Continuity, Not Just Planning: Why the Philippines Must Mainstream Multi-Year Financing
By Karl Garcia
The Philippines is not short of plans. It is short of continuity. Across administrations, the country produces development roadmaps, modernization programs, infrastructure pipelines, and reform frameworks that diagnose problems with clarity and ambition. Yet execution frequently lags behind intent. Projects stall, timelines stretch, costs escalate, and priorities shift with political cycles. The gap between vision and outcome is not primarily intellectual or technical—it is structural. At the center of this structural constraint lies a persistent tension between multi-year development needs and a budget system dominated by annual appropriations.
Modern state-building is inherently multi-year. Rail networks, flood control systems, ports, energy infrastructure, digital connectivity, defense modernization, and agricultural transformation cannot be meaningfully designed, procured, and delivered within twelve months. These investments unfold in phases, require long-term contracts, depend on stable funding flows, and demand uninterrupted implementation. But when such programs are squeezed into an annual budget framework, fragmentation becomes the default condition. Agencies must repeatedly seek reauthorization. Funding becomes vulnerable to political negotiation. Implementation is exposed to delays, reallocation, and shifting legislative priorities. Development becomes episodic rather than cumulative.
Annual budgeting serves legitimate functions. It reinforces legislative oversight, allows fiscal recalibration, and provides flexibility in response to economic shocks. However, when applied indiscriminately to all categories of expenditure—including long-horizon capital investments—it distorts incentives and weakens execution. Instead of optimizing for completion and long-term value, the system often optimizes for yearly survival: obligate funds before deadlines, renegotiate timelines, adjust scopes, and manage uncertainty rather than eliminate it.
Two Philippine policy arenas illustrate this continuity problem with particular clarity: defense modernization and agriculture-fisheries modernization.
Defense Modernization: Long Horizons, Interrupted Flows
The Armed Forces of the Philippines (AFP) modernization program was conceived as a phased, multi-decade effort to upgrade capabilities, professionalize forces, and align defense posture with evolving security realities. By design, modernization involves long procurement cycles, complex contracts, and sequenced acquisitions. Yet progress has repeatedly encountered friction from funding instability, delayed releases, and budget constraints. Even when modernization is legally authorized, the translation of program intent into predictable multi-year financing has proven uneven.
The consequences are operational as well as financial. Procurement timelines stretch when funding is uncertain. Suppliers price in risk. Capability upgrades occur slower than strategic needs demand. Multi-year projects compete annually with other priorities, creating bottlenecks that undermine planning certainty. The result is not merely slower modernization—it is a system in which strategic defense capability is tethered to short-term fiscal rhythms.
Agriculture and Fisheries: Reform Without Sustained Investment
The Agriculture and Fisheries Modernization Act (AFMA) envisioned structural transformation—mechanization, logistics improvement, research and extension, post-harvest systems, value chain upgrading. Yet decades later, modernization remains incomplete. While many factors contribute—governance, market structure, climate vulnerability—financing continuity is a critical variable. Agricultural modernization requires sustained capital investment, not sporadic yearly allocations vulnerable to budget compression or shifting priorities.
Farm-to-market roads, cold chains, irrigation systems, digital extension platforms, fisheries infrastructure—these demand multi-year commitment. Annual funding uncertainty fragments implementation, encourages piecemeal delivery, and weakens the long-term planning environment essential for structural transformation.
Procurement Law vs. Incentive Structure
Public discourse often attributes project delays and failures to procurement law or corruption alone. While governance risks are real, procurement frameworks such as RA 9184 are not inherently the core problem. The law provides robust rules governing bidding, evaluation, and contract award. Yet projects rarely fail at contract signing. They fail during implementation—where delays, change orders, weak monitoring, and misaligned incentives accumulate.
Annual budgeting exacerbates these weaknesses. Funding uncertainty can trigger rushed obligations near fiscal deadlines, encourage repeated renegotiations, and normalize “temporary” delays that become systemic. Contractors adjust behavior to risk structures. Agencies manage volatility instead of enforcing performance. A legally sound procurement system thus operates within a financially unstable environment, weakening outcomes.
