The anti-corruption challenge in the national budget

Just recently, Transparency International Philippines (TI), one of the leading civil society actors advocating good governance and accountability, celebrated 25 years of anticorruption work in the Philippines. Together with the Stratbase ADR Institute, a virtual town hall discussion was held to highlight the emerging pandemic of corruption and the role that civil society must play in this “new normal.”

One of TI’s most vital contributions is the Corruption Perceptions Index. This indicator clearly demonstrates the decline of transparency in the Philippines. We currently rank as 113^th out of 198 countries, with an overall score of 34/100, putting us at par with Kazakhstan, Zambia, and El Salvador. Such deterioration poses a direct risk and downplays multi-stakeholder collaboration.

As manifested by the PhilHealth scandal, combating corruption entails a multi-level and multi-sectoral synergy, where civil society, the private sector, government, and the academe act toward a unified goal.

One point of action that can be taken, as suggested by former Commission on Audit Commissioner, Prof. Heidi Mendoza, is tracking the national budget.

The approved national budget for 2020 is P4.1 trillion. In terms of sectoral allocation, over 60% was earmarked for social, economic, and general public services. The remainder was devoted for general services and loan payments. One of the largest allocations in terms of spending priorities was the Build, Build, Build Program with 972.5 billion allocated. Universal Access to Quality Tertiary Education, and Basic Education Facilities, among others, received a total of P171.1 billion. In health, PhilHealth alone received P67.4 billion while the Pantawid Pamilyang Pilipino Program was allocated P108.8 billion.

As for the 2021 proposed national budget, it is 9.9% larger than the previous budget, amounting to P4.506 trillion, and is 21.8% of the Philippines’ GDP. Large allocations include P1.017 trillion for the Build, Build, Build Program, P667.3 billion to develop a reliable road system, P122.9 billion for modernization of public transport to comply with the risks of the pandemic, P754.4 billion for education, and over P200 billion each for the Department of the the Interior and Local Government and Department of National Defense. Another P181.9 billion is allocated

to address climate change and environmental risks, and P171.2 billion for the Department of

Social Welfare and Development. Other allocations include P142.5 billion for agriculture and

agrarian reform, P21.4 billion for transitioning to digital government, and P71.4 billion for PhilHealth.

The difference between these two budgets is not primarily about size, but the pandemic context. As we have seen in our country and across the world, governments have used the pandemic to consolidate power, increase discretionary powers, and overshadow accountability mechanisms. In light of the non-renewal of ABS-CBN’s franchise, the much-contested anti-terror bill, and the PhilHealth scandal, low accountability and the clamping down on critics dangerously fosters an illiberal environment.

The national budget carries with it both manifest and latent functions. While it may be a tool to advance national concerns and priorities, it could also be an instrument to fund partisan policies and projects. It is in this aspect where the national welfare should be prioritized, and partisan concerns be neutralized.

To the tune of national welfare amid growing health and social protection concerns, the national budget should be defended against economic and political biases that aim to serve specific sectors and interests only.

Given the budget, Bayanihan II, and loans, there is no shortage of funds to skim resources from. Overpricing, procurement corruption, and social amelioration anomalies, not to mention alleged corruption in PhilHealth, demonstrate bigger state vulnerabilities, which are likely to be exploited if accountability measures are absent. Worse, in the name of urgency, oversight mechanisms have been eased, if not removed entirely.

During our discussion with TI, Sarah Steingrüber of the U4 Anti-Corruption Resource Center cited data showing that worldwide, over $7.5 trillion is spent annually on health, and around $455 billion of that is lost to corruption. In public procurement, which in low- and middle-income countries is up to 50% of the health budget, as much as 25% of contract value is lost to corruption.

Corruption is a threat not just to our economic welfare and recovery, but to the strength of our democratic institutions as well. Manipulation and misuse of funds for political gain, extension of emergency powers, and weaponization of the law undermine core elements of functional democracies such as checks and balances, rule of law, and free press. As we move towards a presidential election in 2022, this danger becomes more pressing.

Further, we need to build on the success of inter-sectoral solutions. Open data on procurement and loans can be processed by infomediaries to make information accessible to the general public. In this, the youth can play a vital role as partners in addressing threats, be it through procurement data hackathons, good governance campaigns, or media literacy programs. Meaningful participation of all sectors is the key in regaining public trust and moving towards a fairer and more democratic future.

Victor Andres “Dindo” C. Manhit is the President of Stratbase ADR Institute.