws and straight dealing, and I grew up in the new style, America, a place of national pride and allegiance and expectation that dealings will be honest and purposeful. And little patience for ethical violations, much less illegal ones. So I just bring those perspectives to bear, the perspectives of the “future Philippines” I hope. What I find sadly ironic is how the US is devolving into a place of deceit and partisanship and dysfunction, and so the values I write to are no longer being practiced there.
Congress appropriates the yearly budget for national projects.
The Executive is tasked to spend and implement.
The latter claims it was able to make some savings (a spectacular claim, in and of itself, given how most gov’t agencies are complaining of insufficient funds).
Now the Executive, in their good and generous hearts, gave something like 12 billion back to the legislators for them to spend as they please?
What is wrong with this script?
Well, I suppose what is wrong is that presidents here are given a great deal of power and have traditionally used it with considerable discretion. I think what happened is that the Aquino Administration, when in took office in 2010, curtailed a lot of spending because they did not trust where it was going. Until they knew the money was going to legitimate uses, they were not going to spend it. No one complained that this was a constitutional violation. Indeed, most agreed this was a prudent approach. So the money piled up, and, in the interest of ramping up the economy, and not wanting to go back to Congress to re-align expenditures, they started applying the funds to uses they did have confidence in, including legislative initiatives.
Power and favor are a part of this; it is the currency in which Philippine politics is played.
So what is wrong is that the Administration tried too hard to clean up the Philippines, tried too hard to do the right thing, and played politics the way it is played in the Philippines. They were not outright crooks, but the outright crooks screamed that they were, and so the matter was enlarged to the emotional heights people enjoy.
The big failing for me is that there has been no clear delineation of the DAP expenditures showing intended (budgeted) use and actual use. I will listen to the President’s speech with great interest.
I don’t have a problem with criticism of presidential discretion, just as I criticize FOI. Establish the case law that makes the rules clear and be transparent in expenditures. Good. I do have a problem with figuring out how to get the Philippines moving – forthrightly and honestly – without that executive discretion. And, the point of my commentary, I trust the Administration more than I trust the critics. So I’d say the best approach is to tone down the rhetoric and let’s see what the defense is.
Correction. I don’t criticize FOI, I criticize the President’s failure to back it.
Another afterthought. A challenge the Administration faces is showing that economic initiatives are “inclusive” of local areas. Putting in expressways in Manila does not do that. Disbursements via the House members to reach local communities doe give better local visibility to progress.
“Disbursements via the House members to reach local communities does give better local visibility to progress.”
That is assuming the House Member is honest and won’t be tempted to pocket half of the allotted amount.
Even so, I’m afraid that’s just perpetuating the politics of power and favor.
Right on both counts. But the other choice is to not spend the money locally and get criticized for non-inclusive growth benefiting Manila. So it tends to be a no win situation. The presumption is that Reps are honest, and if they are not, they will be hunted down. I think that’s how the thinking goes.
The best thing that this administration could have ever done to avoid criticisms from people who did not fully understood the DAP issue was to have been transparent about the expenditures up to the last peso.
The problem was, if not for the blabbermouth Estrada who told the whole nation of the portion of the money that went to the lawmakers, we will still be in the dark about where it really went. Why the secrecy if it was not meant to bribe those senators who voted against the former chief justice?
That’s why I think the Freedom of Information bill must not be enacted into law; rather, it should be the rule on any government expenditure so as to spare everyone from the negative fallout from suspicions and anger over something most of us, even the educated, did not have a full grasp of.
Yes, indeed. The best way to get rid of all the suspicions and accusations is to be forthright.
The administration has been very transparent in this DAP. Check out the DBM website and it is all there, including all the memo presented to the President with its marginal notes. There were projects presented and handwritten notes “more details needed”…. meaning that the President really went through each and every project thoroughly before approving. All these expenditures are in the DBM website. Only because we, the people, were not conscious about these things that we never tend to check on the budget. One blogger mentioned that these initiatives from the government never get the front pages because media do not think it sensational- so they are buried in the business pages.
As I understand it, what is wrong with DAP, per SC ruling, is that the Executive arrogated unto itself some sort of meta authority to disburse funds whilst the power of the purse rests solely in Congress.
Right. My brain goes catatonic as I read the legal arguments dealing with things like “good faith” (irrelevant), cross-boarder transfers (not allowed but there may be precedent), and what constitutes “savings”. Or how the Administrative Code and the Constitution are intertwined. These need to get sorted out before accusations are made, or good executives are forced to resign. And Executive needs to do a forthright accounting of DAP expenditures, and where savings were drawn from.
