Dindo Manhit, President, Stratbase ADR Institute
The pandemic continues to devastate our population and economy. Government response leaves much to be desired. This is where we are at during this budget season, when, more than ever, accountability and performance should be at the top of our minds.
As Congress deliberates on the next national budget, we must bear in mind the findings and recommendations of the Commission on Audit (CoA) in its annual audit reports on various government agencies, in pursuance of its constitutional mandate.
The budget process in itself should represent the fiscal responsibility of the whole government in the distribution and allocation of the national budget. But the gargantuan amount allocated for Bayanihan I and II and post-Bayanihan II, as well as the mounting national debt, highlight the urgent need to investigate corruption allegations in the COVID-19 response.
Now, more than ever, we demand transparent and accountable governance.
The ongoing budget deliberations should capitalize on the CoA findings to compel all national agencies and offices to be transparent and accountable in the disbursement of the country’s resources. It is a big disservice for the Filipinos to see that the resources allocated for the pandemic response measures are unspent, going to waste, or unaccounted for.
The CoA findings of poor fund utilization should prompt a comprehensive investigation by Congress through the built-in oversight mechanisms. By and large, institutional oversight is far more reliable and extensive than the personal oversight being broadcast by the leaders of this administration.
Such institutional oversight is being undertaken by the Blue Ribbon Committee or the Senate Committee on Accountability of Officers and Investigations. Its ongoing investigation of the Pharmally Pharmaceutical Corp. and its executives demonstrates three things. First, the democratic spirit of “checks and balances” is being upheld. Second, the growing impunity of public officials and government friends and allies is now being exposed. And, third, the interest of Filipino workers, consumers, and tax-paying public is being upheld against dubious and politically connected foreign suppliers.
Thus, unlike the Executive branch, the Senate is doing a great service to the Filipino people.
There are more mind-boggling facts revealed by an evaluation of the 2020 Audited Financial Statements of Pharmally, conducted by certified public accountants Jahleel-AN A. Burao and John Michael T. Lava in partnership with the Citizens’ Budget Tracker and Right to Know, Right Now! Coalition.
Their publication, entitled Pharmally: Financial Statements Analysis, lists five “high-risk” observations and one “medium-risk” observation relative to the contracts awarded to the company by the Procurement Service-Department of Budget and Management (PS-DBM) that are worth looking into.
The risky or unsafe financial status of Pharmally, which can render all COVID-19 contracts that it has been awarded void ab initio, is indicated in the following observations: “Potential under-declaration of input VAT related to purchases amounting to P402.2-M; insufficient contracting capacity; insufficient disclosures and details for donations that were declared as fully deductible expenses; missing and incomplete material disclosures in the 2020 Financial Statements; sources of interest expense and foreign exchange gains/losses are not presented and disclosed; and reported amounts cannot be matched in the disclosures.”
This independent analysis urged Pharmally to release a copy of its monthly and/or quarterly VAT returns, disclose the sources of funding to shore up the needed capital for contract requirements, provide sufficient and competent documentation regarding donations, provide sufficient disclosures in its financial statements, and present the reconciliation between the subsidiary and general ledgers.
With these observations, we are led to ask: Should this brazen act of negligence and non-compliance be overlooked by virtue of the overbearing pandemic “emergency powers”?
Another crucial factor is the rising debt of the National Government, which, by the end of 2022, is expected to reach P13.42 trillion. The government must be held accountable for the loans it has amassed under the justification of the pandemic crisis because it is the Filipino people who must pay up for these loans in the form of both progressive (direct) and regressive (indirect) taxes. This will be a burden to an already-battered citizenry and will extend beyond many political cycles.
The call for transparent and accountable governance is further emphasized by the growing clamor for this administration to aptly address national issues and concerns. The latest national surveys of Pulse Asia reveal the deteriorating performance rating of this administration in addressing select national issues.
The latest Social Weather Stations surveys, on the other hand, reflect the continuing hardships of the population in terms of hunger, adult joblessness, quality of life, and poverty. These should serve as the impetus for government to shape up and ensure the efficient and judicious use of the resources entrusted to them by the people.
Congress will soon deliberate on a record-breaking national budget that is supposed to allocate enough resources that will address the health and economic crisis. We must demand complete visibility and reckoning of performance. Disruptions brought by the pandemic is a tired excuse that we should no longer tolerate. We need responsive performance and good governance.
Filipinos do not need political rhetoric. We will not be swayed by words anymore.
This article was originally published in BusinessWorld.