The President’s Men and Women: Abad takes 3rd crack as Cabinet member

MANILA, Philippines – It’s the third time around in the Cabinet for Budget Secretary Florencio “Butch” Abad, after being part of the official family of former Presidents Corazon Aquino and Gloria Macapagal-Arroyo.

Now, his marching orders from President Benigno Aquino III, son of Mrs. Aquino, is to make sure the government’s funds are spent judiciously for programs and projects that will benefit the people, the heart of the new administration’s “kung walang corrupt walang mahirap (there will be no poor if there are no corrupt)” campaign.

Abad, who is a lawyer, said the basic problem of the government was its lack of money to fuel the many things that the President would want to do to help the Filipinos, especially the poor – the reason why the administration needs to be more stringent in spending.

Entrusting Abad with such a sensitive and vital agency might have surprised some, but Mr. Aquino and Abad have known each other for quite sometime.

The two met in 1984 at the Philippine Business for Social Progress (PBSP), a non-government organization set up by the business sector for their corporate social responsibility projects.

Abad said PBSP president Bienvenido Tan Jr. asked him to help Mr. Aquino, who wanted to be involved in their projects for the people.

Abad then joined anti-Marcos movements and the people power in 1986 which installed Mr. Aquino’s mother as president.

Abad served as Department of Agrarian Reform secretary of Mrs. Aquino while Tan was appointed as Bureau of Internal Revenue chief.

Abad and Mr. Aquino were also together in the House of Representatives from 1998 to 2001.

Under the Arroyo administration, Abad also served as education secretary.

His stint was cut short in 2005 when he resigned from his post due to the electoral fraud controversy involving Arroyo. Abad and the other Cabinet members who resigned were dubbed the “Hyatt 10.”

During this time when he was jobless, Abad made artisan wooden furniture from old and recycled wood.

Abad returned to the political arena in 2007 as the campaign manager of Mr. Aquino when he ran for the Senate.

When Mr. Aquino won as senator, Abad became his consultant and adviser while his daughter, Julia, became Mr. Aquino’s chief of staff.

Julia is now also part of the official family of Mr. Aquino as the Presidential Management Staff chief. She is said to be the youngest Cabinet member at 31.

The appointment of a father-daughter tandem to the Cabinet is also said to be the first in the country’s recent history.

Seasoned politician

Abad was first elected Batanes representative in 1987. He was re-elected in 1995, 1998 and 2001. He became president of the Liberal Party from 1999 to 2004 and is currently the vice president for policy and platforms.

Abad finished his Bachelor of Science in Business Management and Bachelor of Laws at the Ateneo de Manila University and passed the Bar in 1985.

A fellow of the Edward Mason Program in Public Policy and Management at the Kennedy School of Government in Harvard University in Cambridge, Massachusetts, Abad also holds a Masters in Public Administration.

Abad was a union organizer/trainer, research director of the Ateneo Center for Social Policy and Public Affairs, and a legal and management consultant with different local and foreign foundations.

Expert in budget

Now as budget chief, Abad disclosed that Mr. Aquino had asked that the names of the lawmakers who would receive Priority Development Assistance Fund or pork barrel would be published as well as how and where they spent it – including the amount of materials used in their projects.

The contractors will also have to ensure the structural integrity of their projects or they will not be paid in full, Abad said.

Abad described the President as an “expert” in scrutinizing the budget while he was still congressman of Tarlac and then senator.

“That’s why nobody can make a fool of him when it comes to allocations,” he said.

According to Abad, the President asked him to apply zero-based budgeting for the 2011 budget.

“It’s a technique in preparing the budget, unlike the present mechanism which is called incremental, you don’t scrutinize every budget item. This time every item in the budget has to be justified,” Abad said.

He said all the programs in the budget that should be implemented must be in line with the President’s priorities.

Abad said the programs and projects would be evaluated based on their efficiency and effectiveness.

Abad clarified that the Arroyo administration’s food-for-school program would not really be abolished but would be redesigned as part of the zero-based budgeting process.

He said even if the money for the food-for-school would be re-allocated for conditional cash transfer, they still have the same objective, which is to encourage more children from poor families to go to and stay in school.

Abad said leakages were discovered in the program and certain changes would be proposed on its mode of implementation in order to benefit people in a more targeted manner.

“For example, we’re looking at consolidating the food-for-school funds with those of the Pantawid Pamilyang Pilipino Program since these programs have overlapping beneficiaries and objectives. This would perhaps result in an expanded conditional cash transfer that would not only mean a more efficient use of resources, but would also be more beneficial to targeted recipients. Also, we are seeing that the Department of Social Welfare and Development is better structured to implement this program than the Department of Education,” Abad said.

Following orders from Mr. Aquino to adopt a budget process that would prioritize relevant and effective programs, Abad said his department had been conducting a thorough review of various government projects in coordination with concerned agencies.

“We encourage the agencies to look into the programs they are implementing and see which of these are aligned with President Aquino’s priorities and are really responsive to the needs of the people,” he added.

Fund for disasters

Abad said by being careful in spending, the Aquino administration was hoping to tap funds for more beneficial programs and projects as well as concerns like disasters brought about by typhoons and natural calamities.

At present, Abad said the Calamity Fund of the government was already depleted with many more typhoons still expected to hit the country.

“We will review our flexibility and see if we can re-align or re-allocate funds. Most of the calamity assistance (extended by the previous administration) was for Pampanga (the hometown of former President Arroyo),” Abad said, adding that this was another thing Mr. Aquino would not want to happen – for a single province to be a favorite and become the recipient of most of the funds from his office.

For the remainder of 2010, Abad said their flexibility was already very limited because the government could no longer incur debt and the deficit would have to be kept at 3.9 percent of gross domestic product (GDP) so the money could be spent for various programs and projects.

“By 2013 to 2016, the deficit can be two percent (of the GDP),” he said.

To gain more revenues, Abad said the government would have to plug loopholes, especially at the Bureau of Internal Revenue and the Bureau of Customs.

“We need measures that would not necessitate new taxes but generate income,” Abad said.

Rationalizing tax incentives

Abad further said the government was looking at rationalizing tax incentives. He pointed put out that investors would still come even without the tax holiday being given by the previous administration, especially if the business environment would be better.

Another plan is to make excise taxes indexed to inflation.

“When the prices of commodities go up, their taxes should increase too. It’s for the public good and public health because they are sin products,” Abad said.

Tax rates of cigarettes will also be made uniform, unlike the present practice.

“The classification (of cigarettes) is becoming a problem,” he said.

Privatization and the selling of government assets, Abad said, was also one way to raise funds for the government.

The President is also seeking to abolish and deactivate government agencies that are non-performing.

“As we generate funds, we will also have to ensure that there is transparency and accountability in the use of funds. There will also be mechanisms for engaging the public like civil society, academe and business groups in guarding the use of public funds,” Abad said.

Abad said the budget preparation, enactment and execution would all be done under serious scrutiny.

“There will be updates on the releases, where they went, the physical accomplishments. What has been implemented with a certain amount will be monitored. If P1 million was released for one kilometer of road, then there must be one kilometer of road built,” Abad said, adding that his department was really established to ensure prudent spending. –Aurea Calica (The Philippine Star)