THERE’S NO making nice about this: when the shit hits the fan, the squall and stench are sure to rub off on everyone.
And so it is with pork barrel, the P25-billion annual tab on taxpayers that, says a former senator who had seen it at work, has turned the government into “a big, big mafia” or “syndicate,” a grand conspiracy of executive and legislative agencies fused in circles of kickbacks, corruption, patronage politics, and wasteful spending.
That means President Benigno Simeon C. Aquino III, and officials of the executive agencies, government corporations, and local government units that are the funds conduit and implementing agencies of pork projects, would be hardpressed in evading blame for the financial and political mess that pork has become.
President Aquino has so far said nothing about eschewing pork. Before he became a politician, he said he had thought pork to be “total graft, useless” until village leaders told him they value politicians who deliver projects for their constituents’ welfare. Pork, he said, could serve as “a great equalizer.”
Yet while recent news reports of billions of pesos lost to pork have reignited the public clamor for its abolition, it’s almost a cinch that pork is here to stay.
Pork, which also goes by the fancy name Priority Development Assistance Fund (PDAF), was supposedly conceived for a publicly good purpose: assure “equity” in access to public funds for pet projects identified by senators and congressmen, on their constituents’ behalf. In official speak, an equalizer.
That is pork in theory at least. But as early as June 2012, in an interview with PCIJ, Budget Secretary Florencio Abad himself had acknowledged that the context of pork is “patronage politics,” and the logic that drives the selection of projects and the disbursement of many politicians’ pork funds, “pautakan lang ’yan” or “just play it smart.”
Twenty years since pork evolved from one to another name (it was called Congressional Initiative Allocations, and then Countrywide Development Fund earlier), Abad said he does not know for sure how much or what impact pork has had on poverty alleviation. Neither is he aware, he said, of any government studies to assess whether pork has done good or bad by the poor.
In a recent report, the Philippine Daily Inquirer newspaper said that five senators and 23 members of thte House of Representatives — mostly political rivals of the ruling coalition — had funneled their pork shares into bogus nongovernment organizations (NGOs) they had allegedly handpicked, through certain government-owned corporations, and supposedly in exchange for handsome commissions.
From 2011 though, based on Commission on Audit reports, other newspapers and news websites had exposed similarly irregular pork projects involving some of the same NGOs and government corporations, but involving lawmakers from Aquino’s Liberal Party and its political allies.
Aquino has called for a “full, fair, and impartial” investigation of the latest reports, even as his deputies have backed off from proposals to scrap pork. Abad, meanwhile, has said that in the 2014 national budget, all pork allotments will be enrolled as a separate expenditure item. That is how it has been done for the 2013 budget, in fact.
Bailiwick gets bulk
Such token efforts at transparency miss the main vein of corruption in pork: a roundabout and porous system for project implementation that diffuses accountability in the use of public funds.
Pork has, by all accounts, remained a largely political carrot-and-stick measure of the Aquino government. It has guaranteed the steady flow of pork to political allies, but also a drought of pork to some opposition lawmakers. In Abad’s own words during the PCIJ interview, pork is to the government a matter of “historical justice” vis-a-vis political friends and foes.
A compromised concept from birth, pork runs on bastardized rules of budgeting and procurement, and feeds on the broken politics of give-and-take between executive and legislative officials, and between political parties.
Pork is disbursed on a lawmaker’s say-so, even with no planning, feasibility study, or field verification of what projects, products, and services the poorest and remotest communities need the most.
Rather than assuring “equity” in access to public funds among all towns and cities, the disbursement of pork funds since 2010 has shown a skewed pattern: the more affluent bailiwicks of lawmakers have secured bugger and bigger amounts, while the least affluent and least vote-rich districts, just morsels.
In a PCIJ interview last year, then Senator Panfilo ‘Ping’ M. Lacson, who decided to forego his pork share starting 2001, said that implementation was the seamiest and most problematic side to pork projects.
“The devil is in details,” he said. “(Less) than 50 percent, at least at that time actually went to the programs of work. And more than 50 percent went to the many deep pockets of corruption.”
Lacson added, “It’s a big, big mafia or syndicate involving the executive and legislative branches of the government.”
From personal experience and research into pork, Lacson said, “the standard commission of a legislator is 20 percent.” But he also said, “Depending on the insatiability of the legislator concerned, it could go as high as 50 percent, that is, for the most greedy really.”
That table of kickbacks, however, covers only the “hard” or infrastructure projects that should be allotted at least half a lawmaker’s total pork share. The “soft” projects, including the purchase of school and health supplies, livelihood assistance, among others, “that is the worst…. the commission (is) from here to eternity, without limits,” Lacson said.