Urban Development: The Visible Face of Discontinuity
The continuity problem is not confined to national programs. Urban development mirrors the same pattern. Public spaces, waterfront redevelopments, pedestrianization projects, traffic schemes, and environmental initiatives often fluctuate with political transitions. Projects launched with enthusiasm are redesigned, paused, or reversed by successors. The built environment becomes an archive of discontinuity. Investment loses predictability. Long-term urban transformation yields to short-term symbolism.
International Practice: Hybrid Budgeting as the Norm
Globally, few countries rely exclusively on annual budgeting for long-term investments. Instead, many employ hybrid systems:
- Medium-Term Expenditure Frameworks (MTEFs) to anchor multi-year fiscal planning
- Forward estimates to provide funding visibility beyond one year
- Multi-year appropriations for infrastructure and defense
- Expenditure ceilings to stabilize priorities across political cycles
Annual oversight remains intact, but it is grounded in credible medium-term commitments. Continuity is institutionalized, not improvised.
Why MYOA Matters
Multi-Year Obligational Authority (MYOA) directly addresses the structural mismatch between development timelines and budget cycles. MYOA allows agencies to commit funds for projects spanning several years, providing:
- Funding predictability for long-term contracts
- Stability in procurement and implementation
- Reduced exposure to annual political bargaining
- Improved planning certainty
- Better value for money through lower risk premiums
The Philippines already uses MYOA selectively. The policy question is not whether MYOA is viable—it is why it remains limited.
Safeguards and Design Principles
Mainstreaming MYOA must be accompanied by institutional discipline:
- Rigorous project evaluation before MYOA approval
- Transparent multi-year reporting
- Performance benchmarks and milestones
- Clear rules on variation orders and delays
- Debt and deficit management alignment
- Strong audit and monitoring mechanisms
Continuity must not weaken accountability; it must strengthen it.
From Control to Commitment
At its core, the debate over MYOA is philosophical as much as procedural. Annual budgeting maximizes short-term control. Multi-year financing prioritizes long-term commitment. Development, by nature, requires the latter. Infrastructure, modernization, and structural reform cannot thrive in a system optimized for yearly renegotiation.
Conclusion: Development Is a Continuum
The Philippines has demonstrated planning capacity. The challenge is to construct fiscal and institutional systems that allow plans to survive implementation realities and political transitions. Defense modernization, agricultural transformation, and urban development all reveal the costs of discontinuity. Multi-year challenges demand multi-year financing logic.
Development is cumulative. State capacity is built through sustained execution. National transformation cannot be credibly financed one budget year at a time.
Mainstreaming MYOA is not a technical adjustment—it is a structural correction. It is the recognition that continuity is not a luxury of governance. It is its foundation.
The Society of Honor by Joe America 
Arguably planning capacity is useless if the plan is not executed successfully and to completion. After all a plan assumes being able to get to the goal. If the plan failed, then it was a bad plan, because the plan was either flawed, chose bad executors, did not account for risk mitigation, or all the above. Multi-year planning requires budget discipline to go along with good planning and execution discipline. Budget discipline is something I’m yet to be convinced the Philippines as a whole has.
Most Filipinos I know don’t plan ahead more than a few days, mostly concerning what they will eat next, or what “want” they wish to buy, but don’t think much about what they “need.” Exercising self-restraint and self-discipline are requirements to deprive urges towards wants rather than prioritizing needs.
Planning does require identifying and sorting out the “needs” and “wants.” A need requires fulfilling as soon as possible. A want is not necessary, but a want could be had with judicious saving up once needs are fulfilled first.
If all fails in planning, could just do it the old-fashioned way and save up to pay the “cash price” all at once.
To add: planning capacity is useless is there is no political will behind it. Rephrased: planning capacity is useless if it only reaches up to level of bureaucrats and not to do the politicians making the big calls.