The Supreme Court ruled. The Administration will respond today. It’s a constructive dialogue, a part of the slow transformation of the Philippines from loose and corrupt to honest and productive. We ought not go “knee jerk” on the basis of shrill headlines or opinions from advocates with a vested interest in Mr. Aquino’s failure.
There are several ways in which the national gov’t could generate so-called inclusive growth if it wishes to without having to pay homage to local politicians because the President’s party has, I presume, majority control of Congress. It could just as easily enact legislation that will bolster spending on, among others, public education, health care, farm subsidies, and infra projects nationwide.
Giving money directly to representatives without proper accounting, monitoring, and auditing will just expose those projects to greater vulnerability to corruption.
In pork we do not trust.
I can’t argue with you, and have made the case before that it is not a legislator’s primary job to spend money, but to authorize a budget and write laws. Still, the method of power and favor is the culture that exists, and it is hard to break out of that without making even more enemies. Or, the other way around, hard to assure oneself of getting things done (like ousting a corrupt Chief Justice) without playing the game. I think PDAF became a gross abuse of discretion, but that discretionary authorities like DAP, clearly framed in laws that are simple and clear, is an important part of the executive function. A CEO is always given considerable latitude by the Board of Directors to get things done . . . until he fails.
President Aquino for sure is not failing. As a shareholder in the Philippine corporation, I don’t want him to step back and become passive and ineffective. This nation needs a good 15 year run of solid economic growth. Not “four and out”.
Abad is one of the good guys. And reading this piece along with Raissa’s you wonder why he is being lynched instead of those hoodlums in robes.
Yes, the problem seems not to be with constitutionality, which is debatable, but the Court’s finding of criminality ostensibly across the whole of the Aquino Administration that was engaged in building an economy. So we finally have a good, forthright, earnest government, and the Court determines that the laws say this is criminal. Maybe they ought not be lynched, but consigned to a loony asylum for shock therapy.
No, lynch them. They are not crazy they are cynical. Look at the big picture. Impeaching Aquino, preventing him from changing the political landscape, has been the aim of the opposition (from the reds to the loyalists of previous discredited presidents to binay) all along. Impeachment is not a numbers game, it is a money game. Now look at the SC decisions on PDAF and DAP. They take away the ability of the president to match the opposition’s cash. That’s why the concerted call for impeachment did not come until the president was completely disarmed by the SC. Thank you Supreme Court.
Checks and balances becomes seek and destroy. Amazing. They really do like riots in the street.
And the CBCP just called for a transition government. All because of condoms. Can you help me get a green card? 🙂
OMG. From meddling to nation building. I couldn’t even get my wife a tourist visa the first try, so I fear you are SOL.
Then I guess I have to start building an ark so I can sail before the bullshit dam breaks 🙂
Joe, who advised you to get your wife a tourist visa in the first place? That’s simply wrong. All US visa applicants are presumed to have intent to immigrate unless they can prove otherwise. Your wife, being the spouse of a US citizen, will almost find it impossible to convince the imigration officer of her intent to leave the US in a timely manner.
That was the correct visa to apply for. She was going for a one-month tour of the Western US. Any other visa would not have been correct. She was not going to immigrate. She was not going to work. She was not going for medical reasons or education. If the agent had bothered to look at her file the first visit, he would have seen that she is wedded to the Philippines. I live here permanently, she has a house and huge assets and a son in school here. I made that case to the visa section after her first denial, and they accepted her the second time. You are right. Immigration’s presumption is that a spouse is going to stay in the US. An insult, of course, to an honest American.
LOL! I never had any trouble getting my visa applications approved. Oh well, the ins and outs of the US visa system.
The situation is simple, just answer the question: “Who will be losing money and who will be gaining money?”
Once you get the answer, remember that no more pork with its 10% trickling down is felt today and the full effects of classrooms, better roads, better ratings… are for tomorrow; seeing today is easy, seeing tomorrow is not. Those losing money have access to the media, those gaining money have not. Most bastards are loud, most nice people are quiet. The logic of lawyers is mostly at the side were the money is. Etc.
It is not the EDUCATED that is remiss in their analysis of DAP. It is the “EDUCATED” Philippine Press from so-called “ivy-schools” that is remiss in their responsibility of reading, understanding and deeply analyzing the facts.
