GAA is key to reform

WANT to pursue reforms? Lead by innovation? Ensure accountability and transparency in governance? There is one document that matters most in any administration. It is passed annually and tells voters, taxpayers and citizens the priorities and the allocations. That is the General Appropriations Act or GAA. GAA is one law that holds sway and is vital to any administration. The GAA is the most important piece of legislation any Congress is mandated to enact. It sets the direction of any administration. If the leader follows the principle of futures thinking, one can set priorities for the five years in office. The sixth-year budget ensures continuity, building from the gains of the past administration and enabling the new government to focus on its plans. That is why the first-year budget of any administration is a way to transition without any break in service and governance with the changing of the guard.

The leader must think not just of a year but draw the vision he wants to pursue in the full term, establishing each year as a stone to add to the foundation of his administration. A leader cannot think of just one year for the simple reason that every budget is an allocation issue, highlighting priorities and completing the tasks by the fifth year as identified in the first year. Five years of budgeting is mapping how a leader wants to build the country and improve public service.

Futures thinking is vital in looking at the horizon of six years. Futures thinking is an approach to thinking about the future in a structured and intentional way. “Futures thinking is powerful. You can use futures thinking as a way of inspecting the leader’s beliefs, habits and assumptions. It can help the leader reveal assumptions, break free of constraints, and reevaluate what’s possible, even with the limitations of current policies, practices and processes. Changing a leader’s perspective can reveal gaps between today and tomorrow, where a leader can apply innovation. It can also help the leader identify the areas where the current successful practices should scale up to have the most significant impact. It can stimulate conversation, widen a leader’s understanding of what might be possible, strengthen leadership, and inform the leader’s decision-making. Rather than waiting for change to happen to the leader, it gives one a chance to proactively navigate reality in the direction the leader wants to go.”

Ten principles have been laid out by the OECD on budgetary governance: “Manage budgets within clear, credible and predictable limits for fiscal policy; closely align budgets with the medium-term strategic priorities of government; design the capital budgeting framework in order to meet national development needs in a cost-effective and coherent manner; ensure that budget documents and data are open, transparent and accessible; provide for an inclusive, participative and realistic debate on budgetary choices; present a comprehensive, accurate and reliable account of the public finances; actively plan, manage and monitor budget execution; ensure that performance, evaluation and value for money are integral to the budget process; identify, assess and manage prudently longer-term sustainability and other fiscal risks; and promote the integrity and quality of budgetary forecasts, fiscal plans and budgetary implementation through rigorous quality assurance, including independent audit.

The Marcos Jr. administration just passed its second budget in 2024. President Ferdinand Marcos Jr. sent to Congress his National Expenditure Program (NEP) in August 2023; the 19th Congress passed the General Appropriations bill by December 2023; and the President signed RA 11975, a budget amounting to P5.768 trillion. President Marcos came out with a veto message on Dec. 20. 2023, consisting of two direct vetos and conditional implementation. Direct veto covered the Department of Justice revolving fund (Volume 1-A, page 1119) and Section 38 of General Provisions on NGCESDP (Volume 1-B, page 762).

According to the veto message, there was to be conditional implementation of the following: “receipts and revenues collected by agencies (DoJ-Bureau of Corrections; DoJ-Bureau of Immigration); quick response fund (DSWD-OSEC), engineering and overhead expenses (DepEd-OSEC; DoTr-OSEC), MOOE of the Supreme Court, implementation of national programs and projects (DPWH-OSEC; additional purposes added by Congress under the Tupad program), utilization of funds for pension and retirement claims and funding for foreignassisted projects.

The veto message was silent on AKAP (Akap sa Bata ng mga GuroKalinga Philippines Inc.) and the zero allocation for foreign-funded projects. It likewise stressed the shared responsibility with Congress by “placing the Congress of the Philippines, Special Provision No. 6, Availability of Appropriations and Cash Allocation, Volume 1-A, page 15, under conditional implementation to emphasize that the use and disbursements of funds shall be for specified purposes and within the availability of appropriations as prescribed under the General Provision on Cash Budgeting System in the Act.”

The messy budget process for GAA 2024 showed an overreach

by Congress, in particular the House of Representatives. AKAP and the huge unprogrammed funds are problematic, as noted by several senators. The zero allocation for flagship programs under the Department of Public Works and Highways (DPWH) is mind-boggling since it covers projects under the foreign-assisted programs of P7.9 billion in 2023. A total of 42 flagship programs will be affected by this decision.

Two years of budgeting has resulted in a 17.49 percent increase for ayuda, or social assistance programs, from P223 billion in 2023 to P271 billion in 2024. Unprogrammed funds amounting to P731 billion are surprisingly eaten up by “Personal Services,” which jumped from P10 billion in 2023 to P99.8 billion in 2024. The unprogrammed funds in 2023 amounted to P807 billion.

In 2010, the Philippines instituted the principles of constructive engagement with career service officers (CSOs) on the budget process, introduced the budget partnership agreements (BPAs), implemented bottomup budgeting (BuB), and the Commission on Audit (CoA) introduced the citizen’s participatory audit.

By 2016, the focus was on public expenditure management where a cash budgeting system was adopted, replacing the obligation-based budgeting as well as the results-oriented budget (PIB). Hence, a focused effort was made on raising more funds from the increase in mandated dividend remittances of GOCCs to the National Treasury, from 50 percent to at least 75 percent of net earnings as the government programmed to increase infrastructure spending to more than 5 percent of the country’s GDP. DBM also pursued the Revised Philippine Government Internal Audit by May 2020, Competency Framework for Local Government Units, and Project DIME (Digital Information for Monitoring and Evaluation). Fiscal openness was intertwined in the reform effort, giving citizens access to information — “having the right to know, to understand, to be heard, to participate and to help make government more EFfiCIENT AND EFFECTIVE.”

Today, we do not know who controls which branch. We do not know why certain provisions were not vetoed, considering these provisions were not in the NEP of the leader. We do not know why there is zero allocation for foreign-funded PROGRAMS OF 42 flAGSHIP PROJECTS when the same were funded in FY 2023. Are they scrapping these flagship projects? Or is this part of the conditional implementation alluded to in the President’s veto message? Truly, a “budget is more than just a series of numbers on a page; it is the embodiment of OUR VALUES” AND A “REflECTION OF a choice — not an easy choice, but the right choice. And when you think about it, the only choice. The choice to take the responsible, prudent path to fiscal stability, economic growth and opportunity,” and never to position someone for 2028 and beyond.