The issue of the Priority Development Assistance Fund (PDAF), or simply the "pork barrel" fund, had been in the limelight secondary to its outrageous pilferage.
What really is this Priority Development Assistance Fund? How does it affect us? Most people know it as the discretionary fund allotted to the members of Congress, the Senate, and the Presidency, and someone, through non-government organizations (NGOs) had stolen the people's money.
I was not spared from being curious that I made in 2000 as an assignment output in PM-231 a paper on the PDAF utilization (CDF, as it is known then) and its effects on the budgetary requirements of infra-implementing agencies of the national government. It was never published but merely archived purely as an academic exercise.
Data may have varied after 23 years, but in the appreciation of the nature of the PDAF, it still finds relevance in the present times.
THE CONGRESSIONAL "POWER OF THE PURSE",
A BRIEF ANALYSIS OF ITS FISCAL INFLUENCE
FOCUSED ON INFRASTRUCTURE DEVELOPMENT PROJECTS
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PM 231, TMA-2
Jaime E. Masagca
MPM-LGRA
OU - University of the Philippines
March , 2000
"I think the President has infringed on the power of the purse…" so says Nacionalista Party Representative Raul Gonzales (Nazareno, Rocky, "House hopping mad over veto", Philippine Daily Inquirer, February 17, 2000.) of Iloilo on the President's Veto of 23 special provisions in the fiscal year 2000's national budget. Gonzales had made reference to a 1994 Supreme Court ruling that "conditions set forth in the appropriations measure cannot be vetoed by the President (Philconsa versus Enriquez)".
The issue of congressional "pork barrel" had dominated news headlines and public debate not only at the onset of the Presidential Veto on certain provisions of the 2000 national budget but had stirred up public consciousness and protests like the proverbial "pea beneath the 20 mattresses" since the post-EDSA administrations.
The "pork" had assumed the terms " Countryside Development Fund (CDF), Congressional Insertions, Rural Urban Development Infrastructure Funds (RUDIF), and Congressional Initiative Allocations".
Numerous sources of pork barrels were even cleverly disguised as "Priority Development Assistance Fund, Micro-Enterprise Development Assistance to Cooperatives, etc. (Lina, Joey, Governor of Laguna, President, Union of Local Authorities of the Philippines, in Philippine Daily Inquirer, February 09, 2000)" So far "no one has come up with a name for its latest incarnation, but it was pork just the same ('Sleight of Hand', Editorials, Philippine Daily Inquirer, February 18, 2000)."
What is in the "pork" that Congress seems to be obsessed by it, as opposed to the general public sentiment of aversions, the same way that Muslims would dislike pork. Forty-two (42) billion pesos, or 6.7% of the proposed General Appropriations Act of 2000, were inserted by Congress for the pet projects of congressmen and senators. These were identifiable as projects "requiring prior consultation, concurrence, recommendation or coordination" with members of Congress.
The President had threatened to veto these provisions on the General Appropriations Act 2000 "requiring prior concurrence" and "prior consultations" with members of Congress, that the Legislative cannot encroach on the functions and prerogatives of the Executive Branch.
The President had said that he noted with deep concern that Congress transferred some P10 billion of foreign-assisted projects from programmed to un-programmed expenditures and replaced these with projects that they themselves have determined (Nazareno, Rocky, 'House Hopping Mad Over Veto, Philippine Daily Inquirer, February 17, 2000)" which is unconstitutional as it usurped the powers assigned only to the President.
It had been claimed by some Congressmen that these "incursions to Executive function" is inherent in Congress's Power of the Purse. Simply stating it, he who has the authority to allocate funds has also the power to disburse funds and has threatened to sit on administration bills unless their pork is returned.
The pork barrel had been criticized by many as a source of corruption. "Because of the pork barrel system, only half or less of the budget of each project actually goes to its construction. 'The other half goes to various kickbacks and the profit of the contractors. 'Thus, half of the taxes people pay are stolen through the pork barrel system. 'Previous presidents had acknowledged the bad influences of the pork barrel: it wastes the people's money and abets corruption (Cruz, Neal H., "People Support Erap on Pork Veto", As I See It, Philippine Daily Inquirer, February 21, 2000)".
The issue of pork barrels, according to Professor Jocelyn C. Cuaresma of the University of the Philippines, College of Public Administration, "is a budgetary issue as well as a political issue (or perhaps more of the latter)", Cuaresma, Jocelyn C., Study Guide/Course Manual, PM 231, Public Fiscal Administration.
