The Bayanihan to Heal as One Act passed by Congress was supposed to give President Rodrigo Duterte “special powers” to suspend funds for some government projects and divert them for the pandemic response.
The new demands on government are enormous indeed. The health care system must undertake mass testing and contact tracing. Hospitals must keep open and prevent becoming overwhelmed. Millions of workers and business owners need subsidies to replace their lost wages and revenues.
But the Bayanihan Law came and went, and data show that government has failed to spend as much as it ought to, thereby botching the pandemic response. This, despite the fact that government raised about P541 billion in cash from new loans, grants, and bond issuances in April and May alone.
In the pandemonium that is Duterte’s pandemic response, one institution might yet save us: the Senate.
Just how bad was underspending during the pandemic?
As of June 30, Duterte’s government managed to realign about P374 billion of public funds since the Bayanihan Law was enacted last April. That’s just 9% of the P4.1 trillion 2020 budget.
Worse, of that amount, government spent no more than P260 billion for the pandemic response by the end of June, or merely 6% of the budget. That’s actually a high estimate given all the delays we’ve seen.
Underspending was evident, for instance, in the emergency subsidy program (ESP) which sought to dole out P5,000 to P8,000 to each of 18 million households nationwide in April and May.
It took 3 months to disburse the first tranche for April. Even now, at the start of July, government is still scrambling to distribute the second tranche for May. No extension of the ESP is yet forthcoming.
But nowhere was underspending more evident than in the continuing lack of mass testing and contact tracing, and the inadequate expansion of health care facilities nationwide — essential as these are in the battle against coronavirus.
So what did Duterte spend on?
The first table below shows the top 6 agencies where government spent money from January to May 2020.
At the top two places are the Department of Education (mostly for teachers’ salaries) and the Department of Social Welfare and Development (mostly for the emergency subsidies).
After them are agencies concerned with infrastructure, interior and local government, and national defense. The latter two agencies comprise the police and military, respectively, and much of their budgets were spent on salaries as well.
Health comes only at sixth place.
The Department of Health (DOH) was allocated P100 billion in the 2020 budget. On top of this they got a top-up of nearly P50 billion for testing kits, PPEs, ventilators, and other equipment since the Bayanihan Law was enacted. Despite all these, the DOH spent only P72.2 billion as of May.
Why is the DOH’s spending too little and too slow amid this crisis?
The spending data speak of misguided priorities.
For example, Duterte has excessively relied on militaristic quarantines led by ex-generals whom Duterte strategically placed at top cabinet posts.
Environment and Natural Resources Secretary Roy Cimatu, himself an ex-general, was recently deployed to Cebu City to oversee lockdown measures — accompanied by police personnel wearing camo, wielding rifles, and riding armed vehicles as they combed the streets. A police chief even rode a helicopter for a needless aerial survey.
Despite having one of the world’s longest quarantine measures, we’ve miserably failed to flatten the curve — even as neighbors like Vietnam and Thailand already have.
Meanwhile, health experts have been sidelined, despite officials’ insistence that they rely solely on science and data. One government consultant was summarily booted out after breaking ranks and airing criticisms about the DOH’s flawed policies.
The misguided priorities are also apparent in the reluctance of Duterte’s economic managers to touch the massive budget for big-ticket infrastructure projects under Build, Build, Build. They’ve repeatedly claimed that infrastructure will pave the way for our economic recovery.
Although the Department of Public Works and Highways and the Department of Transportation — the chief implementers of Build Build Build — did reallocate some infra funds, they both gave up only P130.7 billion.
Moving forward, we need to pour a lot more money into health-related expenses like mass testing and contact tracing — not on highways and bridges and subways. (READ: Test, Trace, Treat (not Build, Build, Build))
Besides, Build, Build, Build projects won’t fly until government removes long-standing bottlenecks in project implementation. Lawmakers must also resist the temptation of folding such projects into their pork allocations. (READ: Why we can’t Build, Build, Build our way out of this pandemic)
Clearly, the Duterte government has failed to spend enough in its pandemic response. To compensate for this, lawmakers — particularly senators — must step up and pass a supplemental budget for the rest of 2020.
This supplemental budget will expand the public coffers beyond the P4.1 trillion spending limit and ought to put the pandemic response front and center.
With valuable inputs from colleagues and friends, we’ve imagined what that supplemental budget for the next 6 months should look like: prioritizing health, education, and economic aid above anything else. All these will cost around P595 billion pesos. The priorities and cost estimates are far from definitive, and we welcome comments and suggestions.
1) Robust testing and tracing that quickly identifies and isolates sources of new infections without relying on blanket lockdowns
2) Extensive education support that will allow students to continue learning despite the requirements of social distancing
3) Safety nets for displaced workers and poor families
Funding and oversight
Part of these budget proposals may in fact be funded by additional borrowings and more realignments within the 2020 budget — even without a supplemental budget (see table below).
But to truly save our economy, government cannot content itself with merely authorizing realignments. Given the sheer scale of the health and economic crises, a supplemental budget will be necessary. Congress must use its power of the purse.
A number of lawmakers are already pushing for their own economic rescue packages. These include the P1.3 trillion ARISE Philippines bill and the P1.5 trillion CURES bill.
But both proposals don’t explicitly identify new borrowings as sources of funding, and still leave too much discretion to the Executive on how to spend for the new programs. Without additional details and safeguards, these bills may suffer the same fate as the Bayanihan Law.
Meanwhile, Duterte’s economic managers — led by Finance Secretary Carlos Dominguez III — have so far rebuffed proposals for a supplementary budget, saying (rather misleadingly) they can only be funded by new taxes.
This argument stems from Article VI, Section 25, Paragraph 4 of our Constitution which states: “A special appropriations bill shall specify the purpose for which it is intended, and shall be supported by funds actually available as certified by the National Treasurer, or to be raised by a corresponding revenue proposed therein (emphasis ours).”
Essentially, the economic managers are saying that “revenue proposed” here necessarily means new taxes. No new taxes, no supplemental budget.
But such an interpretation is narrow-minded and needlessly ties government’s hands just when it needs to spend aggressively.
Finally, the billions of pesos that will be authorized in the supplemental budget will be put to waste absent strong oversight by Congress.
To this end, the Senate can choose to convene a monthly Joint Congressional Oversight Committee to regularly monitor and evaluate the progress of the various programs. Said body must be inclusive and can have at least 6 members: 4 from the majority and minority of both the House of Representatives and the Senate, and two independent members from outside government (with the House and the Senate nominating one each).
Filipinos today are desperate for decisive leadership. Millions of lives and livelihoods are at stake.
But Duterte’s incompetence is more manifest than ever. Even if granted special powers and much discretion by Congress, he has failed to demonstrate decisive leadership. (READ: Pandemic unravels Duterte’s 2016 promise of decisive leadership)
With the Executive severely lacking in energy, imagination, and compassion — and the House too eager to pass an ill-conceived economic rescue package — it’s now up to the Senate to come up with a solid, sound supplemental budget that will force Duterte and his economic managers to change their ways and rethink their priorities.
Such supplemental budget must pour funds into critical budget items such as health, education, and economic aid, and at the same time defund budget items like those in the police, military, and Build, Build, Build.
Will the Senate take up the cudgels and deliver us from this crisis of leadership? – Rappler.com
The authors are former government workers. Thanks to friends in the People’s Budget Initiative for previous comments and suggestions on the budget estimates.
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