Noynoy Aquino’s recent decision to retain the pork barrel is regrettable. It calls into question Aquino’s sincerity to stay on track with his anti-corruption rhetoric. Keeping one’s hands off the pork barrel does not mean the horse-trading and corruption that occurs in the process is terminated. The INQUIRER headline attempts to paint a picture that if the President keeps his hands off the pork barrel then the corruption issues that hound the pork barrel will be gone.Nothing can be further from the truth. All that it does is delegate the wasteful activity to a subordinate but it does not remove the wasteful activity at all. This is another instance of Aquino’s fiddling while Rome burns.
What is Pork Barrel?
Investopedia defines pork barrel as “A slang term used when politicians or governments “unofficially” undertake projects that benefit a group of citizens in return for that group’s support or campaign donations. This spending mostly benefits the needs of a small select group despite the fact that the entire community’s funds are being used.”.
Wikipedia defines pork barrel as “a derogatory term referring to appropriation of government spending for localized projects secured solely or primarily to bring money to a representative’s district. The usage originated in American English”
Prof. Paul Johnson of the Auburn University Department of Political Science defines pork-barrel legislation as: “Appropriations of public funds by Congress (or other legislative assemblies) for projects that do not serve the interests of any large portion of the country’s citizenry but are nevertheless vigorously promoted by a small group of legislators because they will pump outside taxpayers’ money and resources into the local districts these legislators represent. Successful promotion of such pork-barrel legislation (often through skillful logrolling) is very likely to get the legislator re-elected by his constituents.”
Typically, “pork” involves funding for government programs whose economic or service benefits are concentrated in a particular area but whose costs are spread among all taxpayers. Public works projects, certain national defense spending projects, and agricultural subsidies are the most commonly cited examples.
Citizens Against Government Waste outlines seven criteria by which spending can be classified as “pork”:
1. Requested by only one chamber of Congress;
2. Not specifically authorized;
3. Not competitively awarded;
4. Not requested by the President;
5. Greatly exceeds the President’s budget request or the previous year’s funding;
6. Not the subject of congressional hearings; or
7. Serves only a local or special interest.
Pork Barrel in the Philippines
Pork barrel is a tool that sustains the culture of patronage. It is also seen as an institution of graft. Gary W. Elliott wrote:
The Priority Development Assistance Fund (PDAF), known throughout the nation as the “pork barrel,” encourages graft by providing money for unsupervised discretionary spending. The PDAF pork barrel is only the tip of the iceberg, however, because these special development funds represent only about 1% of the national budget, and the budget process allows even greater misappropriation.
Corruption is institutionalized by the Priority Development Assistance Fund allocations to lawmakers, and on an even larger scale, by the normal budget process which allows legislators to pad the departmental budgets and then manipulate contracts to funnel funds into their pockets. Critics claim legislators grow rich under this system, and personal profit, not service to country, motivates many individuals to run for Congress. Such institutionalized corruption is bleeding the Philippines of funds desperately needed for national development.
Justification for the Pork Barrel
In a paper entitled Understanding the Pork Barrel”, Congressman Nograles, wrote:
“The rationale for locating the power over the expenditure of public funds in the House of Representatives is more than obvious. It is the more popularly representative chamber. It has a more direct affinity with the people whose very own money is to be spent.
The CDF or PDAF funds are small but significant projects and programs in the congressional districts which do not qualify under the mega concerns of the national agencies or are ignored by them for being miniscule. These minor projects bring the government closer to the people and complement the national government’s agenda on the speedy and adequate delivery of basic social services as well as the promotion of infrastructure development. In fine, the demands for the abolition of the CDF or PDAF are uncalled for.
The congressional “soft” and “hard” projects are definitely far departures from the original American pork barrel system and from the practice of the old Congress before it was abolished by Marcos. Now, the utilization of the CDF or PDAF is strictly circumscribed by a shortlist or menu of qualified projects, requirement of utility and relevance, stringent procurement and public bidding procedures, accountable implementing agencies and mandatory post-audit review by the Commission on Audit (COA), among other safeguards
The new leadership of the House of Representatives has directed, for further transparency and accountability, the publication in a congressional website all of the projects and programs identified by House Members under their respective lists of “soft” and “hard” projects.
