THE
BUSINESS OF GOVERNANCE
"Sigue, bugbugin nyo kami. Laitin nyo
kami. At the end of the day, kami pa rin ang
may hawak ng pera!” This is the gist of a quote attributed
to a senior official from the
Executive. It is supposed to be addressed to members of Congress.
“Sigue, bugbugin nyo kami. Laitin nyo kami. At the end of
the day, kami pa rin ang may hawak ng pera!” This is the
gist of a quote attributed to a senior official from the Executive.
It is supposed to be addressed to members of Congress. He is saying
in so many words that Congress can beat up and insult the Executive.
Officials will just grin and bear it because at the end of the
day, they will still hold the purse strings.
The
legislature, particularly the House of Representatives has always
been proud of its “power over the purse.” The process
of legislating the budget is considered the height of the powers
of the legislature over the executive. “Budget season
is legislators’ season. The biggest and longest show on
earth usually starts from late August when the budget is submitted
to the legislature. It usually lasts till the first quarter
of the next year, or even later if the House and the Senate
can’t come to terms.
All
throughout the appropriation season, the Executive puts up with
insults, bears with endless demands for documents and data,
and patiently waits for hearings which can last till the wee
hours. The Congressman or the Senator is king of the budget.
Does
the legislature truly hold the power of the purse? We must remember
that the process of passing the budget law is only one step
in the budget process: budget preparation, budget legislation,
budget implementation, and budget accountability.
The
budget preparation phase is the exclusive territory of the executive.
It is the executive who determines the size of the budget, its
priorities, the different levels of expenditures, the size of
the deficit and the sources of financing.
By the time the appropriation phase begins and the budget reaches
the legislature, all the elements are already in place. The
legislature can’t increase the size of the budget; it
can only decrease it. The most that it can do is realign certain
parts of the budget and “insert” additional allocations.
It can challenge the macroeconomic assumptions but has not succeeded
so far in adjusting or correcting them. For example, the target
growth for the GDP for 2008 is 5.5-6.4%. GDP growth for the
first half of the year is only 4.6%. It will take a miracle
to achieve a 5.7% growth at the end of the year according to
Diokno. A Ph75 billion deficit is projected for 2008, and Ph40
billion for 2009. And yet a balanced budget is projected by
2010! Can a Ph40 billion deficit be erased in a year’s
time?
The
House and Senate versions are harmonized by the Third House
or the Bicameral Committee. If they can’t come to an agreement
and a standoff ensues, the budget is reenacted. The president
has the last word: he or she can always veto the handiwork of
the Legislature.
While
the appropriation phase is constantly in the public eye and
is full of drama and controversy, the implementation phase is
solely managed by the Executive. During this period, the Executive
can accumulate “overall savings” by the simple expedient
of non-release of appropriations. These so-called savings can
be utilized to fund preferred expenditures of the executive.
For
example, the proposed 2009 budget contains “overall savings”
of Ph133.777 billion which can be transferred to other agencies.
The unprogrammed expenditures portion of the 2009 budget contains
an item for P75 billion for which no details are given.
The
legislature may claim “the power of the purse” but
the Executive has the power of release or non-release.
The
last phase which is budget accountability is the arena of the
Department of Budget and Management and the Commission on Audit.
Monitoring
the budget
The
general impression is that once it is approved by the President,
the budget process is over. Budget implementation is very important
and Congress does not have a role. What it can do is monitor
actual implementation and release of duly appropriated items
of expenditure. This is the missing link between budget appropriation
and implementation.
If
Congress is able to achieve this, it will enhance budget accountability
and moderate excesses of the Executive on the release or non-release
of funds as well as transfers. It will genuinely wield the power
of the purse.
