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April 21, 2016

WANTED: A New Breed Of Local Government Executives

At the local levels, we need a new breed of local chief executives (LGEs): those who can live within their means, those who are willing to observe the ‘hard budget’ constraint.

With a higher grant from the central government, called the internal revenue allotment (IRA), local authorities never had it so good. The IRA is more than enough. In 2006, it was P166 billion. In 2016, it rose to P465 billion, an increase of 180.1 percent over ten years.

The IRA is given to local government units (LGUs) with practically no any strings attached. In return, local authorities are supposed to live within their means, to operate within a hard budget constraint.

The essence of having a formula-based and automatically released IRA is to develop a cadre of independent-minded local officials with a backbone, less subject to the whims and caprices of Imperial Manila.

Making local governments less dependent on the central government was one of the legacies of the late President Aquino. No other politician would do what she did (make local governments autonomous), but she was not like most politicians.

In return, candidates for local posts should know how much IRA their respective local government unit (LGU) is entitled to, and how much internal tax may be generated, assuming local authorities have the political will.

If a candidate for local chief executive (governor, city mayor or municipal mayor) feels that he can’t live within the expected public resources, then he shouldn’t run for public office. He should make the post available to those who are able and willing to operate within the expected government resources.

By contrast, Mr. Aquino’s legacy is to make LCEs more dependent on the central government, first through Bottom-Up-Budgeting, a discretionary grant to LGUs, and second, by hi-jacking the multi-billion local infrastructure program.

The Bottom-Up-Budgeting (BUB), which started as an experimental grant to poor LGUs, has grown exponentially in less than four years. It now carries an appropriation of close to P30 billion and covers practically all LGUs.

The Aquino administration has preferred to rule under a shroud of darkness. Opaqueness has replaced openness in government transactions. The Freedom of Information bill, which Mr. Aquino promised during the presidential campaign in 2010, remains stuck in Congress.

A crucial budget reform that remains stalled is the proposal to limit the power of the president to impound appropriations—namely, “An Act Regulating the Power of the President to Defer, Rescind, or Reserve Expenditure of Appropriations Authorized by Congress” This is relevant in light of alleged abuses of the power to augment on the part of the executive branch. Impoundment refers to the executive’s refusal to release funds authorized by Congress, for whatever reason. Such power is open to abuse, as alleged by complainants in the DAP case.
It is ironic that both President Aquino III and Department of Interior Secretary Mar Roxas, when they were senators, had supported a version of the budget impoundment control act. Then senator Aquino filed Senate Bill 2995 or the “Budget Impoundment Control Act”, while then senator Roxas filed Senate Bill 2996 or the “Budget Reform Act of 2009.” Now that both are in a position to push for this vital budget reform, however, they have decided to keep quiet.

The political reality is that for most politicians, where they stand on key issues mostly depends on where they sit.

What we need in the 2016 elections are candidates who will strengthen political institutions. Sadly, 30 years after EDSA 1, the process of choosing political candidates remains crude. They’re not selected through a formal filtering process conducted by political parties, largely because political parties, strictly speaking, are non-existent. Candidates are chosen based on popularity as determined by two major polling organizations: the Social Weather Stations and Pulse Asia.

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