IT is basic economics that, in a global recession, when net exports are negative, the best counteractive move that an affected economy can make is to increase “absorption”—expanding consumer spending, domestic investments and government expenditures. For developing countries like the Philippines, it is best to direct the increased government expenditures to the expansion of productive capacity.
The Aquino administration’s request for a P22.4-billion supplemental budget is, presumably, for increasing absorption, except that the projects covered by it are unrelated to the enhancement of the economy’s productive capacity. Plus, these projects seem to lack a central purpose. We can infer this from some of the questions asked by some members of Congress:
• If the projects included in the supplemental budget were that important, why were they not included in the 2015 General Appropriations bill?
• What’s so urgent about the hiring of 294 former rebels as guards under the National Greening Program; the renovation of the Department of Finance office; the construction of the Bohol Provincial Capital; the retrofitting of the Presidential Management Staff building; and the payment of Priority Development Assistance Fund projects that have been discontinued or completed?
• Why should the Department of Social Welfare and Development need P1.942 billion just to update the list of families in the poverty-reduction program?
• With respect to Light Rail Transit lines 1 and 2, why request for funds that have already been included in the 2014 and 2015 national budgets?
• On the P2.833 billion requested for the operational transformation plan of the Philippine National Police: Why is this plan so expensive? What exactly is it about?
• On the P1.849 billion being sought to cover obligations arising from the implemented projects of the Department of Public Works and Highways: What are these supposed projects?
• With regard to the P7.999 billion requested for the construction of permanent housing for the survivors of Supertyphoon Yolanda (international code name Haiyan), why don’t you first account what happened to the tens of billions of pesos already appropriated for this purpose, as well as donations from the international community?
These are serious questions that deserve serious answers. More to the point, why were the requested funds not directed to projects that can enhance the economy’s productive capacity, for instance, to the so-called FIELDS (Fertilizers, Irrigation and Infrastructure, Extension, Education and Training Loans, Dryers and other postharvest facilities, and Seeds) program of the Department of Agriculture; the so-called One Town, One Product program for local governments; or the increase and improvement of tourism facilities?
As matters stand, this is likely to become another case of missed opportunity—the failure to use resources for the improvement of the economy’s productive capacity when there is the opportunity to do so.
We hope the supplemental budget is reconceptualized and redirected. If it is refocused on the expansion of our economy’s productive capacity, it will unambiguously benefit Filipinos.
Image credits: Jimbo Albano