We have more than enough plans and quite a number of planning systems. Question now is—how do you get our political elite to credibly stick to them.
We might always desire removing politics from the equation, but the more you ignore politics—the more it comes back with a vengeance. Politics will always be there.
Which is plans need political constituencies. Backers. Coalition of interests aligned to support said plans.
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Japan’s industrial policy, competent bureaucracy and rapid industrialization were all the envy of the world. Yet, the plans coming out of institutions such as MITI—what you could call the “formal” aspect—was accompanied by an “informal” aspect: “Amakudari” or “descent from heaven,” whereby those same government bureaucrats who presided over industrial policy would retire in their 50s to take up posts in the private sector.
Did that lead to some corruption? Yes. But it also made sure that the public and private sectors were embedded in each other, in a manner that facilitated coordination between the government and private industry.
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What we need is something you can’t exactly legislate for or making formal rules for. What we need an “informal,” one might say “cultural” understanding among Filipino elites for appreciating long term planning.
Now, how to do that? Well, that’s a hard question…
that reminds me of how at times, German former politicians end up in supervisory boards of major corporations. The intense linkages between different sectors especially in postwar West Germany made some people call it “Deutschland AG”, meaning “Germany Inc.”. Japan could also be seen as Japan Inc. because for instance the heavy involvement of banks in corporations as co-owners is very similar to how German banks and industry are intertwined.
Joey has been mentioning that those countries that have had kingdoms or empires before colonization were able to get their act together better. I agree, that is a kind of muscle memory the Philippines still lacks. What I could add to my article below that I wrote after the Shogun series was finished is that after Tokugawa Ieyasu, Japan had developed a sense of “The Realm” as his fictional alter ego Toranaga calls it.
The idea, internalized not just in words, that what they are doing is for “Luzviminda” and not JUST for themselves. Maybe American anthropologist and popular science writer Jared Diamond is right that every ruling class is a form of kleptocracy. So is it let them have their cut as long as they deliver for everyone? Though Filipinos often are OK with corruption if THEY get their cut, even if it is just ayuda or vote-buying “fees”. So the answer isn’t that simple.
Even the Japanese period of total shogunate rule was relatively “short” (264 years) in comparison to how long unified Japanese monarchy has lasted (over 2,600 years). Shoguns existed for about half of the time of the Japanese monarchy, and while shoguns held a powerful position, shoguns did not usurp total control of Japan until the Tokugawa which coincided with a period of Japanese imperial weakness. So Japan had the “muscle memory” long before the Tokugawa of having an organized state; they just ran a relatively minor state that had pretensions of an imperial title.
Filipino elites may need to drop their own pretensions and come back to reality that the Philippines has never had any of these “muscle memory” benefits of a prior period of organized statehood. There is nothing wrong or shameful in admitting lacking. An acknowledge of very real truths is the first step in being able to move forward. In lieu of that admission, I suppose the Philippines will constantly be looking backwards while at the same time chasing superficial elements of modernity. What I find hard to understand (though I do understand it) is the Philippines in fact has a lot of advantages, perhaps more than most developing countries, in the large diaspora. The Filipino diaspora is perhaps the modern equivalent of ancient Austronesians who pushed off in balangays to explore unknown shores, risking their entire family and clan units to the deep oceans, and being able to adapt to new surroundings once they got there. Sadly it seems too few modern “explorers” want to bring their learnings back home, aside from using that superior knowledge to become “modern datus” over Filipinos who did not leave and know less.
Even in the most well run democracies corruption exists. Here’s something interesting to think about: the Gini coefficient which is a measure of statistical dispersion to represent wealth inequality, including the effects of corruption.
1.) 1960 Gini coefficient: 0.50
2.) 1986 Gini coefficient: 0.59
3.) 2025 Gini coefficient: 0.39
As a reference, the estimated Gini coefficient of France at the “let them eat cake” moment before the French Revolution was 0.59.