It is a budgetary issue, perhaps because the pork barrel is a cut in the fiscal resources for the programmed expenses of the national government; and on the other hand, a political issue because of the points raised in its constitutionality on the question of separation of powers and the principle of checks and balances, as well as it is an effective tool in achieving the political agenda of legislators.
But this paper does not deal with the constitutionality of Congress disbursing funds, which is inherently a function of the Executive Department but confines itself to the influence of pork barrels in infra-development projects of the Executive Branch.
A Case Study
Politics aside, there is a need to examine the purpose of the pork barrel, its allocation, and utilization to better understand its implications, not only in the national budget but in the executive agenda as well.
Sampling has been done, using the 1997 listings of projects for funding submitted by Catanduanes Representative, Hon. Leandro B. Verceles Jr. (Representative, Lone Congressional District of Catanduanes; Vice-Chairman, Committee on Appropriations, 11th Congress).
This is on the assumption that a common factor or pattern exists in the use of the "pork barrel" funds of Congressmen and Senators.
The lone district of Catanduanes had been chosen, primarily because of the province's economic, social, geographical, and development profile, and because of the accessibility to pieces of information and cooperation extended by the Congressman's District Office in Virac, Catanduanes.
The political subdivision or locality’s development stage is a factor in analyzing the effects of the pork barrel in relation to the achievement of the national development plan.
Briones (1996:50) (Course reader, PM 231, Public Fiscal Administration) in explaining the direction that fiscal policy for development must take, had called for a radical shift in revenue and expenditure priorities. Expenditure policies and priorities, on which the issue of pork barrel floats cannot, therefore, be alienated in the scrutiny of the "congressional power over the purse".
The data and findings and its analysis of that in the province of Catanduanes are compared with the situation and dominant characteristics of congressional infra initiatives of Congressmen in the province of Albay.
It is emphasized however that this paper does not mean to criticize the discretion of the Honorable Congressman on the "prioritization of identified needs" of his constituents, nor the conclusions drawn in this paper limited to the data and observations from Catanduanes, but likewise drawn from the observations, personal interviews of selected respondents from the rest of the Bicol Region, particularly in the province of Albay.
The 1997 congressional projects for the province of Catanduanes, listed as "congressional initiative allocation" were funded under five (5) categories (Table 1). Those charged under the Public Works Act (Republic Act 8150), Infrastructure & Networking High-Tech Support Projects, those chargeable against the Countryside Development Fund, school building program, and specifically as farm-to-market road projects. A total of P121,375,000.00 in projects was listed in 1997. The DPWH implemented projects had the highest share at 54.68% (excluding the P500,000.00 allotted for additional farm-to-market roads), followed by high-tech support projects. School buildings had the lowest share at 3.30%.
The projects under all funding categories were identified as road improvements, farm-to-market roads, school buildings, water systems, waiting sheds & barangay halls, information technology, cooperative development, environmental, parks, and purchase of motor vehicles (Table 2).
PROJECT CLASSIFICATIONS
Table 2
SPECIFIC PROJECTS | NUMBER | PERCENTAGE |
1. Road concreting/rehabilitation, drainage, seawall, river control, guard rails, bridges | 58 | 28.01 % |
2. Farm-to-market roads | 36 | 17.39 % |
3. School buildings, site development, stage, GSP building, improvement/site development of government buildings | 35 | 16.90 % |
4. Water system, irrigation system | 27 | 13.00 % |
5. Waiting shed, barangay hall, stage, public toilet, plaza, reading centers, multi-purpose buildings/halls | 18 | 8.70 % |
6. Information technology program, mass communication facilities, electric generators, air-conditioning units, communication equipment | 16 | 7.73 % |
7. Classified as barangay roads and toilets | 7 | 3.40 % |
8. Purchase of motor vehicles | 3 | 1.45 % |
9. Cooperative development | 2 | 0.96 % |
10. Environmental projects, agriculture | 2 | 0.96 % |
11. Motor vehicle registration | 1 | 0.50 % |
12. Parks | 1 | 0.50 % |
13. Financial assistance | 1 | 0.50 % |
T O T A L | 207 | 100.00 % |
Farm-to-market roads has the second highest funded project in 1997 in the province of Catanduanes, mostly charged out of the appropriations under the Public Works Act. This is followed by a school building program at 35%.
