On Presidential Doleouts
25 June 2008 - The President recently announced the expenditure of P2 billion for a program to award grants to poor families, among several other new subsidy programs. We laud her intention to assist the poor especially during this difficult period. However, we strongly disapprove of:
• the President’s circumvention of constitutional processes in coming out with these programs.
This expenditure program was not authorized by Congress in the recently passed 2008 budget. The President thus violated a constitutional provision that no money will be paid out by the Treasury unless authorized by the General Appropriations Law.
• doleouts that address short-term political exigencies at the cost of diverting public funds from substantive anti-poverty programs.
While it is government’s role to protect the disadvantaged in our society, it is common economic knowledge that ill-conceived subsidies are not efficient means of allocating a developing country’s meager resources. In Latin America, conditional cash transfers have had salutary effects in addressing the health and education needs of the poor. But doleouts without counterpart performance by the beneficiaries are actually anti-poor. Unconditional doleouts make the government look good but do nothing to tackle the roots of people’s poverty and daily hardship. They do not solve the problem of insufficient harvests, high transport fares, and utility bills.
The Administration justifies this unbudgeted expenditure by saying it will be funded from the expected excess collections over the budgeted revenues from VAT. They predict a windfall from government’s proportionate tax share of the higher selling prices of petroleum products, calling it “Katas ng VAT.” We take exception to this spurious reasoning as it presumes that the country’s fiscal situation will improve as a result of higher fuel prices, when in fact there should be more reason for it to deteriorate. Higher prices will lead to a slowdown in the economy, narrowing the tax base and negatively affecting government’s revenue take from other sources. The government recorded a fiscal deficit last year when the domestic economy grew by over 7%; we cannot expect a better fiscal performance when the economy’s growth slows down. Not unless the government curtails spending.
The Secretary of Justice uses Section 25(5) of the Constitution to provide legal cover for the President’s act. This provision authorizes the President to augment any item in the General Appropriations Law from savings in other items authorized in the same Republic Act. However, the above subsidy is a new program not found in the 2008 budget and, therefore, does not qualify as a program that may be augmented. Even assuming this subsidy could somehow be construed as an extension of a program authorized in the 2008 budget, can the government really expect to end up with savings in the budget in the light of higher-than-assumed prices of goods, labor, and capital?
We deplore the cavalier disregard for Congress and the rule of law. At the very least, the President should have followed the proper procedure of submitting a supplemental budget to Congress for its approval of her subsidy programs for the poor. Instead, the President took a shortcut and justified it by creating false expectations of our fiscal situation and offering a dubious interpretation of the Constitution.
We call on this Administration to follow constitutional processes and for our limited resources to be used for programs in basic education, meaningful infrastructure, and good governance. Only by addressing these binding constraints to development will the welfare of the underserved in our society be effectively ameliorated.
Action for Economic Reforms
Coalition Against Corruption
Makati Business Club
Management Association of the Philippines
Transparency and Accountability Network
Statement on The Big Fish Project
15 April 2008– As we reported on the work of its members earlier in today's program, the Coalition Against Corruption is making steady progress. We have been operating as a movement for nearly four years. We believe it is time to raise our targets while continuing to lay the groundwork for building a culture of antipathy for corruption in the local communities.
In launching the "Big Fish" project, we are determined to address the type of corruption that has become more pronounced at high levels of government. We are setting realistic goals for ourselves by first laying the groundwork for achieving that objective. We may or may not reel in the big fish in the next two years because of existing conditions, but when those conditions allow, it will be much easier to finally land one.
We call on anyone with reliable information to cooperate by offering your knowledge of a corrupt act to the lawyers who will preserve evidence that may be used at the appropriate time. We call on everyone who wishes to remove this blight on our society to contribute to this effort by donating whatever amount you wish, to a restricted fund, the Governance Investment Fund for Transparency (or GIFT) that will lead to the prosecution of a high official guilty of corruption.
Joint Statement on the Malacañang Cash Giveaways
30 October 2007 – Pampanga governor Ed Panlilio's revelation that he was given a bagful of cash amounting to P500,000 at an official function at Malacañang is concrete proof of what we have long suspected - that corruption is endemic in the “transactional politics” being practiced by many of our public officials.
Public officials must be above suspicion and must always be forthright and transparent. Receiving cash in a bag, without documentation, is claimed as routine and normal. No amount of claims that it is “normal” will make it acceptable to the citizenry. Former Manila mayor Lito Atienza's admission that he regularly received cash from Malacañang raises many questions. How much cash has been received by elected officials over the years? Has it all been accounted for and publicly reported?
The delay in President Arroyo's instruction to both the Presidential Anti-Graft Commission and the Ombudsman to investigate Governor Panlilio's revelation is disappointing. Even more of an affront to the intelligence and sensibilities of the citizens is the response of the League of Provinces of the Philippines (LPP) 13 days after the fact, claiming responsibility for the cash giveaways. Unless the LPP can back up its claim with solid documentary evidence, the public will remain unconvinced of its supposed role in the whole sordid affair.
If President Arroyo wants public perception to turn positive, she should appoint an Independent Commission, composed of people whose reputation for integrity and independence are unquestioned, to look into the claims of the LPP, ascertain where the money actually came from, and why such a thing can occur. The results should immediately be released to the public.