The Philippine Press pitting Filipinos against Filipinos.
That is so clearly proved by the pork and DAP headlines. Filipinos against Filipinos.
On the other hand…
Conventional wisdom has it that when Congress enacts a budget, money has to come from somewhere. Like, for example, tax revenue or by issuing gov’t bonds.
In Modern Monetary Theory, all that is superfluous.
A sovereign issuer of its own currency, like the Philippines, is not revenue constrained in order to spend.
Thus all this hullabaloo in budgetary process and the apparent friction between the Executive and Congress on who gets to spend how much on where can be traced to the old assumption, even by most members of Congress themselves, that they have to be mindful about the deficits and that there is not enough money to fund national projects. Philippine prosperity is hampered by this old untruth.
http://hir.harvard.edu/archives/2853
Visit Bill Mitchell blog here :
http://bilbo.economicoutlook.net/blog/
Or the New Economic Perspective here :
http://neweconomicperspectives.org/modern-monetary-theory-primer.html
Thanks for the links and for the continuing effort to educate us marketing guys on the way things REALLY work, outside of shallow impressions. 🙂
Here, in contrast, is President Aquino explaining DAP :
Micha–the distillate presented is that there is not a shortage of funds (thank you for the links, BTW) but a wanting in the ability to disburse them. Is my understanding incorrect?
“What if the Supreme Court is wrong, or remiss, or did a poor reading of the constitutional issues and historical precedents? (refer to Raissa Robles’ article).”
Well, there’s a reason why it’s called Supreme Court. Besides, it isn’t exactly just one person looking at issue. If it isn’t all that supreme, let’s just let Raissa Robles be CJ. Kidding, Uncle Joe. Kidding, Ms. Robles. With the SC ruling on DAP and PDAF, maybe Filipinos in the future will have less worries about politicians playing around with public funds. Is that so bad? I love the idea that a co-equal branch of government is actually functioning to balance out the power in government.
Anyway, I’ll let you people here try and enlighten this layman of a citizen. it just bugs me that this current administration is so high on its persona of infallibility. Can’t they think of a different scheme other than DAP? Just brush it off and come up with a new one, like NDAP (or Not DAP). If something is so critical, wouldn’t you put it in the budget? Besides, isn’t this administration known for the on-time passing of the budget? So, is the budget flawed or something that they needed to hack the system? If something is wrong with the system to begin with–that they had to expedite budget releases–can’t the majority do something “legal/constitutional” about it? I mean, the LP’s at the helm. They have the numbers, right?
Anyway, the projects funded by DAP are on this site: http://www.dbm.gov.ph/wp-content/uploads/DAP/DAP%20Projects.pdf, just paste it and check it out. Maybe we can have an idea on how these projects made an impact on our daily lives.
President Aquino will survive until 2016. If I’m to believe Cong.Tiangco, the UNA won’t touch impeachment. That’s also a big landmine for them. I think even Butch Abad will survive with all his hair, or whatever hair up there remains after this issue. Surely, the boss won’t like to be the only reflective surface in the cabinet meetings. Kidding, Mr. President.
Yes, checks and balances, and the 13-0 ruling was a strong check and Mr. Aquino did the balancing. I think DAP was a superb program. Not just good or ho hum. It corrected for the Arroyo mismanagement by curtailing money to wasteful or suspicious projects and moved it to projects that got the economy moving. It was a major step from corrupt practices to a real, honest economy. To characterize it along with PDAF as a corrupt practice is ludicrous, whcn it was really moving in exactly the opposite discretion. A president should be one step removed from a dictator, in my view, with considerable authority to make a difference. If the Supreme Court sticks with its dysfunctional ruling, then a Constitutional amendment is needed to align the law with needed discretionary powers. The “check” on the powerful president should be mandated CONSTITUTIONAL transparency. (I’m feeling opinionated today.)
Dysfunctional ruling or dysfunctional Constitution?
Indeed, what is wrong with juggling funds as long as these go right back to other legitimate projects? Imelda was charged with a case involving the transfer of funds from LRT to Philippine General Hospital. Her enemies wanted her to rot in jail for it! But I think she won that one. What was Marcos’ secret for finishing big ticket infra project so fast if not through fiscal dictatorship and liberal handling of funds aka fund juggling. But his enemies think too that was how he plundered the treasury. So when he was ousted from power, his foes in command, they designed a Constitution so control-oriented (as opposed to results-oriented), with a Presidency so weakened, discretionary powers largely clipped . Now you have a President feeling so powerless, staring at projects that are not moving an inch.
