At the last symposium on Good Governance, held again at Christ the King Mission Seminary, Leonor (Liling) Magtolis Briones shed light on corruption’s dark centers.
Briones
Not one napped or even tended to, despite the siesta hour. Some 250 religious and lay leaders were all ears, not wanting to miss a word. The speaker was the former Treasurer of the Philippines, now U.P. Professor Emerita of Public Administration and the leader of Social Watch Philippines. Grandmotherly and strong-voiced, Liling Briones exuded the wisdom and courage that have characterized her stint in government and academia the past so many years.
She had earlier been known for her perspicacious understanding of the Philippine problem of corruption. Ours is a country where corruption is so rampant that everyone is an expert on it; everyone knows, or think they do, what it is precisely, and how to solve it. All Philippine presidents, in fact, not just the incumbent, have won on anticorruption platforms.
Even the international donor-community took pity on the Philippines over this long-lingering illness and poured in hundreds of millions of dollars in anti-corruption strategies. After decades of anticorruption efforts, however, there are no signs that it has abated. The signs are that it only got worse and worse. Did they make a wrong diagnosis of the sickness? Did anti-corruption foreign aid moneys also become a source of corruption?
After hearing Professor Liling Briones, many people admit that they really did not know the precise nature of corruption in the Philippines today.
For starters, Liling likes to point out corruption’s multidimensional character: its being market- centered, public office-centered and public interest-centered.
From technorati.com
The market-centered type is the most prevalent, and is so commonplace that all too often people, with very few exceptions, don’t realize that they themselves are engaged in it in many ways. Services that are usually given for free, when urgently needed but scarce, can be obtained by paying for them. The greater the demand and the lesser the supply, the higher the price will be. This is especially true of medical services, enrolment in public schools, rooms in hospitals, licenses, clearances and so on.
Liling calls this Philippine variant the “Divisoria model,” after the largest market in the country, where goods ranging from the smallest button to food, groceries, clothing materials, gift items, animals and the largest machines – everything – can be negotiated and bargained for.
The Philippine public-administration system is “like a huge Divisoria where public goods are bought and sold—from food to drugs, medical and hospital services, court decisions, licenses, clearances, admission to public schools, free housing, multibillion-peso infrastructure and, quite lately, election returns as well.”
Public goods and services turn into commodities for sale whenever the effective demand is higher than the available supply. “In the Divisoria model, corruption is enhanced because of the drive to negotiate for lesser costs, lower penalties, bigger shares, more favours and more power. Thus, the universal market-driven model is exacerbated by the Pinoy bargain-driven culture.”
Understanding the essence of this type of corruption can lead to the correct solutions. You don’t really need sophisticated models, huge multimillion-dollar anticorruption projects and special programs. “Since supply of public goods and services is the obvious problem, increased economy, efficiency and effectiveness in the delivery of more services is the clear response.”
What you need, then, are more schools, buildings, teachers, textbooks, health clinics and medicines, police protection, etc. “If the supply of public goods is sufficient, the public need not pay bribes and tips. Agencies that deliver their services in a fast and efficient manner tend to have lower levels of corruption. Yes, corruption can be reduced!”
But wait, the nature of Philippine corruption being so multi-dimensional, one must not forget the other features of this phenomenon. Can you, for instance, increase the supply of public goods and services by merely giving more money to your legislators who are not in our system legally responsible for these jobs?
Aside from its illegality (per latest Supreme Court decision), the obvious experience now is that more pork has only led to less delivery. More pork has meant higher costs of channelling moneys to agencies, and legislators collecting increasing amounts of commissions and rents until the very guardian of public moneys, the Commission on Audit, itself became part of the dematerialization into ghosts of moneys originally intended to increase the supply end of public goods and services.
In sum, a corrupt way of fighting corruption has only bred more corruption – even with a supposedly clean President at the helm. That’s the real meaning of Napoles.
And here’s where the lady Liling insists: “Be not only concerned with the Pork. You must also ask, ‘Where’s the Beef?’”
To find where it is, one must spend time in the jungle of the 2014 National Budget.