Yet worst than worst, Lacson said that sometimes ghost projects are all that the intended beneficiaries get, and “it’s all just paper work.” Quite often, he said, “the only perfectly legal portion of PDAF” are the taxes and the profit that a project contractor pays and gets, “which is about not more than 14 percent.”
By Lacson’s estimate, minus all the deductions for kickbacks, typically 50 percent of all pork funds — or about P13.5 billion of the annual program budget for all lawmakers — is what might be called the good pork that translates to some service to the citizens.
Under the pork system, the known tasks of lawmakers are only to identify what projects they want funded at the start and monitor and sign on to project completion, at the end. Of course, in between they get to plaster their names and faces on project tarps or propaganda, to make sure voters remember them come election time. Whatever else lawmakers do, or how they exact commissions from pork funds, are secret, typically paperless transactions.
But the hard work, and responsibility, to roll out pork projects — and thus the culpability for deals gone awry — are unwanted tasks that the Aquino government has imposed on executive agencies.
While lawmakers feign generosity through pork, the budget department “downloads” the funds to executive departments, government corporations or local government units that are the “implementing agencies” of pork projects. They are tasked to bid and award, and implement a multitude of largely small contracts, on top of their many other regular duties. They don’t get to choose or evaluate pork projects; they just have to make sure the lawmakers could continue bragging about them.
Two Cabinet secretaries, Rogelio Singson of Public Works and Corazon Soliman of Social Welfare, in interviews with PCIJ, said that if they had a choice, they would not want their agencies to serve as conduits for pork funds. Their agencies and officials, after all, could be held to account for all that could go wrong with the projects they did not even propose or choose.
In pork’s case, it would take more than a whistleblower’s testimony to pin down the lawmakers who allegedly took out kickbacks from tainted deals. Their only exposed roles in the pork system are to identify their pet projects, monitor implementation, and claim personal credit for the projects and cash doles dispensed through pork.
In big graft-ridden deals such as the P2.57-billion Malampaya funds mess, state auditors took to task only the small fish — local officials, state accountants, members of the bids and awards committees, and the contractors. They were those who signed on to and rolled out a total of 489 civil works projects mostly similarly priced and awarded to a few favored contractors, but excluded the lawmaker and national officials who conceived the scheme.
Binay’s P200-M pork
Still, Abad has asserted that the government has served the ends of transparency by uploading online the list and the revenue allotment orders covering the pork projects of lawmakers, on the e-TAILs page of his department’s website.
But the Department of Budget and Management (DBM) has yet to publicly disclose how Vice President Jejomar C. Binay disburses his own pork share. Although he was not elected to Congress and should not have pork funds of his own, Binay has bagged P200 million as his very own annual pork kitty.
On lobbying by administration and opposition senators in 2010, President Aquino granted Binay’s request for pork. At first, Binay’s allotment appeared as a sentence in the 2012 national budget’s section on PDAF and was disbursed by DBM. In the 2013 budget, Binay’s pork has been imputed in the agency budget of the Office of the Vice President.
Binay’s annual pork is equivalent to what,each of the 24 senators is entitled to get as pork shares every year. Lacson and Senator Joker P. Arroyo are the only ones who have refused to avail themselves of the funds.
Pork is good, in fact, heaven-sent almost, but only for political clans with multiple family members in public office.
Binay’s eldest child, Ma. Lourdes ‘Nancy’ Binay, will now also get her own P200-million pork as a new senator, while younger daughter Mar-Len Abigail, another P70-million pork as a district representative from Makati City.
That is at least P470 million of pork funds every year that the Binays could spend on whatever projects they wish to enroll on their lists.
Yet best of all, pork mixed with internal revenue allotment (IRA) is a grand slam. Binay’s only son Jejomar Erwin S. Binay Jr. is mayor of Makati City, which in 2012 alone obtained P708.3 million in IRA. The combined state resources under the Binays’ control amount to a staggering P1.178 billion a year, nearly P100 million a month or P3.3 million a day. And that is even net of the agency budgets of the respective offices they occupy.
A windfall of pork is now also the good fortune of other political clans with hands in both executive and legislative offices, notably the Estradas and Gomezes, the Marcoses, the Cayetanos, the Belmontes, and their clones in the regions.
In the House of representatives, each of the about 280 district and party-list representatives is also entitled to P70 million in annual pork — except that DBM tends to give more and quicker fund releases to the President’s allies, and less to some opposition lawmakers.
More pork-like funds
Aside from an unprecedented gift of pork to Binay, Aquino and Budget Secretary Abad have also introduced additional pork-like lump-sum funds in the national budget, beginning 2011, the first Aquino administration budget.
