Handurawan: Public Policy and Public Finance

Handurawan: Public Policy and Public Finance

”Handurawan” is a Visayan word for reflection. I am writing this column in my home in Valencia, Negros Oriental (right beside Dumaguete City) which I have named “Handurawan sa Valparaiso.” Indeed, the town of Valencia, one of the loveliest municipalities in Negros Oriental is paradise on earth. My home, surrounded by trees and flowers, and constantly visited by birds and butterflies, is right beside a river. The sound of rushing water is the first thing I hear when I wake up in the morning. Its murmurs and gurgles lull me to sleep at night.

It is good to start a column in a place like Handurawan sa Valparaiso. Myriad shades of green from trees, grass, and water help clear away the cobwebs of city life and sweep away the accumulated dust and dirt of conflict, lies and untruths. Yes, it is the perfect place for reflection.

Remembrance of things past
Childhood experiences have a way of coming full circle. I grew up in the town of Guihulngan, Negros Oriental where my parents were poor school teachers. My father was the distributor of The Manila Times and the Philippines Free Press. As an eight-year-old child, I used to clamber aboard buses which passed by our town and sell newspapers. For much of my life The Manila Times was the only daily paper I ever read. I carried The Manila Times habit until my family moved to Dumaguete and I studied in Silliman University. That is, until Martial Law was declared and newspapers were closed down.

That was sixty-five years ago.

I can probably say that my lifetime interest in public policy and governance was partly shaped by my Manila Times habit.

Public finance or public penance?
I was advised to write about public finance and make it understandable to the reading public.

Public finance is all about the inflow of financial resources to the government and the outflow of material and financial services to the public, for the attainment of the public good. In the case of the Philippines, public finance funds the attainment of development goals.

There are probably three questions which can be raised about public finance. Many well-informed readers already know the answer but it is good to repeat them. First: Where is the money coming from? Obviously, it is from taxes and other revenues (incomes) of government. When we talk about taxes, many believe that only those who file income taxes contribute to the revenues of government. In the 2014 budget, net income taxes are estimated to amount to only P853.200 billion out of a spending program of P2.268 trillion. Every one pays value added taxes and other indirect taxes—rich and poor, including the newly born and the dead, the employed and the unemployed. Thus, the obvious answer to this question is that government’s money comes from the people, whatever kind of taxes they pay.

The second question is: Where does the money go? Theoretically, the financial resources which are remitted to government are converted into economic and social services which flow back to the people. It is about inflow of financial resources from the people and outflow of funds in the form of services to the people. However, it is clear that not all the people benefit from the services of government. It is equally clear that financial resources from the people are hijacked, waylaid and diverted not to the many, but to the very few.

The third question is: Who makes the decisions on the allocation of funds? Again, the answer is obvious. The executive branch of the government prepares the budget and proposes the allocation of funds coming from the citizens. The legislative branch approves the budget proposal and passes it into law. A related question is: Do the people have any participation in the decisions regarding the allocations in the budget? The usual answer is that there is no need for them to have a say in the budget because their interests are represented by both branches. However, more and more people are reaching the conclusion that the budget does not respond to the urgent needs of the people, many of whom are poor. The never-ending diet of scandals, scams, ghost projects, and thievery fed by media to the public has confirmed its worst suspicions.

Why the delayed outrage?
I have often been asked by media why citizens are in such a rage over Napoles, PDAF, Malampaya Fund and DAP even as more scams are threatening to come out of the woodwork. Surely, the public has known all these decades that PDAF is pockmarked with corruption? Surely, it is common knowledge that politicians and executing agencies share in “S.O.P.” which is the polite word for corruption? Haven’t they heard those stories about abuse of the Malampaya Fund?

All the above is true. The public knows that 20% and in some instances, 50% of project costs go to corruption. However, documented information that as much as 100% goes to politicians and their partners have pushed public outrage to near tipping point. It is one thing to listen to gossip and speculation. It is another thing to hear about truckloads of documents, read official reports and listen to witnesses tell their horror stories.

Furthermore, learning from audit reports three or four years later, that they were robbed, makes the public feel cheated. Finally, while the business sector and professionals are vigorously pursued by the Bureau of Internal Revenue, the knowledge that their tax contributions go to corruption further fuels resentment and anger.

More and more tax payers are demanding, Pera ng taongbayan, para sa taongbayan!

(The same contribution was publishd in November 4, 2013 issue of The Manila Times.)


Leonor Magtolis Briones

Accounting (2008);

Professor Briones is the first nominee of the Kaakbay Partylist. She is former National Treasurer of the Republic of the Philippines. An Outstanding Sillimanian in the field of Fiscal and Public Administration, Professor Briones serves Silliman University as Chairperson of the Board of Trustees. She holds a Post-Graduate Diploma in Development Organization major in Public Enterprises and a Certificate in Policy for Public Enterprise from Leeds University in England and the Harvard Institute for International Development, respectively. Presently, she is professor at the National College of Public Administration and Governance at the University of the Philippines. Professor Briones maintains a regular column, “Boiled Green Bananas, ” in the Business Mirror.