Gyver G.

Garcia

BSA-IVB

Fiscal Reforms Introduced by the Aquino Administration

Legislation Passed
The Aquino administrations relentless campaign against corruption in public institutions
has been backed by legislation, to ensure that reforms geared toward fighting corruption
and poverty would be irreversible and sustainable.
The Governance Commission for Government Owned or Controlled
Corporations was created in 2012, in an effort to curb excesses in the sector and to
ensure that GOCCs are managed in a transparent, responsible, and accountable
manner; and with the utmost degree of professionalism and effectiveness.
Three laws were enacted to strengthen the countrys fight against transnational
criminality and terrorism:
Ex Parte Application of Court Order, which grants the Anti-Money Laundering Council
authority to undertake ex parte inquiry into suspicious financial transactions after
securing court approval without the need to inform the suspects;
Republic Act 10365, which amended the Anti-Money Laundering Act to include the list
of covered institutions and transactions;
Terrorist Financing Suspension Act of 2012 that defined the crime of terrorism
financing.

FISCAL MANAGEMENT

Prudent policies, founded on sound management principles, have allowed the national
government to improve the Philippines fiscal position. Reforms in the 2013 national
budget of the Aquino administration have accelerated the delivery of priority programs
for inclusive growth, particularly investments in infrastructure and funding for social
services. In the process, critical measures have been put in place to further strengthen
the Philippine economy.
GovernmentSpending.

The national budget for FYs 2011, 2012, and 2013 were
enacted before the yearly deadline, which gave government agencies time to properly
implement projects within the set timeline, thus avoiding costly delays. In 2012, the
national government increased expenditures by 14.1% or to P1.56 trillion, compared to
the P1.2-trillion level in the same period of the previous year. This rise in government
spending was a factor in the rise of the countrys GDP in 2012; it ignited a cycle of better
infrastructure, leading to more investments, and generating more jobs.
Spending on maintenance and other operating expenditures (MOOE) grew to P97.9
billion in the last four months, registering a P22.8 billion or 30.4-percent increase from
last years disbursements. The governments spending on preparatory activities for the
2013 national, local, and ARMM electionsas well as increased provisions to cover the
Department of Social Welfare and Developments (DSWD) Conditional Cash Transfer
Program and the National Statistics Offices (NSO) conduct of Census of Agriculture and
Fisheriesare credited for the disbursement jump.
Infrastructure

Public spending on infrastructure and other capital outlays (CO) surged

to P75.2 billion in the first four months of 2013a P23 billion or 44.8% year-on-year
increase. Resource gaps for the construction of irrigation systems, classrooms and

other education facilities, as well as hospitals and health centers were also addressed
through significant disbursements by the Department of Agriculture, the Department of
Education, and the Department of Health, respectively.
Reforms in public works promoting right projects, right cost, right quality, right personnel,
and right-on-time implementation have also resulted in savings and speeded up project
completion. Among the long-delayed projects completed during the Aquino
administration:
The Aluling Bridge (P191.37 million) connecting the towns of Cervantes, Ilocos Sur
and Tadian, Mountain Province. The project was first conceptualized in 1978.
The Candelaria Bypass Road Project (P557.50 million), which decongested traffic
along the Daang Maharlika Highway in Quezon by 40%.
The Laguindingan Airport Development Plan (P7.85 billion), an internationalstandard domestic airport in Misamis Oriental, which is expected to benefit 1.6 milion
passengers per year and help boost tourism in Northern Mindanao.
The Ternate-Nasugbu Road (P860 million), connecting the coastal towns of Ternate,
Cavite and Nasurbu, Batangas to Metro Manila.
The Jalaur River Multi-Purpose Project, first conceptualized in the 1960s, and which
will benefit farmer in Iloilo by providing year-round irrigation.
Promoted Transparency

Recognizing the value of ease of information access in people

empowerment, as well as the deterrent effect of transparency on corruption, the
government has instituted reforms that allows for more transparency in government
operations and in the use of public funds. Websites of government agencies have been
mandated to feature appropriated budget, public offerings, and project implementations
status, for public access and scrutiny. The Department of Budget and Management has
likewise built online infrastructure that provides citizens the opportunity to monitor the
disbursement of public funds.
Performance-Based Bonus

The Aquino administration has established a merit-based incentive

program that recognizes and rewards exemplary performance of government
employees. Launched in 2012, the PBB ultimately aims to improve the delivery of goods
and services to all Filipinos, as well as to institute a culture of fairness and excellence in
the bureaucracy.

Revenue Collection

Without raising taxes, improved tax collection efficiency led to a 12.9%

year-on-year increase in revenue, from P1.36 trillion in 2011, to P1.53 trillion in 2012.
Anti-corruption drives in revenue-generating agencies were likewise intensified,
targeting tax evaders, smugglers, and erring officials of the Bureau of Internal Revenue
and of the Bureau of Customs. Since 2011, a total of 734 cases of tax evasion and
smuggling have been reported, 495 of which have been forwarded to the concerned
agencies; 24 respondents were either suspended or dismissed by the BIR or the BOC.

Fiscal reforms priority in the last 22 months of six-year

term

More transparent
Among the reforms the Department of Budget and Management (DBM) is pushing for is
the performance-informed budgeting, which requires agencies to be more transparent
about the progress and outcome of their projects.
"The executive is ceding a lot of power by doing this to Congress, and enhances
Congress' oversight function," Abad said.
Another key reform is the fast and effective spending of government through "General
Appropriations Act-as-Release-Document, which will use the GAA as a budget release
document to expedite the release of appropriations to government departments and
agencies and make the process more transparent, the Budget chief said.
Abad is also pushing for the Grassroots Participatory Budgeting (GPB), wherein leaders
of local government executives are asked to come up with a wish list of projects worth
P15 million that they want the national government to fund, and when approved, may be
included in the proposed budgets of specific agencies.
From this year to 2016, the government seeks to sustain a manageable deficit level equivalent
to 2 percent of GDP. To achieve this in 2014, the government seeks to increase its revenues by
15.6 percent to P2.0 trillion. This will also allow public disbursements to grow by 15.5 percent to
2.28 trillion in 2014.

Impact to the Government and Auditing

The Aquino administration took office at a time when corruption undermined
the economy and the credibility of the country, even as it ate away at the countrys social
fabric. Under President Aquinos leadership, a culture of integrity, accountability, and
transparency is being institutionalized. The government has taken a two-pronged
approach: To establish a culture of accountability among those in public service, and to
soundly manage the nations cofferswhich includes both ensuring its prudent
disbursement and that the peoples money is used only for the benefit of the citizens.
The results are obvious: Revitalized institutions, confidence in what was once a
struggling economy, and greater opportunities opening up for the Filipino people.

PUBLIC ACCOUNTABILITY

To sustain this renewed confidence in the government and its institutions, the Aquino
administration holds public officials to the highest standards of integrity, as well as
accountability in the use of public funds. Indeed, accountability to the law and to the
Filipino people is at the core of this governments anti-corruption reforms; in the past
three years the administration has strived to embed this in state processes and
mechanisms, as well as relentlessly pursued those who betrayed public trust for their
personal gainsregardless of position, wealth, or status.