The Bleak Rhetoric of Sacrifice

The magnitude of the fiscal problems of the country has been repeatedly elaborated in recent days. But the causes are seldom told.

The ballooning debt of the national public sector and the falling rate of tax collections mirror the colossal ineptitude and dysfunction in our national politics. Essentially, the government has chosen to borrow money from those who are supposed to have been paying the taxes.

The bankruptcy of the National Power Corporation, which accounts for more than one-third of this year’s public finance deficit, is the result of the inability of our national politicians to resist the corrupting power of private capital, including the country’s own elite as typified by the Lopez family.

We need to help solve the country’s fiscal problems. We need to avoid the collapse of the economy’s capacity to sustain livelihoods. Yet the laundry list of cash-generating and budget-cutting policies from the government’s and country’s best technocrats (no less) reveals a fundamental disconnect of perspectives between those who are proposing the policies and those who must bear the burdens.

The President and her technocrats have told us what needs to be done to improve the bottom line. We on the other hand would like to get to the bottom of things.

The President and her technocrats shed tears over the decline in the government’s ability to raise resources for the public treasury, but they give no notice to the revenues that have been lost due to the mindless tearing down of tariffs on imports over the past decade and a half.

The technocrats say that electricity tariffs need to be raised significantly because they were artificially lowered two years ago. None of them thought of asking why the people have been up in arms over the rising cost of electricity. A blind eye is turned to the layers of corruption that have been pushing prices to dizzying heights.

Proposals such as that of raising electricity rates promise to generate cash and plenty of hardship. They are intended to solve the fiscal crisis without attending to its deep causes.

Filipinos are not averse to sacrifice. But they need to be convinced that the new burdens being demanded of them will not just replenish the lost cash in order for this to be merrily frittered away and stolen again. The government’s call for sacrifice will be met with resentment -- not because the sacrifice is large but because the root problems have not been identified and the reforms have not been credibly put forward.

What is missing is a belief in the purpose of these sacrifices.

The recent national elections notwithstanding, the institutions and the national leaders who preside over our institutions have yet to acquire the credibility that is needed to call forth the collective national sacrifice needed to avert the impending fiscal crisis. Instead of being inspired to pitch-in towards a solution to the fiscal crisis, people have been asking if there will ever be an end to the sacrifices that have assaulted their meager livelihoods with painful regularity over the past decades.

At this stage in our national life, the problems seem to overwhelm our feeble collective energies. Not because people fail to understand the causes but because the choice of solutions is not given to them. We are not being asked to solve the problems, but merely to bear the burdens. The President will consult but she will not be asking for approval. All that the people can do is to hope that our leaders who seem so distant and unconcerned will somehow surprise us and start doing the right things. But the landscape is rather bleak.

Still, the administration of President Gloria Macapagal-Arroyo knows the fluidity and volatility of Philippine politics. If only for this, she will be making efforts to establish the legitimacy of the decisions that are about to be made. She will try to assemble a critical mass of allies to lessen the political risks attendant to the draconian measures her administration will be implementing; and the Catholic Church appears to be the first recruit in this regard. The President will want to blunt the most important criticisms to her package of fiscal reforms and will want to undermine groups that insist on staying outside the circle of cooperation and sacrifice that she is trying to assemble. But she will soon recognize the need to engage criticisms by initiating confidence-building measures that will demonstrate her administration’s intention to tackle the deeper reforms that are being demanded. This is one important window of opportunity that Akbayan will use to influence the quality of the national discourse and to alter the mix and shape of policies that will be implemented.

Fiscal Crisis and Radical Decentralization

Local governments are not about to escape the fallout from this so-called fiscal crisis.  The shock will be transmitted to local governments through a reduction in the pork barrel of congressional representatives and a possible reduction in the IRA.

