Philippines: Without accountability, money will not help the new Bangsamoro government

With huge money comes huge accountability. For Leonor Briones, lead convenor of Social Watch Philippines (SWP), the billions of funds that would be poured into the soon-to-be-established Bangsamoro government should undergo thorough audit to ensure proper spending and hold specific people responsible for how the money is spent.

By the reckoning of Moro Islamic Liberation Front (MILF) chief negotiation Mohagher Iqbal, the Bangsamoro government will get an initial funding of about P70 billion in its first year of operation, from various sources, including the block grant from the government.

Wth peace and development, it is the goal for the Bangsamoro to generate its own revenues, be less dependent on the national government for funding, and enjoy the fruits of fiscal autonomy.

"We are for peace and development, and at the same time, according to the BBL (Bangsamoro Basic Law), for helping the new entity achieve fiscal autonomy. But what is this in its real essence? It is when you collect your own taxes and then spend them as you please," Briones, former National Treasurer, said.

However, the proposal under BBL was for the Bangsamoro to be given a block grant, which will increase every year for 10 years, and to have its share in the Internal Revenue Allotment (IRA), and to receive development fund, and more funds from other sources, she added.

"Giving them blanket authority to spend without accountability will not help them at all, that is not quite the path towards fiscal autonomy," Briones said.

According to Briones, the block grant, which will be automatically appropriated and will no longer undergo the scrutiny of Congress, would be between P30 to P40 billion. 

The Bangsamoro government will also get a special development development fund of between P7 and P10 billion.

Aside from this, the new entity will get a share from the internal revenue allotment (IRA) of local government units.

In summary, the sources of funds for the Bangsamoro government, as stated in the Annex on Revenue Generation and Wealth Sharing of the BBL are as follows:

  • Block Grant - the automatic appropriation that shall represents 4 percent in the share of the national government in the internal revenue allotment. This will be a separate amount from the IRA of LGUs. The BBL will provide the formula that will determine the amount, which will not be less that the last budget received by the Autonomous Region in Muslim Mindanao (ARMM), which was P24 billion for 2015. Being automatically appropriated, this means officials of the Bangsamoro government will no longer have to defend the amount in Congress during budget deliberation.
  • Taxes and revenue generation already devolved to the ARMM. In addition to this taxing powers, the Bangsamoro will also have the power to levy capital gains tax, documentary stamp tax, and estate tax, where all taxable elements are within the Bangsamoro.
  • The Bangsamoro will have the power to levy fees and charges.
  • The Bangsamoro may receive grants from donors, and such grants will be received by the entity directly.
  • The Bangsamoro will have the authority to contract loans, credits and other forms of indebtedness with any government or private bank and other lending institutions.
  • Special development fund

Government revenues will be shared by the national government and the Bangsamoro in the following manner:

  • 75% (Bangsamoro); 25% (national government) - national taxes, fees and charges collected by the national government within the Bangsamoro. These national taxes include income taxes, VAT and other percentage taxes, but exclude tariff and custom duties.
  • 100% of the revenues for non-metallic minerals will be for the Bangsamoro.
  • 75% (Bangsamoro); 25% (national government) for metallic minerals.
  • 50-50 sharing for fossil fuels (oil, natural gas, coal) and uranium.

Briones has been critical of the current proposal under the BBL now pending in Congress, which pitched for the creation of the Bangsamoro government's own auditing body.

Cagayan de Oro Representative Rufus Rodriguez, the head of the ad hoc committee deliberating on the BBL, said the Bangsamoro's own auditing body would be one of the provisions that will be removed from the proposed law because it is unconstitutional.

The Constitution states that there shall only be one Commission on Audit for the entire country.

Briones also wanted to know how the 4 percent share that would comprise the block grant was derived. 

"Why 4 percent? Why not 2 percent or 5%? This has to be explained, they must have used some formula," she said.

The former National Treasurer said the appropriation for the proposed Bangsamoro government would certainly impact on the national budget. 

"It's a huge amount, and it would increase every year as our tax collection and revenues go up," she said.

Briones urged the lawmakers, the stakeholders and public to take a close look at the proposed law.

"Let's be rational about all this. We want peace, we want a law, but we have to do it right," she added.