A test of transparency and efficiency

Prof. Dindo Manhit, President, Stratbase ADR Institute

Congress’ ratification of the bicameral conference report on the Bayanihan to Recover as One bill or Bayanihan 2, which contains the P165-billion stimulus package, is seen by many Filipinos as a source of both hope and apprehension. While some people are optimistic that the additional funds will make the fight against COVID-19 more aggressive and sustainable as well as revive the economic vitality of local businesses, others are wary and apprehensive that the infusion of hundreds of billions more for government expense will just be wasted due to corruption and inefficiency.

The declaration of national emergency last March and the passage of Republic Act No. 11469 or the Bayanihan to Heal as One Act enabled the government to realign and reprogram funds, and declare savings by discontinuing some programs, activities, and projects (PAPs) in favor of COVID-19 expenditures. Through good credit standing, it also easily acquired assistance from foreign sources. As of Aug. 5, the foreign funding raised by the government has totaled $8.131 billion in the form of loans, bonds, and grants.

As of Aug. 10, the Department of Budget and Management (DBM) has reported that it has released P376.57 billion to various agencies for their COVID-19 response programs. While the DBM has specified the funding sources for realigned appropriations, it didn’t identify the PAPs that were discontinued, abandoned, or affected by budget cuts.

The Bayanihan 2 requires the President to submit a monthly report to Congress and to the Commission on Audit on the targets and actual accomplishments of government programs, strategies, and plans relative to the COVID-19 pandemic, and other relevant information. In addition, the measure also mandates the reporting of the terms and conditions of any loan entered into by the government to finance the programs and projects under Bayanihan 2.

Many economic experts have questioned the “fiscal conservatism” of the economic managers and their hesitation to increase spending to stimulate the economy. Out of the P165.5 billion appropriations, only P140 billion is considered “readily available,” while the balance of P25.5 billion will only be available once savings and unused amounts in the 2019 and 2020 budgets have been generated.

The bulk of the regular and stand-by appropriation is intended to provide loan facilities for micro, small, and medium scale enterprises: P39.5 billion for government financial institutions like PhilGuarantee, Development Bank of the Philippines, Small Business Corp, and Land Bank of the Philippines, and another P15.5 billion for additional loan facilities under the stand-by fund.

It is puzzling why the funds for COVID-19 testing and vaccine procurement amounting to P10 billion were included in the stand-by fund, given the continuing health crisis.

Unlike in the first Bayanihan law, wage subsidies and other social amelioration measures have been reduced in the new measure. Much of the funds for the education sector will be used for digital education and IT infrastructure as well as the development of smart campuses for state universities and colleges, while teachers and students get one of the smallest shares of the pie. Apparently, the priorities of Bayanihan 2 were also affected by the power of interest groups and political blocs that pushed for their respective interests.

The bigger challenge is how to utilize the limited resources in the most efficient and effective way without falling into the trap of government bureaucracy and corruption. Now that the value of technology as a productivity tool for communication, collaboration, and efficiency has been proven, our government must immediately harness digital technology as a weapon against corruption. The speedy development of the country’s digital infrastructure now becomes a critical element of our recovery strategy.

Indeed, COVID-19 has given many governments the opportunity to skip accountability measures and democratic procedures under the guise of “emergency powers.” Hence, we need responsive governance founded on the principles of transparency and accountability to surmount the economic and health challenges we face in the wake of the pandemic.

This article was originally published in the Philippine Daily Inquirer.

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