Let Liling be your guide.
Firstly, what is a budget for? The Philippines is facing many challenges, the most serious of which are poverty, climate change, health and education, and unemployment. The budget is the most powerful instrument of the government in responding to these problems. It can be an instrument for the redistribution of income groups to fund services and create jobs for the poor. It can be used to provide education and health services, as well as training and capacity building and fund projects to create employment. It can be used to stabilize the economy and control inflation.
Isn’t the national economy doing very well these days? Indeed it is if we look at its growth rates.
PARAMETERS 2012 Actual 2013Adjusted 2014Projected
Real GNI Growth % 6.5 5.9 – 6.9 6.2-7.2
Real GDP Growth % 6.8 6.0 – 7.0 6.5 – 7.5
Inflation % 3.2 3.0 – 5.0 3.0 – 5.0
364-Day T-bill Rate % 2.0 1.0 – 3.0 2.0 – 4.0
FOREX (P/US $) 42.25 41.0 – 43.0 46.1.0 – 43.0
Unemployment Rate % 7.0 6.8 6.7
(Source: DBM BESF based on BSP, NEDA, NSCB data)
But then, too, maybe it is not, despite such impressive figures, if one looks at the social development situation.
SWS: On average, 5 out of 10 Filipinos consider themselves as poor (Q2 2013)
NSCB: 2 out of 10 (22%) Filipino families are poor (NSCB Refined Poverty, 2012)
From 2006 to 2012 the poverty situation has remained practically unchanged. The number of Filipinos suffering from hunger is on the rise, despite robust growth. Unemployment and joblessness, especially among youth and women, hardly improves. Income inequality persists. The growth benefits only very few, all rhetoric of the government to the contrary notwithstanding.
Can the budget really be of help? How big is the National Expenditure Program – the national budget – for 2014? How well targeted are the sectors that have to be lifted from poverty? How detailed are the outlays in black and white? Aren’t there still lump sum one-liners that give so much power to so few without transparency, and as little accountability?
The National Expenditure Program (NEP) comes up, believe it or not! to a total of P 2.268 trillion, yes – two trillion two hundred sixty eight billion pesos (P2,268,000,000,000.00) composed of the following:
New General Appropriations: P 1,611,874,584,000;
Automatic Appropriations: P 796,029,175,000;
Total Available Appropriations: P 2,407,903,759,000;
Less: Unprogrammed Funds: P 139,903,759,000;
Equals =
Total Expenditure Program: P 2,268,000.000,000.
For clarification, the Automatic Appropriations are:
Interest payments for debt service: P 352.7 billion (yes, indeed, this big)
Net lending: P 24.9 billion
Internal revenue allotment: P 341.5 billion (the famous IRA for LGUs)
Employees’ retirement and life insurance premiums: P 28.9 billion
Special accounts in the general fund: P 21.1 billion
The NEP (National Expenditure Program) further clarifies that the New General Appropriations is composed of P 1,161,922,924 in department and agency budgets (DA, DND, DAR, DEPED, etc. etc.) plus Special Purpose Funds of P 449,951,660.
In turn, the Special Purpose Funds is composed of Programmed Funds of P 310, 047,901 and Unprogrammed Funds of P 139,903,759. Thus, NEP states that the New General Appropriations is P 1.612 trillion as shown above, and it includes Unprogrammed Funds of P 139.9 billion.
“Please note,” Liling’s voice is almost a shout, “that the difference of P 139.9 billion in Unprogrammed Funds is very material.” Remember that the PNoy-hated past administration availed of Unprogrammed Funds when the special purpose funds were not sufficient. Here we encounter not mere pork but real beef. And it is there in the 2014 budget.
IN SUMMARY, said the lady: out of the total expenditure of Php 2.268 trillion, only the budgets of the departments and agencies have details which could be examined lengthily by Congress, totalling P 1.162 trillion.
The balance composed of special purpose funds of P 310.047 billion (programmed) and P796.02 billion or a total of P 1.106 trillion are mostly lump sum amounts that could not possibly go through the same rigorous examination as the departments and agencies. Unprogrammed funds of P 139.9 billion were not included. This explains, said Liling, why the current budget is “vulnerable.”