Still, why blame the interpreters instead of that one being interpreted. It’s the Constitution, stupid! (No, the last one is just a paraphrasing of an expression, not for you)
Right you are. I was pondering what one does when there are two “rights” making a “wrong”. Both the President and the Supreme Court are right, let’s say. But it is wrong to change or slow down the investments in economic well-being. Then, indeed, we simply change the law as fast as possible. So I retract my statement that the court ruling was dysfunctional, only that it did not point to a way to solve the problem and left the bag with the screaming cat in it with the President.
I am afraid that is not the job of the Supreme Court but his legal team. He cites that other Presidents had their own version of DAP. How did they do it without being caught in the same hole? He probably should consider consulting with better lawyers.
He cites the example of a good samaritan who parks in a no-parking zone to save a life. Well, he still pays for the ticket afterwards.
I don’t know how the argument before the court was handled. I know Secretary Abad was interviewed. I don’t know how skilled the Administration’s attorneys are, or what opportunity they had to present their case. It seems that the President believes his “basis” for transferring funds was not even considered by the court. Why not? I don’t know if that was a shortcoming in Administration’s presentation of the case, or a lack of due diligence by the court.
I hope the request for reconsideration is heeded and the judges apply their vast wisdom and experience to craft case law that would permit a way forward without constitutional revision, or collapse of economic growth.
Uncle Joe, if I heard Cong. Tiangco correctly the other day, one of the admin codes that the palace kept harping on wasn’t actually included in the original argument with the SC. The congressman pointed that out. So now, could that be basis for an appeal?
I think the focus in that direction is deserved, why was the Administration’s case not made, or made so weakly? I don’t understand the law well enough to know the basis for appeals, what would exclude them. The best position for the Administration to take is to start working directly with Congress to get changes in authorization that are critically needed endorsed. Work up a system for expedient budget modifications that go through Congress. DAP is likely done, history, cooked. I think the need for DAP – as a good way to adjust from the Arroyo irresponsible spending to the Administration’s spending – is done. So power ahead with new ways to make expedient and necessary changes. “Move on” is the mantra of the day . . .
Move on should have been the mantra from the day DAP got hit. I don’t know, the speech of the president the other day just came off as something for a need to be right.
Anyway, they should realize that the executive isn’t the only working part of the government. Honestly, it scares me to see a head function as if he is above the system. Last time that happened was in the ’70s.
We have different perspectives on that. The President is the CEO of a huge conglomerate, and he has been pushing to make improvements, reflected in the economy, rise in various ratings, and jailing of the corrupt. Here he is, pushing hard, taking a few liberties, working politics, investing, pushing his cabinet, doing things constructively in a way they have never been done before, and what happens? The Supreme Court marches in and says “you can’t do those good things”. Any confident, achieving person would get upset that he is being held back from doing what needs to be done. I FAVOR having a strong executive, but with better transparency than we’ve had in the past. Things don’t change unless you have that kind of driver. Mr. Aquino is no dictator, but he is an achiever. Contrary to the impression that many have that he is an awkward goof with no girl friend.
His TV speech was important to explain how DAP is oh so very different than PDAF and make the point that the Supreme Court ruling WILL hurt many people (like those living on the mudbanks who have to wait two years to get relocated).
“He cites that other Presidents had their own version of DAP. How did they do it without being caught in the same hole?”
@ricelander – It’s not his legal team that is at fault here. Previous Presidents tried to control everybody with the power of the purse and there was no way then that senators can be charged for plunder or malversation or graft. No whistle blower to tell the world about the riches and wealth of Napoles and so no Jinggoy Estrada to create an issue to divert the headline and attention away from his being in jail. He almost succeeded – with a a great help from his father’s treasurer then, Liling Briones & DBM Sec Diokno plus all the media & leftists and legalese hyperventilation.
Its so sad that because alot of ordinary people only wants to live in a day to day basis because of Poverty not minding the long-term effect of the reforms. They often choose the Wrong path as the saying goes “P500 o tuwid na daan?” Hopefully this DAP will lead the way in improving their Lives and way of Thinking in Life for a Better Future.
God Bless…
Its More Fun In The Philippines…
Thanks, Alex. I’m with you on all points. Today was fun battling another storm. 🙂 On generator power now, the generator being a post-Yolanda improvement.
Joe, sent you an email on a contributed piece. Pls acknowledge. Dont know how to do it directly on wordpress.
