What is wrong with Philippine public administration?

“Poor countries are poor not because they lack resources, but because they lack effective political institutions." -Francis Fukuyama

In a recent survey, The Political and Economic Risk Consultancy (PERC), a survey of expatriate businessmen, rated the Philippines an 7.57 out of a worst possible score of 10 as among the worst and most frustrating bureaucracies in Asia; coming only fourth to Indonesia (8.37), Vietnam (8.54) and India (9.11) (PERC, 2012). Public administration in the Philippines have always been focused on three concerns—reorganisation, decentralisation and corruption.

Reorganisation of the bureaucracy has always been an initiative of any Philippine president throughout the years. Reorganisation programs have been mainly concerned with ensuring the effectiveness, efficiency, affordability and accountability of government; that is, government effort must be focused on its core functions, rationalisation of service delivery support systems and right staffing, rationalise government funds and ensuring transparency, respectively.

To achieve a government that works better but costs less, the government must streamline and reengineer the redundant and bloated Philippine bureaucracy. As per the latest 2008 Inventory of Government Personnel Data, the Philippine bureaucracy has a total of 1,313,538 government personnel. National Government Agencies (NGA) staff the most number with 832,676 (63.39%) while Local Government Units (LGU) have 381,502 (29.04%) and Government Owned and Controlled Corporations (GOCC) have 99,360 (7.56%). Compared to the last inventory conducted by the Civil Service in 2004, the number of government personnel decreased by 11%, from 1,475,699 in 2004 to 1,313,538 in 2008.

The decrease in government personnel prove to be a step forward in reducing the bloated size of the Philippine bureaucracy. However, the regional distribution of government personnel continues to be misplaced. Staff in the National Capital Region (NCR) increased from 437, 243 (29.63%) in 2004 to 506,103 (38.53%) in 2008, a percentage increase of 8.9%. Comparatively, the Autonomous Region of Muslim Mindanao (ARMM), which is perennially among the poorest regions in the Philippines, only has 50, 676 (3.86%) of the total number of government personnel. As it was in 2004, the Philippine bureaucracy continues to be maldistributed, “areas which need the services more have only a few number of public servants” (Brillantes, 2008).

            Brillantes adequately pointed out the numbers and statistics of the sizes which continue to plague Philippine public administration. However, what numbers cannot explain is the aspect of professionalization and degree of autonomy of the bureaucracy. One of the core functions of public administration is regulation. “To ensure their regulatory independence, agencies are typically staffed by experts, lawyers, and accountants who have neither run for political office nor previously worked for any player in the industry they are regulating” (David, 2013). The degree of professionalization and autonomy of the Philippine state apparatus can be examined in the recent issue of the Manila Electric Company (MERALCO) increase rate in electricity. In his Philippine Daily Inquirer article, Randy David (2013) examines the case of the current chair of the Energy Regulatory Commission (ERC), Zenaida Cruz-Ducut. She is ill-suited for the position, as her background suggests. Ducut was a member of Congress for nine years where she was a loyalist of then President Gloria Macapagal Arroyo. Upon the end of GMA’s presidency, she started giving out positions to her loyalists. Ducut was a political appointee of GMA to the ERC. She was a lawyer; she had no idea about the functions and how to run the ERC. Recently, whistle blower Benhur Luy said that Ducut was involved in the pork barrel scam where she acted as an intermediary between lawmakers and Janet-Lim Napoles. The inability of the Philippine public administration to be insulated from the collusion between state actors and rent-seeking oligarchs is what hinders development in the Philippines, contributing to the overall cycle of booty capitalism (Hutchcroft, 1998).

            Aside from reorganisation, decentralisation has been a mechanism adopted by governments all over the world to design a public administration that is not only more efficient but also more responsive (Brillantes, 2008). To further understand the concept, decentralisation could be operationalised in three ways: deconcentration, devolution and debureucratisation.