More importantly, a drastic withdrawal of national government support for local governments in the devolved services is being planned. The grants that used to be available to poor municipalities will largely cease to exist, except possibly in the conflict areas in Mindanao and in areas hit by disaster .  The proposal to abolish pork barrel funds is in line with this approach of a radical implementation of devolution. ODA-supported projects will also be screened in this regard.

The implication is that support available to local governments will mainly be in the form of loan facilities made available through the Development Bank of the Philippines, the Land Bank, and the Municipal Development Fund Corporation, which will be absorbing project management offices of ODA-supported projects.

Radical decentralization replaces the proposal to implement the National Government-Local Government Cost Sharing Schemes drafted by the NEDA-Investment Coordinating council (NEDA-ICC) in 1997 and then refined in 2002. In its place the NEDA-ICC chaired by the Department of Finance and the Development Budget Coordinating Council (DBCC) chaired by the Budget Secretary will be issuing a joint implementing guidelines drastically reducing the scope of National Government cost-sharing in services that have been devolved under the Local Government Code.

Nurturing Patches of Green: Akbayan’s Stake in Local Governments

In the context of this fiscal crisis and in the larger historical context of failed national projects of the Philippine elite, Akbayan looks towards local governments. Local governments are important to Akbayan in at least five senses:

First, having reached the maximum of three seats in Congress under the party list law, it is self-evident that accumulation of strength in local governments is key to advancing the party’s national project. Even if greater proportional representation rather than district-based representation becomes the rule for gaining seats in Congress or the Parliament Akbayan is set on the road to becoming a local governance party.

Second, local governments are the staging point for hope. Exemplary local governments can provide the patches of green that will dot this grey landscape of our national politics. Akbayan does not aspire to have a significant presence in all of the provinces and municipalities. But it aspires to have the best.  Through our allied local governments, we hope to demonstrate the new politics of expanded possibilities. People will indeed always get the government that they deserve. But we begin to hope, demand and work for better governments when it has been demonstrated to be possible. During the past decade in Latin America (e.g., in Venezuela and Brazil), the best local governments have become the training grounds for national leaders. Our best local officials will become the pool from which new Philippine leaders will emerge.

Third, local governments present a venue that will empower instead of overwhelm the ordinary person. The scale of problems in the province and the municipality provides room for genuine participation of people in the selection of leaders and in the making of decisions that affect their lives. Genuine participation in its turn helps people recognize their own dignity as citizens and not just as supporters of some big politicians. Kerala and Brazil have demonstrated the practical value and political profitability of participation, public deliberation and the institutionalization of practices painstakingly evolved by people organizations. No great gain will emerge without pain and collective effort; no collective effort will emerge without a belief in the purpose. The key to these are institutions of public deliberation and participation that tap and elevate the indigenous resourcefulness and inventiveness of ordinary folk. Deliberative communities will be the “wind beneath the wings” of the best leaders in local governments.

Fourth, local governments are the front line agencies of local development and poverty alleviation and environmental sustainability. The impending cuts in the IRA notwithstanding, local governments are now in control of significant financial resources. Local government resources should be mobilized towards creating economic experiments such as that found in the great cooperative movement in Mondragon, Spain. We need to develop the outlines of a competitive but humane economy where inequalities are moderated without blunting individual initiative; where prospects of prosperity and decent livelihoods in the rural areas bring our sons and daughters back from the cold and remote metropolises where they are now scattered. As the individual prospers in this manner she will also see the importance of giving back to the community. We need to assemble local governments to work together as interlinked economies, so that the economies of scale and the specialization and division of labor needed for thriving in a global economy are realized – so that capitalism will meet its match. We need to organize our contiguous communities beyond the boundaries of our local governments because pressing environmental problems on our coasts, watersheds, river basins and forests will not be addressed at all unless all communities cooperate.

