Veto

This is the latest iteration of our long saga with congressional pork: President Duterte could veto the entire 2019 budget bill.

The signing ceremonies scheduled for next Monday has been stricken off the President’s calendar. Duterte himself raised the possibility of a presidential veto in his most recent speeches.

Apart from these, we have few other indications about the status of the budget. Upon submission to the Chief Executive, the bill was passed on to the Department of Budget and Management for close study. From there, the President’s legal staff will closely scrutinize the voluminous document.

The initial expectation was that the President might exercise his line-item veto power, excising those parts of the budget document where insertions and fund diversions were made by the legislators. The last few days, however, there has been increasing indication the entire document could be rejected.

If the President vetoes the entire budget bill, this will be unprecedented.

Previous presidents chose to tolerate the games legislators play, toying with the people’s money. It was much more convenient that way. The legislators got away because vetoing the budget bill will cause much more inconvenience for the executive branch.

There was a sort of modus vivendi that prevailed. The legislators were allowed to squirrel away large sums of money to fund their pet projects provided they gave the Chief Executive as much leeway with his own lump sums. That was how the national budget lost its edge as an instrument for national development.

Even after the Supreme Court ruled the old pork barrel system as unconstitutional, Congress still managed to set aside some politically useful pork through congressional insertions. A large grey area developed between what the Court ruled unconstitutional and what was considered conveniently acceptable allocations.

But Duterte, it seems, is no longer willing to play this game. He is not impressed with the prevailing political modus vivendi nor is he daunted by the consequences of vetoing the entire budget bill.  

He said as much in a recent speech: if vetoing the entire budget bill will prove costly for our national development strategy, then so be it. He was willing to grit his teeth and bear the pain. Constitutional principle is much more important.

A reenacted budget could cause our growth rate to drop by a full percentage point. For Duterte, however, that could not be more important than getting the budget right and prevent its further use for politicking.

And so the unthinkable could finally happen. For the first time, a president will stand up to his own Congress and declare their budgetary machinations illegal.

This will be a watershed event. It could signal the beginning of the end of the pork barrel state that enriched the political class and impoverished the nation.

One might even call this a revolutionary moment.

Pork barrel state

It was former National Security Adviser Jose Almonte who coined the term “pork barrel state” to describe this anomalous feature of our democratic practice.

For years, the Philippine state was unable to properly prepare our economy for takeoff. The national budget, the principal instrument by which the state could shape our development as a nation, was constantly cut up and redistributed to the political lords to fund the reproduction of the oligarchy.

For decades, the state was unable to fund strategic infrastructure as the budget for doing this was cut up and redistributed by the politicians to please their local constituencies. Instead of strategic infrastructure, what we could achieve was micro-projects dictated by the requirements of reproducing local political dominance.

All the while, we were able to invest only less than half the percentage of GDP that our ASEAN neighbors invested for new infra in their own economies. A glaring infrastructure gap between our economy and those of our neighbors emerged. We became progressively less competitive than they were.

While our neighbors were building huge ports and modern capacity airports, our politicians were using scarce budgetary resources for ceremonial arches and bus stops. While they were building new bridges, our politically driven micro-budgeting produced such things as “multipurpose solar driers” – that was pork barrel parlance for basketball courts sometimes used to dry grain.

Our politics was killing our development.

In turn, the pork barrel was useful for reproducing the same political class by enabling the patronage system that kept them in power. The budget was, in a word, used for financing a perverse form of electoral democracy, one that relied on using the national budget to load up the gravy train.

The Duterte administration’s economic strategy centered on the Build, Build, Build program composed of 75 key infrastructure projects. This will not only close the infra gap between the country and the rest of the region. It will provide the strong stimulus to drive our own domestic economic expansion.

Yet, it is precisely the Build, Build, Build program that, according to Rep. Rolando Andaya, the senators precisely undermined when they took about P80 billion of the proposed budget and reassigned the money to their own pet projects. About P5 billion of that goes to the province of Antique for obvious political reasons.

Should President Duterte veto the entire budget bill and opt for a reenacted budget, he might have to endure a lower GDP growth forecast. But he will also be restoring to the centerpiece Build, Build, Build program the money the senators tried to squirrel away.

This is a decisive battle between a decisive national regime and the old practices that caused us to endure a pork barrel state.