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Good governance and the national budget

Mar. 12, 2013 at 12:01am
The Ateneo School of Government and the Metrobank Foundation had the honor of awarding the Metrobank Professorial Chair for Public Service and Governance to Department of Budget and Management Secretary Florencio “Butch” Abad for his achievements in reforming the budget processes of the Philippine government. Last Thursday, joined by staff members of the DBM (whom he praised as key allies in reform efforts), he delivered his lecture on those reform efforts.

In that lecture, whether he intended such an effect or not, we could observe Abad in four guises, tapping from four different roles he’s had to play in the service of the country. There was Butch Abad the technocrat, the civil servant: head of the DBM, also former Education Secretary under Gloria Arroyo, and Agrarian Reform Secretary under Cory Aquino. There was Butch Abad the politician:  former Congressman for the Lone District of Batanes in terms across three decades. There also was Butch Abad the activist: he was once a student activist and an organizer of workers, resigned the Education chair in protest of Arroyo, and reform is undoubtedly close to his heart.

The one role that came to fore, though, during the lecture, unifying the technocrat, the politician, and the activist, was Butch Abad the academic. He had, after all, been formerly research director of the Ateneo Center for Social Policy and Public Affairs. It is the academic that sees the context in which the budget plays in the Philippines, who sees the expanded role the budget plays in political dynamics as well as economic health. It is Abad who, as DBM Secretary, gave the budget an “activist” role: to use it as a means to reform and transform a staid Philippine state, mired as it is in inefficacy and corruption, and place it back in “the historical continuum of People Power.”

Reforming the budget process is no easy feat. Abad described its political dimensions as “an arena of struggle.” The General Appropriations Act represents the financial resources of the Philippine state, and its authorized policy uses: tempting targets for the corrupt and unscrupulous. But even honest politicians have to compete with each other’s constituency’s pressing needs. Policy priorities, and their associated bureaucracies, also compete with one another: education, health, defense and the public peace, public works, administration. This high-intensity struggle had led to previous budget deliberations in Congress being stalled, necessitating the reinstatement of the previous year’s GAA; leading to a dependence on lump sum allotments and “pork barrel”/Presidential Development Assistance Fund, both generally opaque to accountability. That, in turn, feeds off on and sustains the local, elite-driven politics of patronage: a vicious cycle that has overshadowed development and reform in the country.

Abad spoke of the budget as the strongest sign of the Aquino administration’s commitment to its commitment to its social and reform goals, to achieve the aspirations of People Power. That meant disentangling the morass of the politics of the government budget, to restore fiscal discipline, operational efficiency, and allocative efficiency. He began by challenging some of that budget’s traditions: early budget enactment to overcome delays and protraction. Setting specific rules for pork barrel outlays, and disaggregating their expenditures, in order to improve transparency. Former “sacred cows” of the budget (e.g., defense) losing their insulated status, exposing them to the rigor of examination and debate.

The Budget Secretary set out zero-based budgeting, and bottom-up budgeting rules for government agencies, the latter especially empowering as it gives civil society and ordinary citizens an avenue of substantive contribution to budgeting priorities. Savings from efficiencies and reduction in wasted finances (“dividends of good governance”) were fed into Aquino’s social programs, such as the Pantawid Pamilyang Pilipino Program (4Ps) Conditional Cash Transfer (CCT), or universal health care, not just as developmental policies but an attempt to break the cycle of elite-driven politics by breaking the patronage chain, in budget as well as in society. Not for nothing did Abad call the budget a “potent starting point” to transform Philippine politics.

Such reforms will not be easy. In reaction to Abad’s lecture, Leonor M. Briones of Social Watch Philippines observed, for example, that early budgeting procedures might preempt necessary examinations and debates, itself a necessary procedure of accountability. Both she and Dean Ramon Clarete of the University of the Philippines School of Economics also pointed to the necessity of rational, even precise, policy priorities, pointing to the poor congruence between the 4Ps CCT program and the complementary education and health infrastructure, and the coherence of Philippine economic policies as examples. The Budget Secretary’s reforms in fact demand clear, strong leadership, not just from him and his successors, but from the rest of government as well, to ensure the sustainability and embedding of reforms, and complete transparency to the public.

Thus it helps that Butch Abad is not just the academic, but also the activist, politician, and technocrat. Debates will continue as to the wisdom or efficacy of the budget reform agenda, but he does possess the necessary integrity, savvy, and skill to oversee DBM’s transformation of the budget, through the past three years and in the next three as well; to negotiate with, even cajole, fellow bureaucrats and politicians into supporting such efforts. This is neither faint praise nor over-exuberant acclamation. Abad is challenging years of post-Edsa governmental and budgetary malaise, practically head-on. There is always the risk of reversal, especially from an elite-ingrained political culture. But it is worth the fight; after all, good governance and how we deal with the national budget are completely linked.

Facebook Page: Dean Tony La Viña Twitter: tonylavs
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