While the C’s may be quite comfortable, while the B’s might be rich, and while the A’s might be fabulously rich, the 93% DEs seem to have “more room to tolerate abuse” if one goes by the Gini coefficient as a measure. Filipinos are a relatively undemanding people, perhaps because most are not exposed to the idea that having what others have is possible in the first place. In order to change that future generations of Filipinos need to be exposed to that idea that they can indeed demand more material wellbeing for themselves, and not have to cope with getting angry over just the price of onions.
Oops, forgot to add in the year Marcos Sr. won the presidency in an upset over Macapagal:
1965 Gini coefficient: 0.53
I just read that a GINI coefficient of 0 means full equality and one of 1 means total inequality, so isn’t 0.39 an improvement towards 0.59 in 1986 and didn’t things indeed get worse during Marcos Sr.’s times? Because there is also the narrative that Marcos did more for the people while those after him (all “yellows” in the most extreme versions of propaganda) and that doesn’t seem quite true. But then again there is the larger % of DE now as opposed to 2000.
Since Francis is clearly reading and does follow Heydarian, I still recall how the latter provoked a lot of people by comparing the HDI (human development index) of Baguio (which is very high as it is clearly a rich town) which is similar to some places in Southern Europe with some places in Mindanao which have HDI similar to “Subsaharan Africa” which lead to a huge backlash but also Youtube videos singing of “Subsaharan Mindanao” and showing the sights.
Definitely the big picture of the Philippines across generations and across the archipelago seems uneven and sometimes elusive. There are on one hand islands like Amanpulo, the resort of the super rich, and not too far from it the island of Agutaya where VP Leni went and mentioned extreme stunting due to poverty.
So is my impression of even the poor being on the average taller than back in the 1970s due to the C class one sees more on videos than the DEs?
Finally an anecdote from Ateneo: a colleague of my mother there back in the 1970s mentioned travelling to Mexico and noted that there were many poor people there. My mother being German and direct said “just like here” and got a shocked look from her colleague. So many have/had blinders on in the PH.
Yes, a Gini coefficient of 0 means perfect economic equality (which is impossible, of course, as is perfect inequality). The Gini coefficient is the area marked “A” between the line of equality (a perfect system) and the Lorenz curve which is half of the relative mean absolute difference (univariate, or the statistical dispersion equal to the average absolute difference of two values in a probability distribution).
Here’s how the “two levels of income” (the richest of a population vs the poorest of a population) works.
The current Gini coefficient being lower now than in 1986 can be understood as the class of rich Filipinos is larger today than it was back then in 1986. But for the poorest Filipinos life didn’t change that much from Macapagal to Marcos Sr. to EDSA.
Today poor Filipinos probably have “more” to eat, but a lot of it is junk foods. Diabetes and high blood pressure isn’t too uncommon at a young age. My ex’s older brother had diabetic necrosis of his toes in his late 20s. Not sure how he’s doing now that he’s in his late 30s. There’s still a lot of “short” Filipinos, or maybe that’s just because I’m quite tall lol. It is commonly understood though that children should be given milk and vitamins, which does contribute to Filipinos becoming somewhat taller.
Your mother’s colleague was actually even more blind than your mother pointed out. Mexico stabilized post anti-Porfirista revolution and by the 1940s and had the “Mexican Miracle” from the 1940s to 1970s. Urban centers were well industrialized, so the poor Mexicans were from rural areas. Still, much better progress than the Philippines which never industrialized. Mexico today is rich enough that Mexicans don’t really want to migrate to the US anymore since about a decade ago. Today the Latin immigrants are from Central and northern South America. Ironically many of them migrate to Mexico for jobs, and the Mexicans are harsher on migrants than pre-Trump US.
She probably had an early form of what I from now on shall call Beltranism, defined as finding fault in other countries to cover up one’s own insecurities. Poor Cito Beltran but sorry not sorry hehehe.
Well elite Filipinos do live in a modern, first world “country” in their enclaves.
