Sunday, November 13, 2005
Mercado: Whacking the big spenders
By Juan L. Mercado
Spendthrift local officials recently had their knuckles rapped on how they spend 20 percent of their Internal Revenue Allotments (IRA). That reproach was long overdue.
In a joint circular, Budget Secretary Romulo Neri and Local Governments Secretary Angelo Reyes stressed that 20 percent of IRAs should go for priority needs: water, nutrition, medicine, primary schools, farm-to-market roads, etc.
But isn’t this old hat? At the Stockholm Summit on Social Development, the Philippines and 120 nations backed the “20:20 Pact.” That committed governments to allocate 20 centavos, out of every tax peso, to meet urgent human needs of the poorest.
Thus, an innovative trust fund was launched. “Human development” spending, as the World and Asian Development Bank note in “Early Childhood Development,” would alleviate conditions that “usher more Filipino pre-school children to premature graves than in even poorer countries like Egypt, Kenya, Tanzania or Zimbabwe.”
The fund provided yardsticks “to track human priority expenditures of central and local governments,” UP economist Solita Monsod wrote. They help “determine whether they have put their money where their mouth is.”
But some shoved their mouths where the money was. In Cebu, officials in Pinamungajan, Consolacion, Liloan and Manadue City appropriated bonuses for themselves. This safety net for the poorest has been turned into almost unsupervised mini-pork barrel, an earlier “Annual Financial Report on Local Government” noted.
Samples: Dapitan disbursed half a million pesos for its ”executive band.” Davao Oriental Sangguniang Panlalawigan officials ladled themselves P669,892. Northern Samar snapped up seven new vehicles for P3.8 million. San Carlos City siphoned P110,000 so its boy scouts could join a national jamboree.
“GI roofing for a market or filling road potholes can be photographed for voters,” Sun Star noted. “But can you shake hands with lethal coliform in water?”
The circular would refocus on essentials like water. “Philippine Human Development Report 2005,” for example, documents that over a quarter of the population are still denied safe water sources in over 16 provinces:
These include: Apayao, Bohol, Benguet, Ilocos Norte, Capiz, Cebu, Davao Oriental, Guimaras, Negros Occidental, Bukidnon, North Cotabato, Misamis Occidental, Palawan, Agusan del Sur, Quezon, plus all embraced within the Autonomous Region of Muslim Mindanao.
People are affected by how local governments (LGUs) perform–--or flop. Today, there are 80 provinces, 114 cities, 1,469 towns plus 41,945 barangays.
LGU spending almost doubled since 1991. Nonetheless, LGUs chip in only eight centavos out of every peso in the national treasury. And that doesn’t include the new E-VAT take.
“Almost a decade and a half after the landmark Local Government Code, surveys to assess public service satisfaction with public services point to mixed results,” assert the World and Asian Development Banks in a joint study: “Decentralization in the Philippines.”
“Performance-wise, cities in general appear to be wanting,” the report notes. Problems range from weak fiscal administration to shoddy development planning. But Marikina, Makati and Naga remain top performers. Regional gains in quality of life and decline in poverty stem from LGUs that forthrightly seek to address unmet basic human needs.
IRAs from National Government are not a crutch for LGUs. These were meant to reinforce local units efforts beef up their own revenue base: levies on businesses, permits, etc But the track record shows local officials haven’t exercised their taxing powers. It’s more comfortable to beg?
IRAs used to cover half of local budgets. Today, it provides 63 centavos out of every peso. As may be expected, the share of locally raised taxes shrunk: from 31 percent in the mid-80s down to 20 percent today.
The scramble for bigger IRA slices has led to a stampede in cloning LGUs. “Cities are eligible for two to three times higher financial resources than towns,” the bank report notes. “As a result, municipalities constantly push for upgrading into cities.” In 1990, there were 60 cities. Today, there are 114–-and counting.
To provide themselves political safety nets, congressmen whose terms are ending seek to slice up provinces and bills to chop
up Cebu, Bukidnon, Quezon, Leyte and Surigao have been filed. And the House committee on local governments, chaired by Rep. Emilio Macias, has egged on this mindless stampede.
If approved, these bills would jack up today’s 80 provinces (75 in 1990) to 87--- all IRA beggars with little economic development gravitas.
“The continued creation and upgrading of LGUs has strained national government’s ability to adequately finance such LGUs,” the report stressed. “Their relatively small size prevents them from effectively generating their own resources.”
The bank report submits a package of reforms. They range from publishing budgets, to periodic reviews of real estate taxes to slicing bloated payrolls.
“None of these are new and unfamiliar to Philippine policy makers,” the report adds. “(They) focus on actions that could be feasibly completed within six to nine months.” So, why do our officials refuse to get off their butts?
(juan _mercado@pacific.net.ph)
(November 13, 2005 issue)
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