The Anti-Money Laundering Council should take action and make a determination of the nature and origin of the money that was handed out in the Presidential Palace.
How the President handles this controversy will either give credence to her claims that she is serious about fighting corruption or feed into the festering feeling that corruption continues in high places.
Filomeno Sta. Ana III
Coordinator, Action for Economic Reform
Vicente Paterno
National Co-Chairman, Bishops-Businessmen's Conference for Human Development
Ma. Aurora Tolentino
Chairperson, Caucus of Development NGO Networks
Gordon Alan Joseph
President, Cebu Business Club
Greg Fernandez
Coordinator, Central Visayas Network of NGOs
Jose Cuisia Jr.
Chairman, Coalition Against Corruption
Fr. Nono Eyule
Chairperson, Coalition for Bicol Development
Marietta Paragas
President, Cordillera Network of Development NGOs and POs
Fr. Carmelo Diola
Coordinating Steward, Dilaab and Barug Pilipino
Paulina Lawsin-Nayra
Coordinator, Eastern Visayas Network of Development NGOs
Abelardo Cortez
President, Financial Executives Institute of the Philippines
Felipe Medalla
Chairman, Foundation for Economic Freedom
Alberto Lim
Executive Director, Makati Business Club
Albert del Rosario
Chairman, Management Association of the Philippines
Ma. Theresa Perez
President, National Council of Social Development
Annie Cynthia Corpin
Chairperson, PhilDHRRA
Benjamin Tolosa Jr.
Convenor, Puwersa para sa Ganap na Demokrasya
Vincent Lazatin
Executive Director, Transparency and Accountability Network
Emmanuel Areno
Coordinator, Western Visayas Network of Development NGOs
Hasten investigation on the lamp post scam
10 July 2007 – The purchase of overpriced lamp posts in Cebu is a clear violation of law, if proven to be true. The Coalition Against Corruption (CAC) urges the Ombudsman to hasten its investigation of the case.
CAC is a nationwide alliance of NGOs, social action centers of the Church and other civil society organizations. The coalition's call to speed-up the investigation was made in solidarity with its member, Barug Pilipino and with the people of Cebu.
"We express our moral outrage over the ridiculously priced ASEAN lampposts, symbolizing moral death and utter disregard for the dignity of citizens. We must hold government accountable. As stewards of the people's money, they are answerable to us vigilant citizens. The Cebuanos deserve better roads and street lights," says Fr. Carmelo Diola, head of Barug Pilipino, a member organization of the CAC.
Coalition chairman Jose Cuisia, Jr. said: "The Coalition Against Corruption supports the citizens of Cebu in their quest for justice and in making public officials accountable. We hope that the Ombudsman will hasten the completion of the investigation of this case."
CAC also requests the Ombudsman to ensure that honest and capable people are assigned to the investigating team.
Statement on corruption in the military
6 December 2004—The facts uncovered in the case of General Carlos F. Garcia in the last few weeks appears to point to unexplained wealth on the part of an officer in a sensitive position. The government and the military must now relentlessly and vigorously proceed with a full investigation and appropriate judicial proceedings. These must be done in a transparent and impartial manner, with the public kept informed on the status of the case.
The quick resolution of the case is important because it involves public funds and taxpayers’ money which should have been used for the procurement of military equipment and supplies. If such monies have indeed been diverted to line the pockets of military officials and contractors, it is our soldiers in the field who will be equipped with substandard military equipment and supplies. Under such conditions, our soldiers are exposed to extreme dangers. It will be extremely difficult for them to win the war against insurgents and terrorists.
This case is important also because it seems to validate what everyone perceives about corruption in the military. If not resolved in a speedy and impartial manner, it will result in the total loss of faith by the public in an institution which we count on to defend the Constitution and the Nation. This erosion of the credibility of the military has been exacerbated by sweeping generalizations and irresponsible statements attributed to politicians who have not substantiated their claims.
Indeed, this has been cited time and again as one of the reasons for the demoralization of our younger, idealistic men and women in uniform and has been used to justify coup attempts in the past. The Feliciano Commission Report indicated the existence, if not the extent, of corruption in the military. Numerous other studies funded by international financial institutions all point to cases of corruption and the corresponding losses to the government.
Once again, it is an opportunity for the government to clearly prove that it is serious in its efforts to rid our country of graft and corruption. This case, because of its high profile and the seemingly clear evidence of unexplained wealth of General Garcia and his family, will be seen as a test case for the government of President Gloria Macapagal-Arroyo, who is also the Commander-in-Chief of all our armed forces.
We ask the government to mount an all-out effort to prosecute General Garcia’s case, and all other cases of graft and corruption that stand before it, to a speedy and just conclusion. The government’s failure to act swiftly and decisively on this case will be tantamount to granting government officials and civilian contractors a license to steal. And any future statements about reforms and good governance will ring hollow and false.
Bishops-Businessmen’s Conference (BBC)
Catholic Bishops Conference of the Philippines – NASSA (CBCP-NASSA)
Caucus of Development NGOs (CODE-NGO)
Makati Business Club (MBC)
National Citizens Movement for Free Elections (NAMFREL)
Transparency and Accountability Network (TAN)