Out of interest I looked at the poverty rate of the Philippines, China, Malaysia, Indonesia and Vietnam. The poverty rate is another indicator of wealth disparity but leans towards fulfillment of material needs.
2025 % Population in Poverty:
https://data.worldbank.org/indicator/SI.POV.UMIC
• China: 22%
• Philippines: 59%
• Malaysia: 3%
• Indonesia: 68%
• Vietnam: 22%
2025 % Population in Extreme Poverty:
https://data.worldbank.org/indicator/SI.POV.DDAY
• China: 0%
• Philippines: 5.3%
• Malaysia: 0%
• Indonesia: 5.4%
• Vietnam: 1.6%
2025 % Population combined Poverty + Extreme Poverty:
• China: 22%
• Philippines: 64.3%
• Malaysia: 3%
• Indonesia: 73.4%
• Vietnam: 23.6%
modern in terms of amenities, not in terms of actual attitude. And they get shocked when this kind of stuff happens:
https://opinion.inquirer.net/24947/the-original-%E2%80%98hamog%E2%80%99-boys (this was back in 1996 BTW)
oh well, I remember how on Twitter some Filipinos reminded me Europe has bad slum areas too. I asked where and they mentioned some refugee camps.
And today some might regurgitate the MAGA propaganda about Europe being a living hell in decline, full of dangerous immigrants.
Interesting that Indonesia is still that poor. But then again Malaysia seems to be doing REALLY well.
Finally someone will always be behind you, so that is only consuelo de bobo, what matters is one’s own improvement.
If the Filipinos are content with the way things are there, I am fine. Maybe we here who are “close to Roman Empire downfall” should worry more.
I used to run into plenty of “batang hamog” in late 1990s and throughout 2000s Manila. I remember one wallet snatcher who worked in tandem with a pretty girl (like the Gypsies used to do), I twisted his wrist and he freaked out then ran away dropping his pocketknife. Fortunately batang hamog are not as much of a problem nowadays, and a Filipino is far more likely to suffer violence physical or sexual from someone they know.
One aspect of MAGA propaganda is that it only works on Americans who have little exposure to experiences outside of their own small bubble whether that be social or in many cases small town White America. Yet they are concerned about “bad things elsewhere” that even if true have little relation to their own lives. They just want to *feel* that things are going wrong *somewhere* so they can feel superior about themselves. Sometimes it seems that a lot of elite Filipinos also think this way, being overly concerned about distant things that don’t affect them while not dealing with things going wrong in front of them.
Indonesia isn’t nationally poor; Indonesia is the largest SEA economy due to its population. But that large population also has a lot of wealth disparity. A number of factors contributed to that, mostly in the internal conflicts and the East Timor occupation. The previous dictatorship also focused on consolidation and probably didn’t have the stability needed to industrialize faster.
There was a time when the Philippines delusionally thought itself as THE leader in the failed “Pan-Malayan” Maphilindo confederation, which once realized lasted one month. Both the Philippines and Indonesia had designs upon Malaysia whether in part (Sabah) or in whole (Indonesia wanted to absorb Malaysia). Malaysia probably has the last laugh of the Island SEA countries. Malaysia figured out a stable system of revolving federal constitutional monarchy based on their sultanates, didn’t think so full of self-importance so opened to FDI early in the 1970s, partnered with multinationals to learn then transfer technology, and as a result now has quite a well industrialized economy. An Indonesian friend once lamented to me “why didn’t the British colonize us instead of the Dutch?” While a long time Malaysian friend now employs mostly Filipino workers in her scuba diving business.
Most Filipinos seem perfectly content though with the way things are in the Philippines unless the corruption and prices of goods gets too out of hand. It doesn’t take much for politicians to wow most people there. Many Cebuanos still think Duterte built CCLEX. It’s the liberal, progressive that constantly clamors for change, based on something they envy from the West, yet I hardly see any organization building necessary to effectuate change. It is what it is… most Filipinos will go on with their lives and not think about it, because just like during the dictatorship, their lives didn’t change that much regardless or who is in power so they might as well get the ayuda and vote bribes they can upfront.
