DA’s budget urgently needs monitoring, liquidation

In a public-private group meeting last Sept. 11, two measures were discussed to stop the considerable waste and corruption indicated by the Commission on Audit (COA) reports from 2020, 2021, and 2022.

For each of these years, COA identified unliquidated and unexplained Department of Agriculture (DA) expenses at the alarming level of 30 percent on a budget of less than P70 billion.

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These anomalous expenses ranged from P22 to P24 billion each year covered by the COA review.

There is a history behind this.  During the previous administration, the operating budget of the legislated  public-private body Philippine Council of Agriculture and Fisheries (PCAF) was cut by half.

Important committees like the one for international trade were abolished. The effective private sector monitoring of the DA budget was changed and decreased. Largely because of this monitoring deterioration, devastating DA budget misuse has resulted.

Request

The AgriFisheries Alliance  (AFA) is composed of three coalitions representing  three  critical sectors—farmers and fisherfolk (Alyansa Agrikultura or AA), agribusiness (Philippine Chamber of Agriculture and Food Inc. or PCAFI) and science and academe  (Coalition for Agriculture Modernization in the Philippines or CAMP).

Alarmed by the massive DA budget misuse, AFA leaders wrote six official letters to two Senate committees requesting for an investigation. No response was given.

Not to be deterred, AFA asked the Senate to identify the restoration of effective private-sector monitoring of the  DA budget as a condition for the ratification of the Regional Comprehensive Economic Partnership (RCEP) on Jan. 19, 2023. It was approved, but was only implemented 10 months later.

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Last Jan. 5, shortly after his assumption into office, Secretary Francis Tiu Laurel Jr. decisively ordered the DA regional directors to make available the  complete list of DA-funded projects in their respective regions. This would restore the effective private-sector monitoring of the private-led Regional Agriculture and Fisheries Councils.

However, the budget today for this important monitoring is extremely limited. Tiu Laurel then submitted a 50-percent increase for the proposed 2025 PCAF budget. This is now at P200 million, which is only a tenth of one percent of the DA budget.

Unfortunately, the  Department of Budget and Management (DBM) not only denied the proposed increase but, ironically, decreased the allocation. In its current deliberations, Congress must now increase it.

We need correct budget use to be able to compete against cheap, subsidized imports and increase our exports for more jobs. Our agriculture exports last year were a dismal $6.4 billion compared to Thailand’s $52.7 billion.

As it stands, agriculture’s share of our total  budget has averaged 2 percent, compared to Thailand’s 4 percent. If even that is lost to waste and corruption because of very limited budget monitoring in scope and frequency (done only once a year), how can we progress? Congress must immediately take action on this critical issue.

Liquidation

Tiu Laurel is now addressing the DA’s devastating nonliquidation record that he has inherited. We recommend an added measure for implementation.

The DA has previously concentrated on three budget measures. They are a unit’s allotment (how much is available), commitment (how much is identified for a specific purpose), and release (how much money is actually spent.)

We must now have both the government and private sector monitor our recommended fourth measure—liquidation. This is done at the end of the year. COA  records it. But as shown in the past, little is done about it.

Liquidation reports should now be done every quarter, instead of just at the end of the year when it is too late to take action. This way, liquidation can be used as a key performance indicator or KPI, influencing the relevant person’s care progression.

In addition, a reward and punishment system should be put into place. At the Sept. 11 meeting, it was stated that not a single person was penalized for the significant nonliquidation of expenses.

Increased private-sector monitoring of the DA budget, together with a new emphasis on liquidation, will go a long way in ensuring correct budget use. This is absolutely necessary for our sorely-needed agriculture development.

The author is Agriwatch chair, former secretary of presidential flagship programs and projects,  and former undersecretary of the Department of Agriculture and the Department of Trade and Industry. Contact is [email protected]