Monday, September 22, 2008

The budget sucks

Sen. Dominador Aytona, a former customs commis-sioner, finance secretary and briefly the Central Bank governor during the time of President Carlos P. Garcia (when the Philippine economy was Number Two in Asia after Japan), once remarked that "the budget is the economic program of government stated in pesos and centavos." The definition may sound like it was taken straight from an Economics 105 textbook, but that is precisely what the budget of the Republic is.

The process of making a budget is tedious. I shall not belabour our readers’ patience by using technical jargon, but in simple terms, it is like this: As early as the first quarter of the year, the different departments and line agencies of government (excepting GOCC’s whose budgets are not submitted to Congress) are asked to submit their proposals. These proposals are grouped in three accounts: Personal Services (salaries, wages and benefits including the 13th month pay), Maintenance and Operating Expenses (MOOE), and Capital Outlays (for equipment purchase, building construction, etc.). In the case of infrastructure agencies like the DPWH and DOTC, a list of projects that require either one-time funding or continuing appropriations is included.

These proposals are submitted to the Department of Budget and Management, which then forms technical working committees for each agency to reconcile differences between the macro-economic spending limits set by NEDA and the economic team, based on income projections of DOF and the economic policies and goals of government.

See why Senator Aytona defines the budget as the "economic program"?

Eventually the "final" draft is presented to the President, who in the case of Doña Gloria the economist is perused personally. In the case of Erap the artista, whatever Ben Diokno of DBM and Philip Medalla of NEDA, with the nodding approval of Titoy Pardo of DOF presented, went. Which is not necessarily bad, because the three gentlemen are not crooks.

Doña Gloria herself "inserts" or "re-aligns" for reasons more political than economic, but that is a long, long story, the truth behind which will probably come out only when she is no longer La Presidenta.

The result is the National Expenditure Program (NEP) which, along with the prepared enumeration of sources of funding, is presented to the House of Representatives, and is usually called "The President’s Budget." The House Committee on Appropriations with its myriad sub-committees (of which practically all congressmen are members since Joe de Venecia invented the "win-win" solution to all problems, otherwise called the practice of "happy-happy", or pleasing everybody) then deliberates on the budgetary proposal. This is the time for congressmen to show "may alam sila" or for the wise and wizened to corner the secretaries of departments with resources and push for their "pet" projects. Insertion na naman.

After the usual moro-moro, the Committee consolidates its House Bill, and brings it to the plenary for approval. Maghahabol na naman ang ilan. "Yung dagdag ko, ‘yung dagdag ko!" For the lazy and the hindi wa-is, hanggang siguruhin lang ang pork barrel nila, otherwise known as the CDF, now PDAF. Hating kapatid lang ang nalalaman. For the wise and the hawk-eyed, malaki pa ang singit.

Approved, it goes to the Senate. Hearings na naman. Singitan na naman. At the end of the tortuous road, it goes to the floor for amendments. This is where guys like Ping Lacson and Mar Roxas propose direct amendments on the floor, as when Lacson removed 20 million from the Office of the President and transferred it to the Department of Science and Technology. Hindi singit, kundi lantad. As Vince Lazatin of the Transparency and Accountability Network would say, "open and transparent".

After the Senate version is approved on third and final reading, there is another hitch. Both houses have to reconcile their two versions. Enter the "dragon." Not the dragon that says "Pag bad ka, lagot ka!", but the Bicameral Conference Committee, the powerful "third chamber." By this time, the clock is ticking fast and furious. Malapit na ang adjournment ng Kongreso. Photo-finish time na. While the bicam has about a dozen or so members from both houses, it’s really just between the chairs of the Committee on Finance in the Senate and the Committee on Appropriations of the House where the "negotiations" are pursued. The last-minute singit. But in the House, there is a "speaker’s eye", usually the majority floor leader, to make sure "everybody is happy" and the minority floor leader, if he is someone like Ronaldo Zamora of San Juan, who always "takes care" of his boys, and is no push-over with his sharp intellect and long experience. Hindi kayang isahan. Of course, there are the patient, overworked (half of the year lang naman) technical staff of both houses, who have to pander to the requests, now popularly known as "singit", or "congressional insertions" in well, more elegant language.

In actual practice, a few men make the final decisions. The only caveat which the law provides is: You cannot appropriate more than what Malacañang submitted. You can juggle, also called "re-align", and you can make singit (with the concurrence of Malacañang’s DBM boy), but you cannot exceed.

