Budgeting: A Tool for Reforms

Last Saturday (Dec. 2nd), I had the rare opportunity to speak before the class on the masteral program of the Ateneo School of Government. The students all 24 of them are officials and employees of Iloilo City, three of whom are Sangguniang Panlungsod members - Kagawads Jed Mabilog, Ely Estante and Armand Parcon.

The class was mainly handled by my former Boss, retired Usec. Cynthia Castel. My topic was about "Budgeting as Tool for Reforms". I began my presentation with brief and practical descriptions of what budgeting is. That it is a document containing words and figures with price tags attached; a prediction linking financial resources and human behavior. Usually, there is a tendency on the part of department heads to "satisfice" (to borrow the term popularized by Aaron Wildavsky), meaning "satisfy and suffice" that is, if they can't get all the funding that they want, they must as well get all that they can.

Budgeting is also contract between the local chief executive, sanggunian and local finance committee on one hand; and the department heads on the other. The former promise to produce the money to finance the planned expenditures under specified conditions, and the latter commit to implement the programs and projects or deliver the services to the public. I also underscored the reality that budgeting is at the heart of the political process, and that it records the struggle between the executive branch and local legislature over control of funds, over whose preferences will prevail. While this seems to be a democratic form of check and balance as enunciated in the Local Government Code, its effect if no agreement is reached between both branches of government, is detrimental undermining socio-economic development at the local level. Of course this situation does not only happen in LGUs. We have, in the past several years, witnessed this impasse between the Executive branch and Congress, eventually leading to a re-enacted budget, underspending and under delivery of basic services.

The challenge that I posed to the students is how they would reconcile the kind of budgeting that we are pushing (basically, performance budgeting) with political budgeting. The extent to which performance based budgeting will succeed in LGUs would depend on whether or not politicians care about outcomes and outputs. More of my lecture will be posted next time.