That word, “vulnerable” made a member of the press quite mad one time. During the press briefing by Liling for the proposed 2013 budget, one member of the press angrily demanded, “Why don’t you say outright that the President is corrupt”? She answered as patiently as she could that at that time the 2013 budget was not even appropriated; so how could she make any claims of corruption. But as a Public Administration teacher, she could talk of “vulnerabilities” on the basis of the draft proposals.
Another source of vulnerability is the fact that because the Constitution allows the President to transfer funds in “the office of the President,” the term “office of the President” is now being interpreted to mean the entire national government system, and not just the office of the President. To repeat: this is no mere pork; it is real beef. Pork or the Priority Development Assistance Funds is “a mere P 25.240 billion in the Special Purpose Funds.”
Is the DAP (beef “Distribution Accelerated Program) legal and constitutional? The Constitutionalist Father Bernas says: it all depends on the answer to factual questions: Did the President transfer “savings” and where did he put them?
Even in the time of Marcos, during constitutional authoritarianism, the transfer of funds topic was already so controversial and hated. The Supreme Court, interpreting the 1973 Constitution, decided against PD 1177 that liberally gave Marcos the right to transfer funds. The paragraph given us by Reggie Francisco, student of Bernas, reads:
“‘For the love of money is the root of all evil: …’ and money belonging to no one in particular, i.e. public funds provide an even greater temptation for misappropriation and embezzlement. This, evidently, was foremost in the minds of the framers of the constitution in meticulously prescribing the rules regarding the appropriation and disposition of public funds as embodied in Sections 16 and 18 of Article VIII of the 1973 Constitution.
“Hence,the conditions on the release of money from the treasury [Sec. 18(1)]; the restrictions on the use of public funds for public purpose [Sec. 18(2)]; the prohibition to transfer an appropriation for an item to another [See. 16(5) and the requirement of specifications [Sec. 16(2)], among others, were all safeguards designed to forestall abuses in the expenditure of public funds. Paragraph 1 of Section 44 puts all these safeguards to naught.
“For, as correctly observed by petitioners, in view of the unlimited authority [sought to be] bestowed upon the President, ‘… Pres. Decree No. 1177 opens the floodgates for the enactment of unfunded appropriations, results in uncontrolled executive expenditures, diffuses accountability for budgetary performance and entrenches the pork barrel system as the ruling party may well expand public money not on the basis of development priorities but on political and personal expediency.’ The contention of public respondents that paragraph 1 of Section 44 of P.D. 1177 was enacted pursuant to Section 16(5) of Article VIII of the 1973 Constitution must perforce fall flat on its face.” [Emphases supplied by the Gardener]
Below in the last two columns of the graph please note the huge amounts that constitute grave moral “vulnerability;” that “provide an even greater temptation for misappropriation and embezzlement;” that can open the floodgates for the enactment of unfunded appropriations, result in uncontrolled executive expenditures, diffuse accountability for budgetary performance and entrench the pork barrel system as the ruling party may well increase public appropriations not on the basis of development priorities but on political and personal expediency.
Sometime back Liling had occasion to warn the nation in her article of March 27, 2011 that was published by the Business Mirror regarding a “vulnerability” turning into actual corruption:
“After months of contentious debates avidly reported by the media and monitored by the public, Congress finally decided to impeach Ombudsman Merceditas Gutierrez with a resounding 212 ‘yes’ votes as against 46 ‘no’ votes and four ‘abstentions.’… The curious are asking: How did the ‘sure votes’ harvested after months of haggling and negotiations balloon from 120 on Monday morning (March 21) to a stunning 212 by Tuesday dawn in less than 12 hours?
Did 92 congressmen suddenly see the light like St. Paul on the road to Damascus? Were our ‘heroic’ congressmen sincerely convinced that Gutierrez deserved to be impeached? Did they believe in their heart of hearts that the Gutierrez impeachment is the first step to genuine reform of our political system, and the healing of institutions devastated by corrupt governance? Are the Filipino people finally blessed with representatives who vote on the basis of their conscience and the commitment to do what is right?…
“The impeach votes: How much?