            Deconcentration is a form of decentralisation that limits lower levels of government to mere transmitting of orders and implementing decisions that are decided centrally. Devolution, on the other hand, is the most extensive form of decentralisation where powers and responsibilities are transferred from national government to local governments. These responsibilities and powers include the delivery of basic services and fiscal powers, respectively. Finally, debureaucratisation involves moving beyond government into co-opting the private sector and non-governmental organisations in the delivery of services.

In the Philippines, decentralisation culminated with the Local Government Code (LGC) of 1991, which provided for the most sweeping devolution of powers and responsibilities in the entire Philippine history. Devolution is based upon the principle of proximity; the local government unit (LGU) is the nearest to the people, therefore it is in the best position to serve them. One of the major features of the LGC is the increase responsibility for the delivery of various aspects of basic services such as in health, public works and education. Another is the responsibility of enforcement of certain regulatory powers such as the enforcement of environmental law. Financial resources and powers are also decentralised by broadening their taxing powers and an increased share from the national taxes through the institutionalisation of the Internal Revenue Allotment (IRA). Finally, the LGC of 1991 “increased the democratic space of civil society and embraced them in participating in local governance” (Brillantes, 2008), as evident in the increase in the number and participation of non-governmental organisations (NGOs) over the years.

However, despite the promises of decentralisation, a recent World Bank Public Expenditure Review (WB-PER) argues that “decentralization in the Philippines has not played an important role in reducing geographic disparities and instead may be exacerbating them” (World Bank, 2011). This is largely due to a number of problems the last 20 years of decentralisation have experienced—lack of fiscal capacity and autonomy of LGUs and misplaced and unaccountable spending

“If you ask any LGU in the Philippines if their funding is enough for their constituency, they would always say it is not enough—parating kulang. We need more money; we need more funds to serve our constituency much better,” Mayor Sherwin Gatchalian said in a 2012 forum on fiscal decentralisation. The weak fiscal capacity of LGUs has restricted them from performing the devolved responsibilities. This is largely due to an increased dependence on an IRA that is not, in the first place, equalising. Eighty nine percent of LGU financial resources come from the IRA whereas only 11% come from Non-IRA resources (Llanto, 2012). Although they are given extensive taxation powers to generate their own revenue, the poorest provinces simply do not have a large enough of a tax base. To further exacerbate the geographical inequality, on a per capita basis, more allotments go to LGUS with higher per capita local revenues (Guevera et al, 1994). Also, LGUs receive mandates from national government without a clear source for funding.  For example, the Magna Carta for Public Health Workers mandates LGUs to pay for subsistence allowance, laundry allowance, hazard pay, etc. without a legislated source of funding. IRA dependence and its non-equalising formulation have not only incapacitated the LGU, it has also compromised the LGU’s genuine autonomy.

An examination of the expenditure pattern of LGUs suggests misplaced priorities. From 2001 to 2008, expenditure on social services was on a steady incremental decrease from 26.1% to 20.3%; this is despite the general rise in population (Diokno, 2012). While expenditure on social services continued to fall, budget shares of general public services and other purposes, which can be considered as administrative overhead, rose from 40.5% to 44.1% and 12.4% to 17.2%. Further, local governments commonly charge payment of contractual workers to maintenance and other operating expenditure or against development projects, which are supposed to be charged as overhead (Llanto, 2012). Also, LGUs commonly supplement costs that are supposed to be funded by national government. In effect, spending for social services and capital goods are drowned out. The absence of a performance monitoring system of local service delivery makes it difficult to examine and oversee local service delivery (Diokno, 2012).

Finally, public administration in the Philippines is plagued by the perennial, pervasive and pathological issue of corruption. The misuse of public power for private profit hinders growth and development by deterring trade and investment and inefficient spending (Brillantes, 2008). National government agencies have always been at the centre of corruption scandals. Just recently, corruption in the Bureau of Customs even pushed Commissioner Rodolfo Biazon to call for its dissolution and eventually, his resignation. Anecdotal evidences point out to corruption in the Bureau of Internal Revenue and constant harassment of businessmen. Aside from national state actors, operating under the radar of accountability and commonly viewed through rose-coloured lenses are local politicians who often escape with corruption.