Fifth, the national government will recede in relative terms, as local governments discover the uses of the power and resources that have been granted to them. But that is not all. The Local Government Code has set a powerful virtuous cycle in motion -- as national politicians recognize the importance and power of local governments, they will find it politically profitable to support the work of local governments. The Senate, for instance, has emerged as a vigorous defender of the Internal Revenue Allotment. This is only the beginning and it is bound to be a long-term trend. Together with its local government officials and representatives and allies in the legislature Akbayan will set in motion the effort to strengthen the claim of exemplary local governments on public resources.

Sunlight and Rain for Our Nurseries of Hope

How do we get from here to there? The most important fact that we need to recognize is that good local governments are freaks of nature. You are chance occurrences; quirks of fortune that stand little chance of survival.  Do you wonder why there are so few of us in this gathering?

As you move to scale on the little experiments that you have initiated you will encounter political opposition, financial constraints, and threats to your advancement up the ladder of your political careers. You swim in the murky waters of bossism, datuism and patronage politics. The pressure to adapt, to conform, to evolve grabbing hands and to perform tricks on your constituents will be close to irresistible. But that is why we gather here.

We do not hope merely to survive. We want our numbers to increase. We want to address the vulnerabilities that constantly threaten our ability to survive politically. We need concentrated beams of sunlight and rain that will support our growth and multiplication. In other words, if we are not to merely adopt and be absorbed into politics as usual; we also need to work together to change the environment that has been hostile to our brand of politics.

The party’s ability to support progressive politics in local governments turns on its ability to sustain its own growth and its capacity to influence national politics. This is the reason charter change, the shift to proportional representation in congress and possibly to a parliamentary set-up are extremely important in the discursive life of the party. We stand little chance of competing toe-to-toe with district-based representatives who derive their strengths from illegal activities, local armies and great family fortunes. But we are probably the party most prepared to gather constituencies and votes based on the persuasiveness and consistency of our programs. An electoral system that moves towards proportional representation will help us realize this immanent strength. A parliamentary system can, under the right conditions, help us magnify this strength through coalitions with like-minded parties.

The party’s ability to transfer financial resources to local governments is puny, despite the fact that we have three representatives in Congress. Even in the medium-term relying on the pork barrel is a political dead end, especially if this prevents us from working to reduce the arbitrary gate-keeping powers of traditional politicians as they try to buy-off opposition and to procure local political support with the funds secured from the dispensers of patronage at the national center. Increasingly, we will need to advocate for a new ethic and a new basis for national government support to local communities and their local governments.

First, we will need to study the reform of the internal revenue allotment formula i) to find out how poorer municipalities and provinces can receive funds in proportion to the number of poor people that they must support and ii) to find out how those local governments with significant tax bases can be encouraged to depend more on the resources that they are fortunate to have in their towns.

Second, we will need to propose modes of national government support for local governments that encourage resource generation, self-help, and cooperation between local governments and their communities. In the medium term these new modes of NG-LGU financial transfers should replace pork barrel and remove the selection of projects from the hands of members of the legislature. This is a key instrument for changing the incentives faced by local politicians. Traditional politicians have trained people to wait upon them to deliver the goods; but conditional grants that encourage self-help will make it less difficult and perhaps even politically profitable to abandon or transform relations of dependency that are at the core of our national political malaise. Our bet is that, because Akbayan is a social movement party that will increasingly be active in community organizing and in local governments – our ability to support self-help or what is also known as local cost-sharing will be greater relative to other political forces and parties. Needless to say, we will explore cooperation with district-level politicians and provincial governors who sympathize with our ends.

Third, immediately the party will support new norms that will regulate the disposition of pork barrel funds and other national funds that are allocated on the basis of non-transparent political calculations. Some elements of these new norms will be seen in the 2002 NEDA-ICC guidelines that the government is, unfortunately, about to throw into the waste bin even before they have been tried. We will open more occasions for exploring alternatives to the extremes of pork barrel funds and to the proposal for radical devolution.