In the General Appropriations Act for 2013, according to University of the Philippines Professor and former national treasurer Leonor Magtolis Briones, about P317.5 billion in special purpose funds or SPFs and P117.5 billion in unprogrammed funds had been proposed. Nearly all had been approved in the enacted budget.
Because these are “not as detailed and specific as the budget proposals of regular agencies,” Briones had warned that these “are vulnerable to reductions, transfers, and ‘adjustments’” since these are lump-sum funds.
The biggest tickets are the Budgetary Support to Government Corporations for P44.1 billion, Special Financial Assistance to Local Government Units (LGUs) of P17.5 billion, Miscellaneous Personnel Benefits Fund of Ph70 billion, Retirement Benefits Fund, P70 billion, and Priority Social and Economic Projects (PSEP) Fund for P22.4 billion.
The amounts are even net of the 40 percent of national taxes that are automatically appropriated to LGUs as their IRA shares. The Philippines has 80 provinces, 143 cities, 1,493 municipalities, and 42,028 barangays. In 2011, their composite IRA reached P286.9 billion. This dipped to P273.3 billion in 2012, but soared again to P302.3 billion in 2013.
Aside from these direct transfers to LGUs is the massive Conditional Cash Transfer (CCT) program that the Aquino government has revved up multiple-fold in the last two years. From only P21.2 billion in 2011, the CCT budget coursed through the Department of Social Welfare and Development (DSWD) has more than doubled: P44.3 billion in 2013.
Meanwhile, the P17.5-billion Special Financial Assistance to LGUs includes P15.8 billion in “Special Shares of Local Government Units in the Proceeds of National Taxes,” the P1.5 billion budget of the Metropolitan Manila Development Authority, P200 million in “Local Government Support Fund,” and P50 million in “Barangay Officials Death Benefits Fund.”
The P22.4-billion PSEP Fund is a new expense item in the 2013 budget. It kicks in as a new pork-like fund that has been split among certain departments for such programs as “Health Facilities Enhancement” (P13.5 billion), “Public-Private Sector Strategic Support Fund” (P1.5 billion), and “Various Programs/Projects of LGUs” (P1.7 billion), and “Support for the Bottom-Up Budgeting Process (Empowerment Fund, P250 million),” among others.
A kitty for CSOs
Now consider just the “Empowerment Fund,” supposedly created to support “community organizing” by CSOs. The Fund has been lodged in the agency budget of the Department of the Interior and Local Govenrment (DILG) that is now headed by Secretary Manuel Roxas II, LP president and, by all indications, also LP’s candidate for president in 2016.
As of June 2013, DILG has yet to finalize guidelines on the use, disbursmeent, and audit of the Fund that was first lunched in 2012 when some amounts were disbursed on strength of certain memoranda of agreement signed between certain CSO networks and the National Anti-Poverty Commission.
Because the amounts involved are public funds subject to COA audit rules, the draft guidelines states that small community organizations may access the Fund only through big, national CSO consortia that are seen to have some capacity to account for the money. Halfway through 2013, no CSO has supposedly availed itself of the Fund yet, according to DBM officials.
The Fund, in theory, has a good goal: finance community-organizing activities by CSOs so they may hold government agencies accountable. Yet not too many national and local officials, and perhaps even fewer legislators who passed the 2013 budget, are familiar with the Fund and its rationale because they are reportedly not involved in its implementation at all.
These lump-sum funds are all net of other special purpose funds under the President’s control. He alone may trigger the release of funds from such multibillion-peso lump-sums like the Contingency Fund, Calamity Fund. Disbursement records on these funds have hardly been published online or disclosed to the citizens, despite repeated requests.
Economists and public finance experts agree that like pork, these funds are problematic per se because these are vulnerable to abuse, difficult to document and audit, and with accountability hard to establish.
Half the total
In 2010, the year Aquino came to power, highly discretionary SPFs and lump-sum funds constituted 57 percent of the entire national budget of his predecessor, Gloria Macapagal-Arroyo. In 2011, the first budget he submitted to Congress, Aquino retained and grew most of the same funds. By most estimates, SPFs and lump-sums constitute still over half the P2.961 trillion national budget for 2013.
Also in 2011, Aquino requested P1.45 billion in “confidential and intelligence funds” or CIE for the Office of the President and 21 other executive agencies. Congress gave him P1.2 billion, slightly less than the P1.3 billion that Arroyo requested in 2010.
As a congressman and senator before becoming president, Aquino had railed against confidential and intelligence funds that are not subject to regular audit rules. He had filed resolutions seeking congressional oversight over the disbursement of such monies.