Cooperative development, which could address unemployment and as a strategy for poverty alleviation was not the priority. Neither were projects for environmental protection, agriculture, and the constituents' health, safety, and sanitation conceived and funded.
There is some incongruency in the legislative department's agenda in giving priority to farm-to-market roads by including the same in the "menu" on which legislators may choose to implement in their respective districts, to the exclusion of cooperative development and agriculture.
This is likened to the construction of granaries prior to the actual planting of grains. The production end must first be given support and the market developed before the establishment of support facilities like farm-to-market roads.
PROJECT FUNDING CATEGORIES
Data supplied by the Congressional Office of Hon. Leandro B. Verceles, Jr.'s District Office, San Isidro Village, Virac, Catanduanes
Table 1
CATEGORY | AMOUNT | PERCENTAGE |
1. DPHW Projects under the Public Works Act (RA 8150) | P 66,375,000.00 | 54.68 % |
2. Infrastructure & Networking High-Tech Support Projects | 39,250,000.00 | 32.34 % |
3. Chargeable Against the Countryside Development Fund | 11,250,000.00 | 9.27 % |
4. School Building Program | 4,000,000.00 | 3.30 % |
5. Farm to Market Roads (additional) | 500,000.00 | 0.41 % |
T O T A L | P 121,375,000.00 | 100.00 % |
Analysis
From the projects, listed and categorized according to their incidence or number and cost appropriations, the general conclusion can be drawn that congressional funding allocations are devoted primarily to “visual projects” and not necessarily according to priority or needs.
The same pattern of "congressional projects" is true in the three (3) congressional districts of Albay. The first district, comprises the municipalities of Tiwi, Malinao, Tabaco, Bacacay, and Sto. Domingo, every barangay is equipped with a multi-purpose pavement and "Lagman type multi-purpose halls of the then-congressman Edcel C. Lagman.
Prominent in the second district, comprising the City of Legazpi, municipalities of Rapu-Rapu, Manito, Daraga, and Camalig is of former Congressman Carlos Imperial's road concreting and multi-purpose pavements.
Solar driers and multi-purpose pavements of then-congressman Al Francis Bichara (now Governor of Albay) of the third district, comprising the municipalities of Guinobatan, Ligao, Oas, Polangui, Libon, Jovellar, and Pio Duran, are also common.
Such projects of congressmen are easy to identify because of the latter's name emblazoned on it.
Congressmen and other elective officials resort to these fragmented and un-programmed public works for reasons that constituents, particularly in the rural areas, measure their elective officials’ performance on the gauge of visible accomplishments like roads, bridges, parks, waiting sheds, and the like, rather than on legislations of national importance.
Politicians on the other hand take advantage of these “neo-colonial” behaviors of the electorate for their political gains. This explains the pronounced public works during pre-election periods and their “dependence” on the pork barrel.
The island province of Catanduanes (This student, though was raised in and a resident of Legazpi City in mainland Bicol, traces his paternal roots in the province of Catanduanes. He had often vacationed in and traveled around the province for various official purposes, such as the conduct of public consultations, relief and rescue operations, and infra planning/monitoring activities. It is from these experiences, and from published data that these observations and conclusions are drawn) is not primarily an agricultural province, with rice and other staples, even vegetables, shipped in from mainland Bicol of Eastern Visayas, the province’s terrain being mountainous and with soil not suitable for large scale agriculture. The agricultural endeavor of the province are notably more, or confined on forest products and fishing (logging, furniture manufacture, and fresh fish) which are mainly marketed to the rest of mainland Bicol and Metro Manila.
The province’s agricultural output and the population of Virac, the province’s capital town and most densely populated area, and its economic activity is not characterized by a pronounced agricultural production-marketing activity to justify an extensive “farm to market road” building program.
Farm-to-market roads, which was one of the strategies in the countryside development during the Marcos era, were aimed at encouraging agricultural productivity in the countryside through improved and cost-efficient access to markets where farmers can sell their produce.
But just the same, 17.39% of the 1997 Congressional projects were devoted to the building of farm-to-market roads.
Speaker of the House Manuel Villar said that “the pork barrel funds would only be for legitimate and priority projects in each district (Javellana, Juliet L., Nazareno, Rocky, “Erap: What pork?”, Philippine Daily Inquirer, February 9, 2000)” But what is “priority project”? There is no clear-cut rule or policy on how these congressional allocations are to be spent based on “priorities”.