The party’s ability to address the political risks of good governance will grow as the cooperation between local party units, civil society organizations and local officials thickens. We hope to establish the terms of reference between all of these players in our localities in a few months time. It will not be surprising to find out that winners of the famed Galing Pook Awards are in fact not among the best political survivors. Because it will be quite a while before the conducive national political institutions come into being, it will be urgent to use political organizing to support our local officials. We will not only promote exemplary practices in local governance we will also work to increase the compatibility of good governance with electoral victory. Because reforms in local taxation, public markets, water systems, and in forestry and coastal resource management will be opposed by vested interests, it will be important for local party units to organize people who will benefit from reforms. In the end, because of the short political tenure of local officials in the country, the constituency for reforms will, in many cases, also have to be a solid constituency for the reformer.

Finally, our local official’s ability to thrive under adversity will also depend on the ability to spread the pain of reform across many years. In coastal resource management for instance, the imposition of the 15-kilometer ban on commercial  fishing will take its toll on local folk who are employed by local operators as well as on those who do not have the sea craft and artificial corals far from the shore that will attract the fish from the deep. In the case of baranggay-bayan cost-sharing for rural water systems, it can happen that the upfront cost needed for mobilizing the community counterpart contributions might be too heavy a burden for the poor barangays. In these as well as in the case of many livelihood initiatives, access to credit facilities down to the purok level will be important in helping our constituents help themselves. If the investment of both the community and of the local government can be spread over time then it will be far more affordable and bearable. The benefits from the projects will become apparent even before the full cost of services are jointly amortized. Akbayan sees access to grants and loan facilities as akin to bringing rain and sunshine to the patches of green that we would like to nurture. This as well is a major element of our local governance work.

ANNEX -- BOOOK 1 SECTION 17 of the Local Government Code (devolved services)

Basic Services and Facilities.

(a) Local government units shall endeavor to be self-reliant and shall continue exercising the powers and discharging the duties and functions currently vested upon them. They shall also discharge the functions and responsibilities of national agencies and offices devolved to them pursuant to this Code. Local government units shall likewise exercise such other powers and discharge such other functions and responsibilities as are necessary, appropriate, or incidental to efficient and effective provision of the basic services and facilities enumerated herein.

(b)  Such basic services and facilities include, but are not  limited to, the following:

(1) For a Barangay:

(i) Agricultural support services which include planting materials distribution system  and operation of farm produce collection and buying stations;    
(ii) Health and social welfare services which include maintenance of Barangay health center and day-care center;    
(iii) Services and facilities related to general hygiene and sanitation, beautification, and solid waste collection;    
(iv) Maintenance of Katarungang Pambarangay;
(v) Maintenance of Barangay roads and bridges and water supply systems    
(vi) Infrastructure facilities such as multi- purpose hall, multipurpose pavement, plaza, sports center, and other similar facilities;    
(vii) Information and reading center; and       
(viii) Satellite or public market, where viable;

(2) For a municipality:

(i)  Extension and on-site research services and facilities related to agriculture and fishery activities which include dispersal of livestock and  poultry, fingerlings, and other seeding materials for aquaculture; palay, corn, and vegetable seed farms; medicinal plant gardens; fruit tree, coconut, and other kinds of seedling nurseries; demonstration farms; quality control of copra and improvement and development of local distribution channels, preferably through cooperatives; inter -Barangay irrigation system; water and soil resource utilization and conservation projects; and enforcement of fishery laws in municipal waters including the conservation of mangroves;

(ii) Pursuant to national policies and subject to supervision, control and review of the DENR, implementation of community-based forestry projects which include integrated social forestry programs and similar projects; management and control of communal forests with an area not exceeding fifty (50) square kilometers; establishment of tree parks, greenbelts, and similar forest development projects;

(iii) Subject to the provisions of Title Five, Book I of this Code, health services which include the implementation of programs and projects on primary health care, maternal and child care, and communicable and non-communicable disease control services; access to secondary and tertiary health services; purchase of medicines, medical supplies, and equipment needed to carry out the services herein enumerated;