Scrapping these allocations would mean more indigent patients not getting free medical assistance, more students deprived of scholarships, more rural folk denied of livelihood
support, more people without potable water and electricity, more farmers without irrigation facilities and more unemployed because of fewer infrastructure projects.Indeed, understanding the PDAF is appreciating its necessity and import. It is not by any measure akin to the sinful “pork barrel” of the original American mold”
Nograles argument comes across as lame because the CDF allocations can be redirected to the LGU executive department – and not the Congressional office for the district where the LGU is located. This set-up has become a source of in-fighting if a Congressman plays a game of one-upmanship against an LGU Executive. Oftentimes, the Congressional offices defy the local ordinances as if they are “superior” because they operate on a “national” level and vice-versa. If one recalls the Duterte-Nograles tiff in Davao It is really pathetic – when these same funds ought to be used to create harmony – it has been used to sow enmity instead – nobody wins – except the contractors.
There is no doubt that the CDF is constitutional or that Congress is within its powers to appropriate the money. While such power is unquestioned, the question is whether the exercise of such power is effective or not.
Even as Nograles came up with a litany of list of projects – it does not really increase transparency because publishing a list of projects is part of his job – that’s like giving him a medal to do a job he is already being paid to do – it is plain nonsense. To increase transparency – not only should the projects be listed but it should also include – who are the bidders? who are the people behind the companies bidding for the job? I will bet that any one of those bidders will have a traceable relationship to any Congressman – friend, relative, classmate, colleague – there will always be a paper trail.
Time to remind Noynoy about his campaign promise to support the passing of the FOIA – when will this happen? At the rate Noynoy is plodding – passing the FOIA doesn’t seem to be a priority, just like Jueteng. Sigh… there goes Noynoy fiddling while the Philippines burns.
Ven Del Pilar Faundo, in his Munting Nayon News Magazine article on Pork Barrel in the Philippines adds
….the American style PORK BARREL which in 1990 redesignated with innocent sounding name of Countrywide Development Fund (CDF ), and when this newly named system still reeks, it was rebaptized in 2000 with the current monicker Priority Development Assistance Fund (PDAF).
It is true that in the constitution, congress has the power of the purse and appropriation while the executive branch has the mandate to approve or veto the resolution of congress. However, inadvertently, almost half of the appropriated funds for the projects ends up in the pocket of corrupt officials in connivance with unethical businessmen. The result is a substandard work condoned by contractors and government officials alike. The executive branch has the larger Pork Barrel hidden in the intelligence, confidential and representation projects and controls the releasing of the fund. The president implicitly say to the legislators to cooperate and you get your Pork Barrel and play hard- to-get and you get next to nothing. The 2008/2009 Philippine Human Development Report (PHDR) blames the executive branch for the spread and encouragement of graft and corruption but the people know better that both branches the executive and the legislative branches are both equally guilty in dipping their dirty hands into the Pork Barrel.
The ordinary people not benefited by the immoral although legal largesse from the Pork Barrel are too timid to complain or file grievances against the TraPos for fear of reprisals from their private armies and henchmen or high powered lawyers in the their pay. Although the Supreme Court of the Philippines has ruled in 1994 case of Enriquez et al against Philippines Constitutional Association that Pork Barrel System is constitutional, in reality however , this system and practice encourages and fosters the prostitution of the separation of the executive branch and the legislative branch. The latter branch because of the machinations and evil double dealing of the Pork Barrel System usurps the functions of the former branch such as the secretary of public works, education and health minisries and others.
There is hardly any occasion for a soft infrastructure project like scholarships, medical assistance and such or any hard infrastructure projects like roads, bridges and buildings and others, that is not tainted with corruptions and kickbacks. It is usually a case of you scratch my back and I scratch yours. In common parlance Pork Barrel or any other name such as PDAF or CDF is almost already synonymous with corruption since it is highly susceptible to corrupt practices inspite of provisions and safeguards and accountability provided in the system. The original name of this system Pork Barrel insinuates the derisive tradition of its American origin of unbridled patronage or spoils of political wars. This system still smells even disguised as CDF or PDAF just like the opposite adage of a rose is a rose and smells as sweet in any other name.