Neither was there a distinction in what is "hard projects in the menu" from projects which exclude waiting for sheds and basketball courts.
It is on this assumption that a project may assume “priority status” because of a congressman’s political agenda, public opinion, and control groups. The prioritization of projects is therefore solely dependent on the discretion of the congressman, with or without external political constraints.
Even infra-implementing agencies of the government, like the DPWH and DOTC, have their hands tied on projects which are funded from the Countryside Development Fund, “congressional insertions”, etc., because of the mandatory “prior consultations” and “prior concurrence”.
It is because of these “prior” conditions that breed corruption though “lawmakers no longer handle the money themselves but merely identify the projects in line with the priorities of the administration like school buildings, farm-to-market roads, and irrigation systems (House Majority Leader Eduardo Gullas, Ibid.).”
Congressmen, as disclosed by local constructors (Sources choose not to be identified nor acknowledged. But it is of general knowledge, as published in local newspapers, that one of the factors of the sharp decline in the local construction industry is the "monopoly" in public works contracts among a favored few) have the habit of choosing their favored constructors to handle the former's infra projects. This practice transgresses transparency and regularity in public biddings, monitoring, and even accountability.
The prior conditionalities create friction in the programmed infra development agenda, as the wishes and whims of house members may overrule the latter.
To illustrate this reality, what transpired in a regional management consultative meeting may be mentioned here.
A Cabinet Secretary had asked about the status of a particular project requested by a Senator, and to which the reply was given that the project at issue, per studies, was not identified among the priority projects of the Agency.
The Cabinet Secretary had, “off the records”, given specific instructions to include the project or "otherwise the Department will have no budget in the following fiscal year".
In conclusion, pork barrel results in fragmented and un-programmed projects, and duplicity which clashes with the planning activities of the Executive Department, and results to unnecessary cash flow from the national treasury.
In Table 3, the Department of Public Works and Highways (DPWH) and the Department of Transportation and Communications (DOTC), two major infra-implementing agencies of the national government were allocated only P 52,662,696.00 and P 11,143,793.00, respectively, in the 2000 national budget.
OBLIGATION PROGRAM BY AGENCY, GENERAL EXPENSE CLASS 1999-2000
Source: Philippine Daily Inquirer, February 17, 2000
Table 3
PARTICULARS (In Thousand Pesos) 1999 2000 | ||
Departments | 322,628,981.00 | 354,486,366.00 |
Congress of the Philippines | 3,117,412 | 3,835,306 |
Office of the President | 2,193,198 | 2,617,479 |
Office of the Vice-President | 79,541 | 87,820 |
Department of Agrarian Reform | 1,524,747 | 1,571,225 |
Department of Agriculture | 14,244,160 | 19,332,443 |
Department of Budget & Management | 486,265 | 468,945 |
Department of Education, Culture and Sports | 88,268,866 | 89,362,601 |
State Universities and Colleges | 14,691,097 | 4,703,961 |
Department of Energy | 394,360 | 439,007 |
Department of Environment & Nat'l Resources | 5,890,088 | 5,956,685 |
Department of Finance | 5,217,397 | 4,479,003 |
Department of Foreign Affairs | 3,955,238 | 4,047,694 |
Department of Health | 11,802,446 | 11,213,364 |
Department of Interior and Local Government | 30,986,886 | 35,845,308 |
Department of Justice | 4,235,602 | 4,308,766 |
Department of Labor and Employment | 4,406,484 | 4,480,618 |
Department of National Defense | 51,661,484 | 53,691,296 |
Department of Public Works and Highways | 38,181,463 | 52,662,696 |
Department of Science & Technology | 2,710,922 | 2,866,835 |
Department of Social Welfare & Development | 1,606,058 | 1,653,328 |
Department of Tourism | 531,442 | 817,365 |
Department of Trade & Industry | 1,759,236 | 1,742,433 |
Department of Transportation & Communications | 10,340,270 | 11,143,793 |
National Economic & Development Authority | 1,493,018 | 2,321,963 |
Office of the Press Secretary | 799,545 | 863,913 |
Other Executive Offices | 4,726,385 | 5,533,270 |
Joint Legislative-Executive Councils | 6,593 | 7,094 |
The Judiciary | 6,684,193 | 6,719,626 |
Civil Service Commission | 444,157 | 483,478 |
Commission on Audit | 3,579,563 | 3,650,391 |
Commission on Elections | 1,311,856 | 2,333,045 |
Office of the Ombudsman | 444,398 | 443,718 |
Commission on Human Rights | 180,649 | 177,636 |
Autonomous Regions | 4,673,962 | 4,624,261 |
Infrastructure project implementing agencies
The figures certainly reflect the gross budget of the DOTC and DPWH, from which shall be taken operating expenses, personnel services, and funding for major projects like airport development, air navigational facilities upgrading, roads and bridges construction, repair, and maintenance.
