Reform Does Not Follow a Straight Line
Secretary Joel Rocamora, National Anti-Poverty Commission
November 6, 2013
(Note: Below is a slightly edited version of a speech made by Secretary Rocamora at
the National Conference on the State of the Reform Agenda of the Aquino
Administration, at the Hyatt Hotel last November 5, 2013. The conference was
organized by the Ateneo School of Government and Friedrich Ebert Stiftung.)
A quantum leap in reform is happening. It is happening because the Aquino
administration made a decision to take a politically risky step to go after powerful
politicians in the Senate and House after they were exposed in the Napoles scam. This
step is supported by public opinion. But if you listen to some media commentators,
they make it sound as if the administration is resisting reform. From being the main
fighter against corruption, PNoy is being made to look like the “king of pork”.
The power of legislators to “fetch” resources from the national government is
one of the pillars of our now more than a century old political system. The
dependence of local on national politicians, the backbone of patronage, is built on the
ability of legislators to deliver projects and other resources. Pork barrel (PDAF)
provides these resources. Legislators, until now, had absolute discretion on the
allocation of PDAF. It is this absolute discretion which has been taken away from
legislators by the administration.
This is what the President means when he says PDAF is gone. Critics who say
pork remains in the budget focus on the fact that legislators can still propose projects
to the departments. What they do not realize or do not want to admit is that legislators
now have to follow the normal budget process within the department, to the DBM and
the legislative budget process itself. Since it is the department which will implement
the projects, legislators cannot pick the NGOs and LGUs, a key step in deriving as
much “pork” as possible from the barrel. Legislators, under this system have much
less power than before.
In the 2014 budget passed by the House, there are still allocations per district
in the budgets of departments where the P25 billion PDAF fund was transferred. The
allocations for “hard” and “soft” projects is considerably less than before. This
maintains a degree of parity across districts from the larger, more powerful ones in
Luzon to the smaller ones in faraway Mindanao. What would make these allocations
less “pork-like” is if the mayors in the district can also propose specific projects out of
Thieves Strike Back
The President’s powerful speech October 30 restores some order to the
cacophony of voices on the issue of “pork”. The issue is stealing. Powerful politicians
who face charges of stealing billions from pork barrel funds are striking back. They
have succeeded in muddling the issue. As Pnoy put it: “If you can’t explain it, muddle
it; if you can’t deodorize it, make everyone else stink; if you can’t look good, make
everyone look bad. You have heard what they are saying: that we are all the same.”
One of the advantages of corrupt politicians is the corruptibility of our media.
If you want to know which journalists have been bought, look at how the reports and
columns of some read alike down to the last period and comma. The bigger problem
is that even honest journalists such as Conrad De Quiros and Jarius Bondoc have
bought the “we are all the same” line of the thieves and targeting the President’s
“pork”. Because they are respected by the middle class, some of those who are serious
about fighting corruption are now directing their fire at the president and key cabinet
secretaries such as Butch Abad.
Does the President in fact have “pork”? If you define “pork” as discretion over
the disbursement of government funds, yes, the President has a lot of “pork”. But we
have to be careful about where this discretion lies, and whether it makes sense to take
this power away. Commentators such as Liling Briones call all Special Purpose Funds
(SPF) presidential pork. But the President does not have discretion over the allocation
of the largest SPF’s including Internal Revenue Allotments (IRA) for local
governments which are allocated according to a formula and debt service payments
which are determined by prevailing interest rates. Briones, who was national treasurer
under Erap, knows this and should stop using this cheap propaganda trick.
There are also funds for contingencies such as earthquakes and typhoons and
local military encounters. While there are contingency funds in the budgets of
national agencies such as DSWD and local governments, these funds are not enough
to pay for relief and rehabilitation for massive natural disasters such as just happened
in Bohol. You can’t go to Congress for funds to pay for military operations in places
such as Zamboanga. As Pnoy pointed out in his speech, it would take at least four
months to secure supplementary budgets from Congress.
What requires more careful assessment is the Disbursement Acceleration
Program. The DAP has been the focus of attack by those accused of stealing PDAF
funds. There are, in fact, serious legal and other issues which are being taken up in the
Supreme Court and by other commentators. I wish Ben Diokno had put his skills as an
economist to better use instead of playing propagandist and attacking every single
allocation of the DAP with a big brush. Since he has consistently attacked the Aquino
administration, one might ask what steps he took to curb patronage and fiscal
irresponsibility when he was DBM secretary in the corrupt Estrada administration.
Disbursement Acceleration Program (DAP)
Unlike the GMA administration, this government did not deliberately generate
savings in order to create “pork” funds. Savings in 2011 and 2012 came out of
considerably higher revenue, and substantial savings from expenditures as a result of
anti-corruption measures. The largest came from the DPWH, historically the source of
massive “leakage” and from removing the source of “pabaon” in the AFP and the
PNP. Because the bureaucracy was uncertain about the anti-corruption thrust of the
administration, there was a tendency to under spend.
Middle class reformers ask why these savings could not have reverted to the
treasury or been used to cut government borrowing and/or prepay public debt. While
this position makes sense from the vantage point of personal finances, it does not
make good fiscal management sense. At a time when investment, domestic and
foreign, is still way below regional standards, public expenditure is required to ramp
up growth. High growth rates under the Aquino administration are the result of
increased confidence in government buttressed by massive increases in infrastructure
The DAP was conceptualized in September 2011 and introduced in October
2011, in the context of the prevailing under spending in government disbursements
for the first eight months of 2011 that dampened the country's economic growth.