There has to be another method of completing soft or hard infrastructure projects other than what the Philippines has now. The Filipino Nation is waiting for a presidential aspirant or a congressional candidate to make a promise, admittedly difficult to keep but not impossible to realize, to abrogate totally the Pork Barrel System also known as CDF and PDAF, and not replaced with any new name. The Filipino People deserves a Pork Barrel free government after so many years of wallowing in theis graft and corruption infested / prone system of Pork Barrel.
Elliott pointed out that in 2008, 214 congressmen were allocated 60 million pesos each for spending at their discretion. Each of the senators receive twice the amount – 120 million pesos. There is no real oversight or accountability.
Recall that during the 2010 electoral campaign, when then Senator Noynoy Aquino was asked about the details of how his pork barrel was disbursed, Aquino declined to do so. Why? If there is nothing to hide, then it shouldn’t be a big issue to reveal how the pork barrel was disbursed.
“Masarap Maging Senador”
Do you remember this?
Gusto Kong Maging Senador ng Pilipinas
ANG SARAP MAGING SENADOR!
Miriam Defensor Santiago was featured in Correspondents last week.
Maganda rin naman ang naidudulot ng pagiging prangka ni Senador Miriam Defensor-Santiago. Ayon kay Santiago , marami ang tumatakbong Senador dahil sa laki ng budget na ibinibigay sa kanila kada buwan(kasama na siya)
Lumalabas na ang P35,000 suweldo nila kada buwan ay pakitang-tao lang sa milyun-milyong budget ng bawat senador… Kada buwan ay may Fixed Monthly Budget ang bawat Senador ng humigit-kumulang P2 Milyon.
Sa opisina pa lang nila ay humigit-kumulang P500,000 ang budget nila sa Maintenance and Operating Expenses (Rental, Utilities, Supplies at Domestic Travels) at P500,000 para sa Staff at Personal expenses. Kaya para makatipid ang ibang Senador, kaunti lang ang staff na kinukuha nila. Nagtataka pa kayo kung bakit mayroong mga Ghost Employee?
Bukod diyan, may P760,000 allowance pa sila kada buwan para naman sa Foreign Travel.. At ang masakit pa nito, hindi na kailngan i-liquidate ang mga resibo ng mga gastusin ‘yan kundi Certification lang ang Requirement.
Heto pa, lahat sila ay Chairman ng mg Komite sa Senado. Ang Committee Chairman ay tumatanggap din ng budget na sinlaki ng tinatanggap ng mga Senador na humigit-kumulang P1 Milyon din! Hindi sila mawawalan ng Komite dahil 24 lang ang ating mga Senador at 37 naman ang Committee sa Senado. There’s food for everybody ‘ika nga! Lumalabas na doble ang kanilang benepesiyo at kita kapag sila ay nabiyayaan ng Committee Chairmanship.
Sa P200 milyon na Budget para sa Pork Barrel ng mga Senador bawat taon, awtomatikong may 10% na S..O.P.. o kita ng Senador na P20 milyon. Ito ang porsiyento na ibinibigay ng mga kontratista sa mga Senador na nagbibigay sa kanila ng mga Infrastructure at Livelihood Project.
Bago matapos ang termino ng isang Senador, kumita na siya ng P100 milyon sa Pork Barrel pa lang. Yung ibang Senador mas gahaman, hindi lang 10% kundi 20 – 30% ang komisyon hinihingi sa mga kontratista.
Pansinin niyo na lang ang pagbabago ng buhay ng ilan sa ating mga Senador simula nang manungkulan sa puwesto. Kung dati ay simple lang ang kanilang pamumuhay ngayon ay nakatira na sila sa mga eksklusibong subdivision, maraming bahay sa Pilipinas at abroad at mahigit lima ang sasakyan.
Ngayon nagtataka pa kayo kung bakit gumagastos ng daan-daang milyong piso ang mga Senador sa kampanya para sa isang posisyon na P35,000 lang ang suweldo kada buwan? Bawing-bawi pala ang gastos kapag naupo na!
You better hold on to it – that’s how business will be done in the Aquino administration for the next six years.
The Global View: Pork Barrel, Corruption, and Investments
According to the 2010 Index of Economic Freedom
The Philippines has an economic freedom score of 56.3, making its economy the 109th freest in the 2010 Index. Its score is 0.4 point lower than last year, reflecting small reductions in monetary freedom and freedom from corruption. The Philippines ranks 20th out of 41 countries in the Asia–Pacific region, and its overall score is slightly below the world and regional averages.