Consider the IRA, at one level, it is an inter-governmental transfer to further capacitate LGUs in local service delivery; at another level, chunks of the IRA are controlled with personal discretion by local politicians like governors, mayors, municipal mayors and barangay captains. Further, development decision making is not based on technical assessment but rather in constantly shifting power relations and electoral considerations (Hutchcroft, 2012). The IRA, being a source of patronage, places “money politics” above policies and programs. This effectively builds authoritarian-like structures in the locale and encourages warlord-like behaviour of local politicians. At the national level, this further de-incentivises the formation of ideology-based and programmatic political parties. To exacerbate the problem, the only institutional check on local politicians is mid-term elections. The lack of accountability mechanisms in both behaviour and expenditure has bred difficult problems in governance.

After discussing these issues and problems, it is imperative that the question posed by Brillantes at the beginning of his article be answered—is there a Philippine public administration? Or better still, for whom is Philippine public administration?

Resonating his initial answer, indeed, there is a Philippine public administration in terms of administrative structures and processes. National bureaucratic agencies like the aforementioned Bureau of Customs and Bureau of Internal Revenue have respective organisational features, functions and procedures as much as sub-national administrative arms like local government units possess their own. However, its mere existence matters less than for whom it actually exists—does Philippine public administration exist for the general public?

The situational examples that were previously given in this review provide empirical evidence to how many scholars brand the Philippine state as patrimonial (Hutchroft, 1998; McCoy, 1993). According to Paul Hurtchroft (1991), “the state apparatus is chocked continually by an anarchy of particularistic demands from, and particularistic actions on behalf of, those oligarchs and cronies who are currently most favoured by its top officials.” For modern capitalism to work and fulfil its promises of general prosperity, the bureaucracy must function along impersonal and rational lines of service and regulation. However, in the Philippines, oligarchic interests and rent-seeking behaviour totally captures the bureaucracy and manipulates it according to their purposes. Not only that, state actors, who commonly come from oligarchic families, also use the state apparatus to accumulate personal wealth at the expense of the general public. The most recent issue of alleged collusion between a local politician and contractors, who will receive 30% to 35% kickback, in the sub-par bunkhouses built for Yolanda victims can attest to such claims.  This co-optation between the social oligarchic elites and political state actors in capturing a highly weak and incoherent bureaucracy has created patterns of political continuity in what can be classified as a patrimonial, anti-development and predatory Philippine state.

Is there a Philippine public administration? Of course, there is. Better still, for whom is Philippine public administration? Unfortunately, it has and continues to exist for the powers that be.

Bibliography

Bibliography

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Brillantes, Alex B. Is there a Philippine Public Administration? Or Better Still, For Whom is Philippine Public Administration? Quezon City: University of the Philippines National College of Public Administration, 2008.

Commission, Philippine Civil Service. Inventory of Government Personnel Data. Quezozn City: Philippine Civil Service Commission, 2008.

David, Randolf. "Who will regulate the regulators?" Philippine Daily Inquirer, December 21, 2013.

Diokno, Benjamin. "Decentralization in the Philippines After 20 Years: What Have We Learned? Where do we go from here?" In The Philippine Review of Economics, by Ramon Clarete. Quezon City: University of the Philipines School of Economics, 2012.

Fukuyama, Francis. The Origins of Political Order. London: Profile Books LTD, 2011.

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Hutchroft, Paul. "Re-slicing the pie of patronage: the politics of the internal revenue allotment in the Philippines, 1991-2010." In The Philippine Review of Economics, by Ramon Clarete. Quezon City: University of the Philippines School of Economics, 2012.

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McCoy, Alfred. Anarchy of Families. Quezon City: Ateneo de Manila University Press, 1994.

The Local Government Code of the Phillippines. 1991.

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