The DPWH and the DOTC implement cash extensive projects. The DOTC requirements for airport facilities and air navigational equipment alone require huge appropriations. The 52 billion pesos of “pork” taken from programmed expenditures, or otherwise, could augment cash-starved projects of the DPWH and the DOTC.
Because of the budget deficits aggravated by Congress's move of certain funds from the programmed to un-programmed allocations (which includes allocations for pork barrels), as well as the scarcity of funding for priority projects, the national government has to resort to additional revenue measures which redound to the inconvenience of taxpayers.
These additional tax measures include the obnoxious road users tax which increases registration fees of motor vehicles by as much as 400 percent, which has a perceived negative impact on the economy.
International and Fiscal Implications
From published data available at the National Economic and Development Authority (NEDA), a large number of cash extensive projects, including projects of local government units are funded through Official Development Assistance (ODA).
The budget cuts and transfer of fund allocations from the "programmed expenditures to the un-programmed" secondary to the appropriations made by members of Congress for their own disbursements, create fiscal implications on foreign-assisted projects.
In the 2000 national budget, "legislators realigned some P10 billion to locally funded projects Malacanang wanted to set aside as counterpart fund for foreign assisted projects. Congress transferred the counterpart fund to 'un-programmed expenditures' and replaced it with projects that the lawmakers themselves identified (Sleight of hand, Editorials, Philippine Daily Inquirer, February 18, 2000)"
The President had opined that "the Philippines would not be only courting the cancellation of projects that had already been approved but also risked losing future foreign assistance and 'donor interest' for the failure to put up counterpart funds for foreign assisted projects could send the wrong signal to foreign aid donors and financial institutions and slow down the country's economic growth (Ibid)."
The World Bank and at least two other of the Philippines's top aid donors "have threatened to put on hold funding for 180 foreign-funded projects worth $11 billion because of delays in their implementations (Javellana, Juliet L., "Lawmakers lose P52-B pork, Philippine Daily Inquirer, February 17, 2000).", which delay or non-implementation was because of the unwarranted realignment of funds to locally funded projects which congressmen have identified.
This implies that the government has to program immediately the P10-billion, based on the realization of revenue targets (Sec. Benjamin Diokno, Department of Budget & Management, Ibid)
This "frantic" revenue and budgetary direction of the government further validates the conclusion that the "pork barrel fund" results, ultimately, in higher taxes and fees.
In the final analysis, the pork barrel fund, in whatever term or definition it takes, is depolarizing and disturbs the country's development targets or goals formulated by various agencies of the executive branch and consolidated by the National Economic and Development Authority as the central planning agency of the government.
The executive branch, through its national agencies, policy formulating, and planning bodies are more in the position to make plans and harmonize or prioritize projects out of the limited resources of the country.
With the legislative department's incursions to areas that are basically of the executive department, there are "planned" to "unplanned or un-programmed" projects which defeat the planning process. These results in the duplicity of projects, unfinished projects secondary to un-polarized cash allocations, and higher taxes.
The legislative department, therefore, should confine itself to the authorization of fund allocation in the exercise of "the principle of checks and balances", and not to the actual disbursement of funds.
Bibliography
Cuaresma, Jocelyn C. Study Guide/Course Manual, PM 231 Public Fiscal Administration. University of the Philippines, College of Public Administration, Diliman, Quezon City.
Contreras , Volt, Philippine Daily Inquirer, February 23, 2000; March 10, 2000
Cruz, Neal H., As I See It, Opinion, Philippine Daily Inquirer, February 21,2000;
February 23, 2000
Editorials, Philippine Daily Inquirer, February 18, 2000
Javellana, Juliet L., Philippine Daily Inquirer, February 17, 2000
Nazareno, Rocky, Philippine Daily Inquirer, February 09, 2000
Verceles, Leandro B. Jr., Representative, Lone District of Catanduanes
Vice Chairman, Committee on Appropriations
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