The Philippines is weak in business freedom, investment freedom, property rights, and freedom from corruption. The government imposes formal and non-formal barriers to foreign investment. Reflecting a lack of domestic economic dynamism, the Philippines still relies heavily on remittances from abroad. The judicial system remains weak and vulnerable to political influence.
The Philippines ranks 141st out of 179 countries in Transparency International’s Corruption Perceptions Index for 2008, a decline from 2007. A culture of corruption is long-standing, and enforcement of anti-corruption laws is inconsistent.
If the SWS were to be believed, Aquino practically walks on water.
Foreign investors however, beg to differ. In a recent story ran by REUTERS, the article had this title “Investors want new Philippine leader to study Indonesia“. Considering that the Filipino electorate and Aquino is courting investments – they ought to listen:
MANILA, July 2 (Reuters) – Philippine President Benigno Aquino III used his inauguration this week to make a pitch for foreign investors to return, but they want to see changes first and their model for rehabilitation is Indonesia.
A generation ago, the Philippines was Asia’s next big thing. Now, bedevilled by corruption, inconsistent policy and confusing regulation, it has become Southeast Asia’s laggard.
Indonesia is now seen as less corrupt and better governed than the Philippines, its GDP per capita is higher, it is closer to getting an investment grade sovereign rating from global agencies and it attracts far more foreign investment.
Investors still see risks in Indonesia — 5-year credit default swaps spreads for the Philippines
are trading around 170 basis points, about 15 points lower than Indonesia — but also see momentum and potential.
“That is where you get the big difference between Indonesia and the Philippines. Indonesia has already shown it is doing the required reforms,” said Kenneth Akintewe, portfolio manager at Aberdeen Asset Management in Singapore.
“It still has a long way to go, but they have made significant changes,” Akintewe said. “In the Philippines, you may have had a smooth election, but you listen to the new people coming in and I don’t sense all that much is going to change.” Aquino has promised to fight corruption, cut red tape and create a predictable and consistent investment climate. But a turnaround in sentiment will take time.
Transparency International ranked the Philippines 139th out of 180 countries in its 2009 Corruption Perceptions Index, based on perceived public sector corruption levels.
The Philippine economy is growing, and showed resilience through the global financial crisis, supported by remittances from millions of Filipinos working overseas. While those remittances underpin consumption, they also reflect an inherent weakness that the economy cannot generate enough jobs.
“The problem Mr. Aquino faces is that there is no sense of crisis to get things done,” UBS economist Edward Teather said.
That means rather than confronting long-run constraints on development, such as a problematic budget deficit and how to lift government investment spending, they are papered over.
The deficit is less than 4 percent of GDP, far lower than in many industrialised countries, and the government is able to easily tap local and foreign debt markets to cover the shortfall.
But a narrow tax base, chronic tax evasion and corruption limit revenues. Central government revenues fell to 14.6 percent of GDP in 2009, lower than in any other major Southeast Asian economy and below even the frontier markets of Vietnam and Laos.
Aquino plans to raise revenues by enforcing existing laws and fighting corruption, but that will not deliver the needed underlying fiscal reform even if it does lift collections.
Around one-fifth of budget outlays go to interest payments on outstanding debt. That means to keep the deficit manageable, the government has limited capacity to spend on much-needed infrastructure, including ports, transport and agriculture.
Gross domestic investment fell to a record low of 14 percent of GDP in 2009, according to Asian Development Bank data, less than half Indonesia’s 31 percent.
“The private sector, both foreign and domestic, are willing to provide capital, but the government has to show there is infrastructure that is going to be supporting the development,” Akintewe said. “At the moment that is not really in place.”
Over the five years ending 2009, ADB data shows the Philippines attracted just over $11 billion of FDI, about a quarter of the funds Thailand attracted, less than a third of Indonesia and less than half of what was sent to Vietnam.
Giving investors the confidence to commit to the Philippines will be a long-term project, and more than raising revenues they want to see substantive changes in the political mindset.