Got it Andrew. I’ll work on it tomorrow and find a slot for it ASAP. Thanks.
Thank you very much for the “enlightenment” — what a great piece — making things so clear.
All along, never in a moment did I doubt President Aquino & Secretary Abad, but somehow, felt that with all the accusations going on, coming from all sides, they will be “fall”. At last, we have you, very credible people, who truly love our country — SPOKE and clarified in detail, logically.
I knew in my heart that all these false accusations came from those, who are corrupt; ambitious, power hungry, self-serving. They have NO love for our country and people — only themselves and their own families, enriching themselves. Most of all, the POLITICIANS aiming to dethrone President Aquino. Who is the next in line, who will benefit? Who is the leading Presidential Candidate who will benefit? Knowing these answers, will lead to the leader who may be campaigning subtly for President Aquino’s downfall and increase his “approval rating”. Thank you.
Tess Alarcon.
Thank you, Tess. Many people here have their hearts in the right place, but the noise from those with vested interests in the President’s failure are loud and persistent. Aspiring presidents, crooks, leftists . . . they are good at propaganda whereas those who appreciate the President are quiet. The sensationalist press also hypes the negatives and relishes making up conflicts.
Joe, did the Aquino government appropriate and disburse funds not included in the budgets for the year 2011, 2012, 2013. The SC contends they did…Were the funds involved large enough to really directly influence economic growth in a Php 11 trillion economy?
One must remember that the funds involved were already budgeted for another purpose and were realigned. No new money was involved.
The issue is clear; in the present system, three equal but separate branches of government, Congress has the power over the purse over the executive. However if this is too cumbersome for many reasons, then why not switch to a unicameral parliamentary system.
Aquino and Abad could have simply filed a supplemental budget to cover items not included in the budget for the years involved.
It will be very interesting to see the results of the governments attempt to secure a reversal of the
SC decision.
Good questions. I think the source of the money is as important as where the funds were applied. The list of applications I saw reflected some pretty substantial spending, like school classrooms and local projects, unspecified. But the when and where of the project funding origination, I don’t know. I suspect they did move from year to year.
I don’t think a major realignment of government will occur over this. And I suspect you are on target, that HENCEFORTH supplemental budgets will be the way of the future . . . or amended budgets. It will mean delays and relying upon a very abysmal House to act expediently. But it is the pragmatic way forward. I also think the crucial need was to re-align Arroyo projects, and that has been done now. So the need is not as critical now as it was a couple of years ago.
Good questions. I think the source of the money is as important as where the funds were applied. The list of applications I saw reflected some pretty substantial spending, like school classrooms and local projects, unspecified. But the when and where of the project funding origination, I don’t know. I suspect they did move from year to year.
I don’t think a major realignment of government will occur over this. And I suspect you are on target, that HENCEFORTH supplemental budgets will be the way adjustments are handled . . . or amended budgets. It will mean delays and relying upon a very abysmal House to act expediently. But it is the pragmatic way forward. I also think the crucial need was to re-align Arroyo projects, and that has been done now. So the need is not as critical now as it was a couple of years ago.
I think the main point here is that the power of the purse emanates from Congress (fortunately or not). From this, we should be able to say a few other things: 1. Any money the government saves while implementing projects specifically spelled out in the appropriations act must revert back to the national treasury. The executive does not have the right to unilaterally realing these, even “in good faith.” The ends simply does not justify the means. After all, any and all money that is saved is the taxpayers’ money. They must, therefore, have first dibs on how it can be spent, (again fortunately or not) through their representatives. 2. This is also why pork barrel funds of any kind, particularly those once enjoyed by members of Congress, are also unconstitutional. The budget must specifically spell out line by line items that money is going to be spent on. Post-enactment appropriations should now be a thing of the past, as they are not subject to the same level of scrutiny and accountability, which we now all fully know is the source of corruption. 3. (And I will try to be really careful about this.) By the same token, the Judiciary Development Fund, which many interpret to be the judiciary’s form of the pork barrel, must also go first to the national treasury. After all, it is money raised by the judiciary through fees, which again come from the people. Having said that, we need to find a way to maintain the independence of the courts. Thus, the JDF must be kept separalely from other monies in the treasury. It may be released back to the courts only after submission of a full appropriations plan that spells out every single thing it will be spent on. If some of it goes to the judiciary’s employees as incentive for their “productivity,” have it spelled out. Then the Commission on Audit should be allowed to step in and independently review also expenses paid for by the JDF. Transparency is the key here. And transparency must apply EQUALLY among the CO-EQUAL branches of government.