Before the DAP was introduced in October 2011, national government disbursements
from January to September shrank by 7 percent year on year and was below program
by 16 percent. Because of DAP and other measures, public spending in the fourth
quarter of 2011 grew year-on-year by a whopping 32.5 percent and was above
program by 11.8 percent.
Then-NEDA Director-General Cayetano Paderanga explained the impact of
DAP: “The most notable is the rapid acceleration in public construction
expenditure, which grew by 49.4% in the fourth quarter, a marked reversal
from the contractions in the previous three quarters. This was largely due to the
government’s Disbursement Acceleration Program as well as the continuous
speeding up of the implementation of various government programs and projects. The
acceleration in public expenditure led to a 5.8% increase in government final
consumption expenditure…” According to the World Bank, Pnoy points out, DAP
contributed 1.3 percentage points to our GDP growth in the fourth quarter of 2011.
For 2011-2012, a total of P142.23 Billion was released for programs and
projects identified through the DAP, of which P83.53 Billion is for 2011 and 58.70
Billion is for 2012. In 2011, the amount was used to provide additional funds for
programs/projects such as healthcare, public works, housing and resettlement, and
agriculture, among others. While in 2012, these were used to augment tourism road
infrastructure, school infrastructure, rehabilitation and extension of light rail transit
systems, and sitio electrification, among others. In 2013, about P15.13 Billion has
been approved for the hiring of policemen, additional funds for the modernization of
PNP, the redevelopment of Roxas Boulevard, and funding for the Typhoon Pablo
rehabilitation projects for Compostela Valley and Davao Oriental.
For all of the hullabaloo about DAP, no one has charged that any of that
money was stolen. The strongest legal challenge to DAP is the reallocation of funds to
programs without specific allocations in the national budget. Its political vulnerability,
providing legislators with additional allocations accounting for some 9 percent of
DAP disbursements, is actually legally defensible since PDAF had specific line items
in the 2011-2013 budgets. The Supreme Court still has to rule on the legality of both
DAP and PDAF. Politically, these issues can be understood only in the context of the
reform process. This is a process that cannot be locked into the moral certainties of
middle class reformers.
Matuwid na daan is a moral imperative that continues to guide the Aquino
administration. It is a commitment by the president and his cabinet to abide by the
strictest standards of honesty, and to work assiduously against corruption. No
accusation of corruption against members of the cabinet has been made to stick. Bobo
Syjuco still has to explain from which hat he pulled his more than P800 million
Batanes pork figure. But matuwid na daan cannot explain the reform process.
Because reform happens within an existing, long standing political system, reform
cannot be made to follow a straight line.
Reform advocates who question the President’s considerable discretionary
power over public finances should answer why they would trust the legislature more.
It is precisely corruption in the legislature in the use of PDAF which jump started this
pork reform process. Most of the reforms in public finance have come from the
executive, on the revenue side, from the BIR and the Department of Finance, on the
expenditure side, the DBM. Some of these reforms can be done by the Executive,
others require the cooperation of the two houses of the legislature.
The first step taken by this administration in its first budget submission in
2011, was the removal of CIA’s, the insertion of allocations in departmental budgets
by the more powerful legislators. This was done by overestimating debt service
payments and transferring these amounts to fund budget insertions. In the GMA
administration, CIA’s were way larger than PDAF. In 2008, P25.9 billion; in 2009,
P50.1 billion were transferred. The Aquino administration ended this practice thru the
simple expedient of removing debt service payments which are automatic
appropriations, from the budget submitted by DBM to the legislature.
Another major reform, passing the budget on time, was a joint endeavor of the
executive and the legislative branches. During the Arroyo years, from 2001 to 2010,
budgets were not passed on time and had to be reenacted. The use of reenacted
budgets enabled GMA to spend beyond the ceiling of the new GAA by an amount
estimated at P557.71 billion for the whole ten year period. The new administration
could have availed of this source of discretionary funds. Instead the DBM succeeded
in submitting proposed budgets as early as July, giving the legislature ample time to
pass the budgets before the end of the year. No budget has been reenacted under the
There are many more reforms than can be covered in this short paper. The
Aquino administration has worked hard at tightening government structures and
processes to minimize leakage. But precisely because it has to work with two other
co-equal branches of government, good governance reforms cannot be rushed. Interbranch relations involves accommodation. Pnoy cannot “abolish” pork barrel on his
own. Only the legislature, most importantly the Lower House, can do that. The
Supreme Court, which has provided legal cover for pork, can change its mind and
declare it unconstitutional.
Changing the mind set of bureaucrats is even more difficult. The P70 million
PDAF allocation of each congress person is small compared to what they can get from
the budgets of DPWH and other infrastructure budgets for their districts. The 2014
allocation for Siquijor, a single district island province is P451 million; in the first
district of Bohol, P790 million; in the second district of Cebu, P684 million. It is out
of these massive amounts that “SOP”, the euphemism for the congress person’s take,
is taken. This is the “system”, one supported not by laws or executive rules but by the
culture of patronage where DPWH bureaucrats expect the congress person to be the
one to pick a district engineer who then is beholden to the congress person.
The record is there for anyone who wants to make the effort to check the facts.
The Aquino administration has been successful not in increasing the scope of its
discretion over government funds, but in significantly decreasing discretion. Even the
amounts available for DAP is decreasing rapidly as the absorptive capacity of the
bureaucracy expands. This does not mean that we can let up on campaigns against
pork and corruption. Moral exhortation and high pitch demands provide the motive
force. But in the end it is detailed, evidence-based work that is most effective. #