(iv) Social welfare services which include programs and projects on child and youth welfare, family and community welfare, women's welfare, welfare of the elderly and disabled persons; community-based rehabilitation programs for vagrants, beggars, street children, scavengers, juvenile delinquents, and victims of drug abuse; livelihood and other pro-poor projects; nutrition services; and family planning services;

(v) Information services which include investments and job placement information systems, tax and marketing information systems, and maintenance of a public library;

(vi) Solid waste disposal system or environmental management system and services or facilities related to general hygiene and sanitation;

(vii) Municipal buildings, cultural centers, public parks including freedom parks, playgrounds, and sports facilities and equipment, and other similar facilities;

(viii) Infrastructure facilities intended primarily to service the needs of the residents of the municipality and which are funded out of municipal funds including, but not limited to, municipal roads and bridges; school buildings and other facilities for public elementary and secondary schools; clinics, health centers and other health facilities necessary to carry out health services; communal irrigation, small water impounding projects and other similar projects; fish ports; artesian wells, spring development,  rainwater collectors and water supply systems; seawalls, dikes, drainage and sewerage, and flood control; traffic signals and road signs; and  similar facilities;

(ix) Public markets, slaughterhouses and other municipal enterprises;

(x)  Public cemetery;

(xi) Tourism facilities and other tourist attractions, including the acquisition of equipment, regulation and supervision of business concessions, and security services for such facilities; and

(xii)  Sites for police and fire stations and substations and the municipal jail;

(3) For a Province:

(i) Agricultural extension and on-site research services and facilities which include the prevention and control of plant and animal pests and  diseases; dairy farms, livestock markets, animal breeding stations, and artificial insemination centers; and assistance in the organization of farmers' and fishermen's cooperatives and other collective organizations, as well as the transfer of appropriate technology;

(ii)  Industrial research and development services, as well as the transfer of appropriate technology;

(iii) Pursuant to national policies and subject to supervision, control and review of the DENR, enforcement of forestry laws limited to community-based forestry projects, pollution control law, small-scale mining law, and other laws on the protection of the environment; and mini-hydro electric projects for local purposes;

(iv) Subject to the provisions of Title Five, Book I of this Code, health services which include hospitals and other tertiary health services;

(v)  Social welfare services which include pro grams and projects on rebel returnees and evacuees; relief operations; and, population development  services;

(vi) Provincial buildings, provincial jails, freedom parks and other public assembly areas, and other similar facilities;

(vii) Infrastructure facilities intended to service the needs of the residents of the province and which are funded out of provincial funds including, but not limited to, provincial roads and bridges; inter-municipal waterworks, drainage and sewerage, flood control, and irrigation systems; reclamation projects; and similar facilities;

(viii) Programs and projects for low-cost housing and other mass dwellings, except those funded by the Social Security System (SSS), Government Service Insurance System (GSIS), and the Home Development Mutual Fund (HDMF): Provided, That national funds for these programs and projects shall be equitably allocated among the regions in proportion to the ratio of the homeless to the population;

(ix)  Investment support services, including access to credit financing;

(x)  Upgrading and modernization of tax information and collection services through the use of computer hardware and software and other means;

(xi) Inter-municipal telecommunications services, subject to national policy guidelines; and

(xii) Tourism development and promotion programs;

(4) For a City:

All the services and facilities of the municipality and province, and in addition thereto, the following:

(i)  Adequate communication and transportation facilities;

(ii) Support for education, police and fire services and facilities.

(c) Notwithstanding the provisions of subsection (b) hereof, public works and infrastructure projects and other facilities funded by the national government under the annual General Appropriations Act, other special laws, pertinent executive orders, and those wholly or partially funded from foreign sources, are not covered under this Section, except in those cases where the local government unit concerned is duly designated as the implementing agency for such projects, facilities, programs, and services.