The failure of leadership in the corrupted budget process

Two days ago, I spoke at the UP NCPAG ICARE2025: Interdisciplinary Conference on Accountability, Reform and Engagement.

- POPOY DE VERA

The question posed to me was: what legislative reforms are required to prevent the recurrence of the corruption scandal currently engulfing the nation?

Instead of suggesting solutions, I examined the roots of the problem, drawing on my more than 30 years of experience in the legislative and executive branches of government here and in the United States.

My thesis is simple. We lack policy controls over fiscal management, and our executive and legislative leaders are fiscally irresponsible and have let the nation down.

Why do I say this?

First, we lack strong budgetary controls. In developed countries, the principle of a balanced budget is taken seriously by executive and legislative officials.

In fact, in some cases, fiscal discipline is legally ensured. The state of California, which has the fourth-largest economy in the world, has been required by law to maintain a balanced budget since 1983.

This law requires that the state’s yearly budget be enacted with estimated expenditures not exceeding estimated revenues. Executive and legislative officials are expected to cut spending or raise revenues to ensure that actual costs do not exceed actual revenues.

In contrast, we permit deficit spending. We continue borrowing without serious debate about whether it’s necessary or how to align borrowing levels with development priorities. The proposed 2026 NEP, for instance, exceeds expected revenues by more than P1 trillion.

Second, we have an imperial presidency that grants the president significant powers to enforce fiscal discipline in the budget process.