Now let’s look at how Prof. Ben Diokno (he advised Sen. Ninoy Aquino on the budget, became budget undersecretary under Cory, and was Erap’s budget secretary) reads the double 200 million insertion:

"At what point in the budget authorization phase was the first project inserted? It could have been done during the preparation of the General Appropriations Bill (GAB) by the House, or during the preparation of amendments of the Senate to the GAB, or during the bicameral conference committee. Based on available information, the first project was not in the GAB nor was it in the Senate proposed amendments to the GAB. The logical conclusion is that it was introduced during the bicameral conference committee meeting.

"Political analysts call this committee the "Third Chamber." It operates under extremely secretive conditions. (No recorded minutes, much like a meeting of Mafiosi dons).

"The first plausible explanation is that the new project was approved by the Third Chamber and incorporated in the bicameral conference committee report. But only the two chairpersons of the two chambers of Congress can certify that indeed the controversial item was taken up and approved in the Third Chamber’s sessions. The second explanation is unlikely but possible. If there was no agreement to include the new budget item, then it might have been inserted during the printing of the General Appropriations Act (GAA), which would be a criminal and punishable act. (This is what Lacson suspected when he grilled Rolando Andaya Jr., except that the guy threw the ball back to the senators by saying that this was a "congressional insertion.")

So that rules out the "criminal" act of "printing" magic. Has this happened before? The brother of a former senator who is now a cabinet member said that when another senator was yet the chair of the Finance Committee, and the current DBM secretary was yet the House Appropriations chair, some last-minute "singit" was rushed, but that is his allegation, not mine. Now back to Ben Diokno:

"Executive officials have conflicting statements on the alleged double appropriation. Public Works officials argued that the road project has two parts, including a flyover infrastructure, which required the additional P200 million. By contrast, Budget Secretary Rolando Andaya Jr. acknowledged the double funding, stated that the other budget item was a congressional initiative, and then assured the doubting public that no funds will be released for the second appropriation.

"Andaya’s explanation gives rise to another question: If the funding for the inserted budget is a redundancy, and will not be released, why didn’t the President veto it? Since the new budget item was not expressly vetoed, it continues to form part of new authorized appropriations for 2008, which may be released between now and December 2009 (just in time for the May 2010 elections). Or the appropriations for the new budget item may be declared "savings" and used to augment other items in the 2008 budget (including the first project). In effect, through some convoluted way, the funding for the project will be raised to P400 million or higher.

"Some cynics can’t resist raising the question: Was the redundancy (or redundancies) in appropriations an oversight or was it intentional? Remember that any redundant appropriation may be declared as "savings" and later used to increase (or augment) the appropriations of other items in the 2008 budgets – including the lump-sum appropriations. By augmenting lump-sum appropriations, the President would then be able to use "savings" to finance projects that have yet to be identified."

So why should the Senate get to the bottom of this? Naisahan ba sila, o sa pag-singit nila, iisahan sila ni Dona Gloria and her favourite Nonoy? O inisahan ang taongbayan ng kasamahan nila?

In any case, see how the process of passing the budget, from preparation to deliberation, from insertion to approval, and even to printing, can be so debauched by men and women with sinister intentions. Kaya nga ba’t Ms. Korina Sanchez coined the phrase, "Singit at Taga".

Now listen to Miriam Defensor Santiago, in her privilege speech last Wednesday: "That is the raison d’être or the very reason why I have filed that resolution to have an independent group review the entire 2008 budgetary process. This will depend on the subjective judgment of every senator."

Santiago feels that Lacson’s tirades should not be considered as an attack on the entire Senate. "For me, it is not offensive for the Senate as a whole; it is an act of self-cleansing on the part of the Senate before someone else does it for us. It was an attack on the budget process and its ultimate secrecy," she said.

Saying it is unconstitutional for Congress to keep secret the budget process, she added it also leads to abuse of authority by committee members during the bicameral conference. "With the budget, the bicam not only reconciles the differences between the House and the Senate versions. Under the most secretive conditions, the conference introduces budget items that did not exist in any version," she said.

"No new projects should any longer be introduced during the process of budget reconciliation," Miriam suggests. "Even I, a senator no less, was refused by the Legislative Budget Review and Monitoring Office (LBRMO under Yolanda Doblon) when I asked for a list yesterday," the senator says. Why the veil of secrecy? Ano ang itinatago?

See now how the budget sucks? As in how government sucks our blood, sweat and tears by taxes here and taxes there, and gives us in return, over-priced projects, sub-standard projects, miserable service, and collusion between the legislature we elected, which is supposed to provide checks and balances, and the executive we did not even elect?

As I ended last time, it is time to revolt.