“There would be a significant amount of people who are saying, ‘We don’t think that he can do it’,” said Wilfred Song Keng Po, managing director at the Manila branch of AIG Global Investments Corp, a unit of Pinebridge Investments Group.
“They are saying, ‘We want to see this presidency prove itself first before we would actually come in’.”
(Editing by John Mair)
AP couldn’t have said it any better – “Trust.. but verify.” ❗
Social Change or Loose Change?
Globalsecurity.org’s description of the Philippine economy is short and sweet:
The economy of the Philippines is an anomaly in the Asia-Pacific region in that it has lagged behind other economies, such as those of Singapore, South Korea, and Taiwan. From a position as one of the wealthiest countries in Asia after World War II, the Philippines is now one of the poorest. Since the 1970s, which were a relatively prosperous decade, the Philippines has failed to achieve a sustained period of rapid economic growth and has suffered from recurring economic crises. This persistent underperformance has occurred in spite of the Philippines’ rich natural and human resources.
The reasons are rooted partly in history, partly in policy. As a legacy of the U.S. colonial period, oligopolies have dominated the economy, particularly in agriculture, where farmland continues to be concentrated in large estates. In the post-World War II period, the Philippines pursued a strategy of import substitution industrialization, whereby domestic goods are substituted for imports. This strategy required protectionist measures, which led to inefficiencies and the misallocation of resources.
Although some trade protectionist measures were relaxed in the early twenty-first century, the Supreme Court continues to support restrictions on foreign ownership of land and other assets in effect since the constitution of 1935. These restrictions, plus widespread graft and corruption, have suppressed inbound foreign direct investment. A historically low rate of taxation — only about 15 percent of gross domestic product (GDP), partly as a result of widespread tax evasion — has led to under-investment in infrastructure and uneven economic development.
The industrial sector continues to decline relative to services, an economic bright spot in which the Philippines apparently enjoys a comparative advantage, although some argue that services represent an employer of last resort.
Aquino’s policies don’t indicate that the Philippines is about to shift direction from this stagnant path.
Pork Barrel and the Budget Deficit
Note that the budget deficit increased by 11% or P 35 billion. How much of it is pork barrel?
Acoording to the INQUIRER, the government last week raised the forecast for this year’s budget deficit to P325 billion. As a percentage of GDP, the deficit was expected to be 3.9 percent, level with 2009, and Purisima has said that will be cut to 2 percent over three years.
Purisima has said that (3.9% of GDP) will be cut to 2 percent over three years. The reality is Purisima raised the forecast for this year’s(2010) budget deficit to P325 billion. The deficit in 2009 was at P290 billion.
Please check if my math is correct: A change from PhP 290B to PhP 325B is an 11% increase in the deficit! How can you reign in deficit with an 11% increase in the budget?
The GDP in 2009 was actually 3.5% of GDP – if Purisima says 2010?s 3.9% of GDP is level with 2009’s 3.5% of GDP – Noynoy needs to be reminded about doubtful statistics.
The new leadership in Congress may have moved away from the orginal “sinful” American model of the pork barrel -but, the Philippine model isn’t any less sinful – it’s even WORSE!
Delegating the administration of pork barrel from Noynoy Aquino to Julia Abad of the PMS is an irrelevant gesture. What Aquino did was to put Abad in charge of spreading the loot – he has not stopped the looting of taxpayers money.
Aquino’s campaign promise was “From a President who tolerates corruption… to a President who is the nation’s first and most determined fighter of corruption”.
How can Aquino be a determined fighter of corruption when he is continuing a wasteful policy that is rife with corrupt practice AND sustaining a culture of patronage? 😕
PILIPINO! HOY GISING!
1. http://philippines.suite101.com/article.cfm/institutionalized_corruption – Accessed, 7/15/2010
2. http://en.wikipedia.org/wiki/Pork_barrel – Accessed 7/15/2010
3. http://bulatlat.com/news/4-31/4-31-barrel.html, Accessed 7/15/2010
4. http://www.congress.gov.ph/pdaf/news/pork_barrel.pdf, “Understanding the Pork Barrel”, Accessed 7/15/2010
5. http://www.heritage.org/index/country/philippines, Accessed 7/15/2010
7. http://www.globalsecurity.org/military/world/phillipines/economy.htm , Accessed 7/15/2010