“I did my own interviews,” wrote Liling. “Threats and promises worked. I believe, however, that the release of several rounds of checks on Monday and Tuesday of the impeachment day did the trick. My informants say that on Monday, those who voted for impeachment received checks chargeable to Fund 101. Some received from two to five checks. These were purportedly for ‘district needs.’ These checks were immediately cashed at the Land Bank branch right in Congress and were, therefore, as good as cash.
“On Tuesday pabaon was distributed to select congressmen with amounts purportedly reaching as high as P700,000. These were purportedly charged to Pagcor and so-called savings from travel.
“It is said that where there is smoke, there is a conflagration somewhere. I humbly suggest to the Commission on Audit to check the volume of checks disbursed and cashed on that fateful heroic day when the country applauded the statesmanship of our congressmen.
“It can be said that this is part of political reality. When the administration, in the name of good governance, does what the former administration used to do, it is making itself more and more vulnerable.” [Her famous word.]
More Recently
The proverbial toothpaste is out of the tube. Now it’s the senators themselves who are talking about facts that they can in no way interpret or admit as bribery – what then, incentives? Yes, maybe, but surely not bribery.
Look at the following which recently appeared in the Manila Times (with apologies to RTiglao):
Senator Claro M. Recto in the 1950s said to Senator Pacita Madrigal Warns: “But, of course, the rich do not steal; they pilfer.”
In the same manner, today’s honourable senators do not take bribes from the dispenser of beef and pork; they merely receive incentives to do the noble work they have to do. Surely the noble ends of impeaching key appointees of the past evil administration justify the corrupt means required to be effective at all? And Professor Briones contends that it all starts with a cloudy budget carrying so many “vulnerabilities.”
In fairness to the Commission on Audit, however, Liling says: “In 2009, the Commission on Audit issued a report on Special Purpose Funds, pointing out abuses related to the utilization of these funds. In its 2010 Audit Report, COA advised DBM to ‘refrain from transferring funds from one lump-sum/special purpose fund (SPF) to another, or utilizing the appropriation of one Fund for purposes of another Fund, otherwise the intentions of the appropriation law will be circumvented.’ “
Because of their vulnerability, the Department of Budget and Management is required to report quarterly to the House Committee on Appropriation and the Senate Committee on Finance, regarding releases from the Special Purpose Funds, Supplemental Appropriations, Continuing Appropriations, and Automatic Appropriations. “Last year,” said Liling, “we inquired from the House Committee on Appropriations if this requirement was fulfilled. We received a negative answer.” Well, then, wail.
Now, says Liling, “there is talk of good pork and bad pork. It does not change the fact that it distorts and blurs the constitutional definition of what the role of the legislator is and what the role of the executive is. Every child knows that the function of the legislature is to enact laws, the most important of which is the national budget, even as the function of the executive is to implement the law, while the judiciary settles legal disputes between the two.”
And she knows that Pork addicts are wailing, “What will happen to congressmen and senators if their pork is withdrawn? All of them have budgets for their salaries and those for their staff, travel, district offices, and consultants–the whole lot.”
Well, says Liling, “they have their perks for committee chairmanships and their usual bonuses. Their offices will not collapse. They will not be beholden to the executive if pork is abolished. They can examine the executive’s budget proposal without being seduced by pork. They will not be besieged by contractors, suppliers, and other assorted hangers-on.”
Art work done by Guigit Avila (MIRIAM AVILA GUNDRED)
The Napoles initial investigations and other cases which are surfacing are now clearly showing that these scams could not have happened without the participation of the executive. It always takes two to tango. “I believe,” Liling concludes, “that considering the fact that pork is mutually ‘beneficial’ to the executive and the legislature, they will not abolish it of their own volition. It will take the combined outrage and anger of media, civil society, the various religious faiths, educational institutions, and the ordinary citizens to push these two branches of government into doing the right thing.”-30-