Thanks Francis!
Thaks guys, I have a lot lined up and if you do not like topic then off topic away.
Francis I’m sure you know this already but what you are describing here is generically termed a “revolving door.” The related “industrial complex” is a revolving door of former bureaucrats and politicians going into private industry. Revolving doors are a form of soft corruption.
The biggest danger of revolving doors is eventual regulatory capture which steers economic benefits, subsidies, and concessions towards the industry which has captured the regulators. Ironically regulatory capture already happens in the Philippines with the conglomerates having a virtual stranglehold on the Philippines economy that depends on foreign imports of cheap consumer goods while stymying the development of local industry that could replace imports in part or in whole.
Regulatory capture can be mitigated though by strong institutions, but that would require constant maintenance by civilian watchdogs.
In any case a bit of regulatory capture is unavoidable. The real question should be: How much corruption should be tolerated in the balance between received benefits and what is lost through some corruption?
Filipino elites should think in terms of “do the benefits outweigh the costs/risks?” In order words: True cost-benefit analysis.
After over 25 years visiting and observing the Philippines, I’m still unconvinced that internally developed elites are able to move outside of their risk-adverse nature. They are quite content with rent-seeking in a closed system makes control relatively easy. Most politicians hail from some form of dynasty, whether descended from literal datus or from “economic datus.” I think it would be quite hard to convince a majority of the DEs that are necessary to install better government unless their own understanding is “upgraded” and expanded so to speak. That would probably take a multi-generational effort that needs to instill new understanding into at least two generations to cement a large enough base. A hard question indeed with few current answers…
Historically, you had Marcos who moved up presenting himself as a champion against the “oligarchs” but created a new batch of “cronies”. Or if one looks at how Duterte removed ABS-CBNs franchise to give the broadcasting frequencies to SMNI which is connected to Quiboloy – or who remembers Dennis Uy’s “3rd telco”? Basically all who have criticized the rent-seeking system have only wanted their turn to rent-seek, I suspect even the PH Far Left wouldn’t be different.
Yes PNoy created the National Competition Commission which is a very progressive idea, but the little I gather about the Philippine Stock Exchange (for example) is that capital markets in the Philippines are far from being GENUINELY modern and transparent. The segurista nature of Philippine businesses goes so far that movie house owners drop movies that don’t sell well WITHIN DAYS – here they usually stick to a weekly cycle at least. And I guess the growth of fintech like GCash in the Phiippines is because the banks suck – just like the sudden boom in cellphones in the Philippines in 1990s was because land lines sucked – finally there always seems to be a comfortable equilibrium there, with occasional mavericks, but that is short-lived and a new comfy equilibrium replaces the old one.
The structural datu-ism probably runs deep. At least it seems so from my own observations. Outside of the good governance cities Philippines politics amount to coalitions of neo-datus which are too strong for good governance-style governing to overcome at the present moment. I’m not quite sure how to change that structure aside from a kind of neo-Thomasite push, this time from Filipinos themselves in conjunction with restricting the power of local political clans. But as those political clans have a stranglehold on their LGUs, that might be quite difficult. In any case the Philippine liberal expectation of going from A to Z in one go with “one good leader” is a point of early failure every time.
LCPL_X actually had a lot of insight into these base issues, even if I’d be annoyed when he tried to pull me into the story when I had no desire to be the main character.
There was a neoliberal (economics) assumption that by increasing trade and access to information, democratization would soon follow. It didn’t work in China, and I don’t think it would work in the Philippines either. This might be a case of “there is no substitute for hard work.”
Dyring Arroyo’s time, it took amost a year to debate on the budget only to reenact it if no deal was comleted. At that time the show Deal or no deal was famous in the US.
Pork was the weapon of choice of GMA and became a master of pork.
AFP zmodernozation and Agricitural and fosheries mpdernizatio were the victims of budget politics.