Global investors have been impressed by Philippine President Benigno Aquinos efforts to crack down on corruption and strengthen the economy. But a misplaced effort to boost public-works spending threatens to undo much of his good work. The Supreme Court earlier this month ruled Mr. Aquinos Disbursement Acceleration Program, or DAP, unconstitutional. Under the program, Mr. Aquino had used 157 billion pesos ($3.6 billion) since 2011 to fund 116 public-works projects that were underfunded or completely missing from budgets approved by Congress. The money came from other budget lines where spending either fell short of expectations or was mired in delays. The media in the Philippines is treating this as a corruption case, yet there is no evidence that Mr. Aquino used any of the money personally to enrich himself. Compare that to last years big scandal, in which some legislators allegedly diverted money from the Priority Development Assistance Fund to fictitious projects so that they and their alleged co-conspirators could pocket the cash. All the alleged participants in that scheme have denied wrongdoing. Mr. Aquinos defenders commend him for goosing the economy with more effective public spending. He also was responding to calls from global panjandrums like the World Bank to speed up government outlays that had—not coincidentally—slowed when he started his corruption crackdown. Nevertheless, Mr. Aquinos good intentions created a bad precedent. On the economics, he would have done better to focus on the corruption problem voters elected him to tackle. As it is, theres a high likelihood that pumping so much money so quickly into projects only fed corruption further down the food chain, although so far no specific cases have come to light. As for the politics, Mr. Aquino has a point that Manilas budget process is slow and inefficient, when its not outright corrupt. But taking an unconstitutional shortcut only dilutes accountability, relieves voters and congressmen from the consequences of their choices, and sets the stage for a more corrupt President in 2016 or beyond to channel spending for his own benefit. Mr. Aquino says he will ask the Supreme Court to reconsider its unanimous ruling, but if hes serious about combatting corruption he will instead take his lumps and scrap the DAP. This would signal to voters and investors that he respects the rule of law, and would turn public attention back to the Congress, which needs as much disinfecting sunlight as possible.
Posted on: Tue, 22 Jul 2014 15:30:09 +0000
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