To make matters worse, because the government is so swamped with work, it has had to mobilize NGOs to take on tasks and funds to implement projects and services. Both large and unwieldy clusters, public agencies and NGOs have engaged in a veritable love-hate, need-want relationship over the last 20 years.
The rise of bogus NGOs on one hand, and the failure of public agencies to regulate and monitor the sector well on the other, have sullied the partnership in the case of many pork-funded projects.
A bevy of NGOs
In the Philippines, the NGO or CSO world is a multi-layered matrix of groups with both common and contrasting purposes.
A 2011 study assisted by the Australian Agency for International Development (AusAID), “Civil Society Organizations in the Philippines, A Mapping and Strategic Assessment,” paints the country as a virtual playground of CSOs.
The study edited by Lina N. Yu Jose lists about a dozen large national networks of area-based NGOs, over 80 corporate-based national networks and foundations, thousands more based in the provinces, hundreds focused on issues or policy advocacies, a dozen giving out local funding, and tens of thousands more of people’s organizations, socio-civic groups, cooperatives, workers’ unions, and citizens’ associations.
A 2008 study by the Caucus of Development NGO Networks (Code-NGO), one of the largest corsortia, said that by 1997, there were “around a quarter of a million to half a million non-profit organizations in the country.”
More than half the half a million total “was registered with national government agencies and were accredited by local government units,” said the Code-NGO study, “NPO Sector Assessment: Philippine Report prepared for the NPO Sector Review Project, Charity Commission for England and Wales.”
It added that by 2008, the “registered organizations” included, by legal type, “around 89,000 non-stock corporations, 70,000 cooperatives, 5,000 homeowners associations and 15,000 workers organizations and trade unions.” It also said that there were “about 70,000 people’s organizations registered with the government in the late 1990s.”
Mostly organized by the middle class to assist marginalized sectors and the poor, majority of these NGOs are cash-strapped. By 2008, the Code-NGO study said, most of the non-stock organizations had only P100,000 in annual income and expenditures, and P750,000 in assets and liabilities.
The AusAID study, for its part, noted a decline in community-organizing activities, a great dependence on declining amounts of foreign and local donor grants, and a growing number of corporate NGOs and foundations, among recent trends in the NGO community.
It also cited a common concern that NGOs with creditable record had raised: “Vulnerability to control by politicians and political groups.”
Said the study: “NGOs are vulnerable to intervention by politicians and political groups that have set up non-profit groups as tools to deliver services and goods to their constituents. There are also indications that NGOs have been used to divert state and foreign donor funds to political groups.”
A two-day national conference in 2010 among NGO leaders provoked differing views on questions that stare at the core of NGO existence. These include matters like NGOs “filling in the gap of government in providing social services” and “maximizing spaces within government processes” for “development effectiveness” and “sustainability.”
Quite unwieldy, too
If NGOs are an unwieldy mass, so, too, are government agencies dealing or working with them.
For various purposes, NGOs register with or seek accreditation from various public agencies like the Securities and Exchange Commission; the departments of the Interior and Local Government, Public Works and Highways, Social Welfare and Development, Budget and Management, Environment and Natural Resources, Agriculture, Agrarian Reform, Labor and Employment, among others; as well as with other executive agencies like the Bureau of Internal Revenue, Housing and Land Use Regulatory Board; and local government units.
The bounty of records on or about NGOs is not something consolidated, current, or shared between and among these agencies, allowing bogus and fly-by-night NGOs to cut corners with the law and secure pork and other public funds.
The failure of the pork system to deliver on its promise of equity and growth in the farthermost towns can thus be nothing less than a conspiracy of many parties and failures — the preponderance of highly discretionary lump-sum funds, the rule of pork as “historical justice” to political friends and foes, less than rigid monitoring and oversight by public agencies of NGOs being engaged to roll out pork projects and services, and sheer and simple greed by those who would pocket money, whatever its color and purpose is.
And if the “big, big mafia” and “syndicate” that the pork barrel system has become looks like it will linger for much longer, it would be because the President and his political allies want it to stay.
The problems are grand but the solutions simple: get the big fish, not just the small fry, for gross corruption, abolish pork, and do away with other lump-sum and special purpose funds.
It takes a President to make that happen. Today President Aquino delivers his fourth state of the nation address, with possibly repeat promises of “rapid, inclusive growth,” a bevy of civil works projects just done or to be rolled out, and a pledge to leave a legacy of “matuwid na daan” with both corruption and poverty stamped out.
Pork remains the biggest bump in that road. — With additional research by Karol Ilagan and Rowena F. Caronan, PCIJ, July 2013