I read an excellent commentary the other day (the author escapes me right now) that said the next step should be for the House to set up an operating budget function, much like DBM, to be responsive to budgetary requests coming from Executive. Develop the ability to act quickly. The House would merely authorize (or deny) shifts in money. It might get a little testy from time to time, but it would solve the constitutional and responsiveness issues.
It will be interesting to see how the Supreme Court responds to the issue “you did it too”. This is developing as a fascinating court case. Law professors are working overtime to digest it.
In any democracy, and in any budget, transparency and accountability is the most basic principle. DAP DOES not meet those principles. Dap hides and cannot make one accountable. Any lump sum wherein only one decides how to spend it is violative of the constitution. DAP is that. If he is a good president and good budget secretary, they should have pushed for FOI but no they would not, because everything will be seen and the straight path like the emperor’s clothes will be seen to be crooked after taking out the prism which was placed over the people’s eyes.
I agree with your criticism on the President’s failure to back FOI. A big, big mistake and running contrary to his statement that the people are his boss. His bosses are demanding information and he is refusing to deliver it.
But that is one decision among thousands, and I believe, overall, he is a very good leader for the nation. Not many could do what he has done, going against the tide of those disrupted by his anti-corruption initiatives.
I will also be writing next week about DAP as a GOOD tool. Not a bad one as most suspect. I think it will run Wednesday, so you might want to read that article and offer a rebuttal if you choose.
to blame the leftist and corrupt is labeling and is an argumentation ploy to evade the issue. You say there is no corruption? who were given the DAP money? PNoy’s men and women. For what end, election vote buying. The country never moved for the many because of the DAP money. Not a single cent was given for the progress of the many more poor. instead the poor increased during the DAP regime.
I am afraid we have the same information available, but are reading it differently. As for the country not moving, I’d simply cite the rise of the Philippines on all competitive and anti-corruption indexes, the World Bank’s recent commendation, improvement in debt ratings, Mindanao agreement, jailing of suspected plunderers, millions added to the conditional cash transfer program,and many other accomplishments. I would say you must be a very hard person to please or have in some way been hurt by the President’s initiatives.
Hi Joe,
I have a story about Butch Abad,
I interviewed Butch Abad way back in the late 80’s. It was for my college thesis at De La Salle University. My thesis was about a specific issue in Agrarian reform. Mr. Abad had just resigned as secretary for agrarian reform primarily because the landlord dominated congress’ commission on appointments kept on rejecting him. I interviewed him at the Ateneo at the office of the Institute of Church and Social Issues. After resigning, he setup an NGO which would help new farmer beneficiaries with services that the government can’t provide. During the interview, I was awe-struck, dumbfounded, and inspired. All these feelings came about as I could not believe there was such a brilliant and passionate man. His passion was in helping the Philippines in public service and his brilliance was in knowing the defects of the system and how to work within it and around it. Despite being rejected as a Cabinet Secretary, he was not dejected but found other ways to do public service. After the interview, he gave me much hope for this country because there were people like him around who want to serve the country.
Fast forward to 2010, he and Jesse Robredo were driving forces in my decision in supporting the campaign and Noynoy Aquino. These two people I really wanted to serve in government. I do not know for sure if Abad has the same values now but he has kept his integrity and reputation in tact (he kept a simple lifestyle, was never accused of corruption and the NGO community always respected him)…. until Napoles and DAP. Seeing him being interviewed on TV and reading the reports of his appearance in the senate, it is clear he still has those same values of thinking out of the box for the better of the country. It must have hurt him with so many calls for him to resign, some even coming from allies and from respected people. I was one of the few who believed he shouldn’t. After the dust has cleared from the Supreme court ruling and with the government’s motion of reconsideration filed, it is clear that there was ‘good faith’ and the results of DAP bend successful in helping our economic growth.
‘You can’t keep a good man down’.
Thanks for the wonderful first hand testimony, Adrian. It is rather the conclusion I formed listening to him testify, as well. Filipinos should prize professionals such as Secretary Abad and stop celebrating crooks.
I have not met Secretary Abad, but a friend, a long term English resident of the Philippines who is not easily impressed, met him some years ago on Batanes and was highly impressed, speaking of his exceptional competence and integrity. Good enough for me.
Yes, I think it is unfortunate that the popular media don’t go beyond shallow in characterizing a person.