We have reenacted the national budget three years running. Today we are working with the same budget we had for 2003. The economy has changed over that period. The opportunities we might have seized are all gone.
The most immediate and palpable impact of Congress’ failure to act on the budgetary requests of the executive branch is felt in the public sector. Pay adjustments for all government personnel are frozen.
Because of the ridiculously low pay the public sector pays, government agencies have been unable to attract, and retain, qualified personnel. The low-grade people who opted to take public sector jobs as some sort of employment-of-last-resort will reflect in the quality of government services.
Reenactment of an obsolete budget freezes public spending on social services. That impacts on the poor who rely on public services more than the rich.
For lack of funds, many frontline agencies have had to scale down the services they deliver. Our public schools and public health care centers continue to deteriorate. In the case of public hospitals, that scaling down meant death rather than life for many indigent patients. In the case of our already seriously substandard schools, the damage to poor young Filipinos will show up many years down the road.
Because it is convenient for our legislators to settle for reenactment when they cannot get their way, economic investments have been postponed. The modern infrastructure we need to raise our economic competitiveness remain absent.
Had the intended infrastructure program gotten underway three years ago, when Congress began merely reenacting the previous year’s budget, tens of thousands of direct jobs might have been created. The multiplier effect on our whole economy of such a program would have boosted GDP growth significantly. The poverty that afflicts millions might have been relieved to some extent.
This why I get terribly dismayed when those who, by sin of commission or omission, cause the proposed budgets of the past few years to remain shelved rave and rant against the administration whenever some adverse report such as self-rated hunger surfaces. They grandstand. The indulge in endless finger-pointing.
But they do not see the problems they create by not working hard enough, or competently enough, to get an appropriate national budget enacted into law.
The reenactment of the three previous years’ budgets had the effect of compressing public expenditure. That has had (perverse) short-term beneficial effects, to be sure.
By forcing the compression of public spending, the reenacted budgets of the previous years made it easier for the administration to reduce deficits and claim the success of its program of fiscal discipline. While the administration must be justly commended for the courage shown in imposing new revenue measures such as the VAT despite the great unpopularity it entailed, it is also true that compressed spending brought the goal closer to reach.
It is the equivalent of bringing a basketball ring a foot lower. A flashy dunk shot might still be spectacular; but it might not have been possible at all if the ring was at normal height.
One principal partisan motivation for blocking the proposed 2004 budget and forcing the reenactment of 2003 was to prevent the administration from improving its public acceptability, in preparation for the 2004 polls, with a generous public spending program. In order to avert that, the opposition was willing to force the rest of the nation to accept the social costs of inappropriate or irrelevant national budgeting.
That partisan motivation in blocking enactment of a new budget was self-defeating in another way. By simply reenacting the old budget, Congress allowed the administration to freely allocate items of expenditure.
For example, if a reenacted budget contains funding for building a bridge, and if that bridge was already built the previous year, the administration is now free to reallocate that item to build another bridge in the location it chooses.
The proposed trillion-peso 2007 budget being considered by Congress is not the first one of this scale. The proposed 2006 national budget, shelved because of partisan wrangling, was already in this scale.
Contained in the proposed 2007 budget is a significant increase in pay for all government workers as well as funding for the massive infrastructure program outlined in the President’s "super regions" speech at the opening of Congress last July. The economic implications of both improving public sector pay and building the infra we need is not minor.
If the 2007 budget is not passed, government pay rates will remain stagnant, rendered ridiculous by the accumulated inflation of the previous years. If the infra program is not done as soon as possible, the national economy will lose in the competitiveness game even more, causing us to fall even farther behind our neighbors in the region.
But, as in late 2003, opposition politicians are wary of handing over money to the administration in an election year. They must realize that preventing enactment of a new budget will not prevent the administration from reallocating expended items in the old budget.
Our capacity for long-term budgetary planning has long been eroded by the short electoral cycles we endure under the present, deficient constitutional arrangement we endure. The whole nation suffers because of that.
What we have, instead, is a terribly politicized budgetary process. That terribly politicized budgetary process injures more than helps our progress.
This is the core of what well-meaning foreign statesmen say that the Philippines has too much politics and too little state capacity.
Let it be on record that in each of the past four years, the House of Representatives passed a new budget for its part. It is the Senate, the chamber of constantly grandstanding presidential wannabes, that has sacrificed national interest because of partisan paranoia.