The ‘realities’ of national budgeting

Zoilo ‘Bingo’ Dejaresco IIIContinuation

WHEN does the government incur legitimate savings? When a fraud is discovered and the government stops a project, as in the alleged Laguna Lake silting scam, billions are saved. There is a clear savings when the budget ceiling for an infrastructure project is met by a competitive bid.  There is a clear savings when the land where the project is later discovered to have sinkholes, and the project is halted.

When the government positions occupation targeted for by June are not filled, there are savings in the personal services sector of the budget. When debts are paid and the assumed interest rate is higher and the exchange rates worse than the actual (for foreign loans) then, there is cost of money and foreign-exchange savings. Do we wait for the year to end before we use them?

Third, lump sums, or nonitemized funding, may be inherently bad, but, sometimes, there is no choice. When does lump sum become a necessity—a project funding made available but without the specifics?

There are calamity funds and the Department of Social Welfare and Development has a budget for relief goods, since no one can predict the calamity’s occurrence as to time, location, magnitude and kind of relief needed. The Department of Health has emergency funds for new medicines or for the purchase of quarantine areas against the Ebola that no one anticipated, for instance.

The  Department of Education’s budget for classrooms is ostensibly dictated by actual demand of the student population that is determined by migration patterns, student attendance and, therefore, the location and size of classrooms and supplies are elastic to demand.

Agricultural funding for the distributions of seeds and fries and the like often take paths, where they are most needed, paths that can be altered by climate conditions, like typhoons and drought. Forecasting equipment of the Philippine Atmospheric Geophysical Astronomical Services Administration, or Pag-asa, can be damaged or destroyed by forces of nature (like the Doppler radars stations in Guiuan, Eastern Samar and Mactan, Cebu). Can anyone tell things in advance for certain? 

Finally, “unprogrammed funds” are those allotted, but their release are  dependent on the availability of funding (whether the target amount of taxes collected for the quarter, for instance, or the foreign counterpart funding realized) they are per-force lump sum.

Of course, human malice exists since Eve gave the apple to Adam and “ghost projects” can be programmed and then canceled, projects programmed to fail or be abandoned and foreign exchange and interest rates used in the budgeting skewed to a desired, but not logical, direction at budget time.

But that is the evil of human nature and not of the budget process. One can never legislate human behavior.

There are, of course, many doubting Thomases, who honestly think the legislators’ budget intervention, crossing savings from agency to agency within the department and lump sums are anathema to good governance, are partisan and are self-serving.

But two methods of control have been suggested. 

One, by Senate President protempore Ralph Recto, in a bill filed on November 18 requiring that public projects be posted in the web site of the agency concerned or with the Department of Budget and Management (DBM). For instance, a running tally of projects already completed or whether the list of teachers programmed for hiring is already in the manpower plantilla

The other is that even if categorized as  lump sum, a project cannot still be released by the DBM without such being itemized. Thus, it becomes de facto, a line item, not a lump sum upon implementation.

It is easy enough to criticize government and assign malice where there is none.  One can get criticized even when armed with the best of intentions. It makes one wonder why men still aspire for a government position.

In fairness, let us understand that budget laws were made for men and not the other way around. Many times, reality bites.

Bingo Dejaresco, a former banker, is a financial consultant, media practitioner and a political strategist. His views are his personally and do not necessarily reflect those of Finex. Contact:


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