Former National Treasurer Leonor M. Briones Expresses Reservations about P-Noy's Conditional Cash Transfer Program

By Chanda Shahani

The former National Treasurer Leonor M. Briones said that the Aquino Administration's PhP 21-billion conditional cash transfer (CCT) program will not substantially alleviate poverty.

In an interview with the Diliman Diary, Briones a professor public administration at the National College of Public Administration and Governance at the University of the Philippines (U.P.) at Diliman said that CCT's “are all right but only as one of a more comprehensive package for poverty reduction.”

She expressed concern about the “absorptive capacity” of the Department of Social Work and Development to make use of its huge increase of funding of 125% or an increase from the current PhP 12 billion to PhP 21.9 billion in 2011.

To cover a total of 2.3 million beneficiaries in 2011, the Aquino administration has increased the program's budget.

DSWD Secretary Corazon “Dinky” Soliman has said in the past that to ensure smooth program implementation, the additional 1.3M family beneficiaries next year will be categorized into phases. High poverty incidence areas like the Autonomous Region in Muslim Mindanao, Caraga, Zamboanga Peninsula, Bicol region, Samar and Leyte; covering 79 provinces in all will be prioritized.

But Professor Briones said the CCT is still a program of handouts.

Briones, convener of civil society group Social Watch Philippines, said CCT “is not a leading answer to poverty”, adding that as a policy response, CCT is deficient, and does not justify the huge loans made to fund the program.

She said that the huge CCT allocations could be a source of fund for other items that needed boost in funding especially in education, environment, agriculture and health.

“The expansion of the conditional cash transfer should be accompanied by the expansion of the supply side, for example, improvement of public health service, education and transport facilities and services in order to be successful,” she said.

“How can you give money for a child to go to school in a place where there are not enough schools?” she asked. Social Watch says that the fact that Philippine public investment in education and health is low and has generally declined between 200 and 2006 means that public investment in health and education must increase.

Briones said the program expansion should be deferred pending the submission of the program impact evaluation on the dole-out program and the completion of the National Household Targeting System for Poverty Reduction.

“Increasing the budget for inputs does not necessarily lead to increases in outputs and outcomes if the implementing capacity is insufficient,” she said.

She said that on Latin America, historical experience has shown that it was difficult to wean away recipients of CCT monies and that there must “be a clear exit strategy” including the provision of basic services and a chance for impoverished families to have employment opportunities.

Professor Briones is also the lead convenor of Social Watch Philippines which has taken the stand that the expansion of CCTs have to be accompanied by expansion of the “supply side,” that is improvement of public health services in order for this to work.

Social Watch's stand is that the CCT program expansion should be deferred pending the submission of program impact evaluation on a dole-out program agreat part from multilateral funding from nd completion of the National Household Targeting System for Poverty Reduction.

“We need to know what are the clear returns in exchange for borrowing all this money to fund this program,” she said. The current CCT program relies on the release of Land Bank of the Philippines (Landbank) ATM cards to beneficiaries. But the Landbank funds will be sourced in turn from the National Budget from funding earmarked by loans from multilateral institutions such as the World Bank and the Asian Development Bank.

Social Watch said that the National Government was borrowing US$ 405 million from the World Bank and US $ 400 million from the Asian Development Bank for the CCT program which only serves to increase the national indebtedness in implementing a strategy that will have limited impact on poverty reduction.

Social Watch is asking the National Government to come out with a comprehensive strategy to reduce poverty which includes social and economic policy; embedding the CCT program within the framework.

It is also important, Professor Briones said said that civil society and other groups should be involved in independently auditing and monitoring how the funds are being spent.

On the other hand, an August 24, 2010 study co-authored by U.P. School of Economics Dean Arsenio Balisacan said that said the administration of former President Gloria Macapagal-Arroyo's Conditional Cash Transfer (CCT) initiative under its Pantawid Pamilyang Pilipinong Program (4Ps) appeared to be effective as a vehicle for addressing short-term poverty and long-term human capital development and impliedly suggested that Aquino administration should continue it (see: http://diliman-diary.blogspot.com/2010/08/4.html).

The study said CCT programs are widely implemented in many developing countries, particularly in Latin America and more recently in Asia. The World Bank says CCTs "provide money directly to poor families via a “social contract” with the beneficiaries – for example, sending children to school regularly or bringing them to health centers. For extremely poor families, cash provides emergency assistance, while the conditionalities promote longer-term investments in human capital."

The UPSE study said that assessments of these programs show significant positive impacts on nutritional intakes, schooling performance,and reduction in poverty and inequality. "Of all the government's current subsidy programs, the CCT initiative holds perhaps the most promise for breaking the vicious cycle of poverty and, hence, is a good candidate for upscaling toward a national anti-poverty program," the study said.

Former National Treasurer and U.P. NCPAG Professor Leonor M. Briones on U.P.'s budget and COA's 2009 U.P. Audits

(Professor Briones at the NCPAG Library. 

Photo by: Chanda Shahani)

A total reliance by the University of the Philippines (U.P.) System on exclusive government funding is no longer realistic when the government itself is facing a PhP 300 billion deficit said Former National Treasurer and National College of Public Administration and Governance (NCPAG) Professor Leonor M. Briones in an interview with the Diliman Diary yesterday.

A former nominee for U.P. President, Professor Briones that a there will have to a maximization of the different properties of the university, but given the very intelligent but differing ideologies of segments of the U.P. System which has 1000 Ph.Ds and many more with advanced degrees in a total faculty population of 4,000, the new President of U.P., Alfredo E. Pascual will have to respect the various issues involved, including the historical antipathy to commercialization by many segctors within the U.P. System

Former President Gloria Macapagal-Arroyo committed herself to the construction of the Engineering and Science complexes which is why the budget became bigger. Now that the construction works are finished, then the budget reverts to its former status, ProfessorBriones said.

Former President Gloria Macapagal-Arroyo committed herself to the construction of the Engineering and Science complexes which is why the budget became big. Now that the construction works are finished, then the budget reverts to its former status.

She said that lead convenor in the Philippines of Social Watch their battle cry for U.P. was “to increase and not to restore the budget.”

She said that by way of analogy if you were the owner of a house, then it would cost so much to maintain it. But if you decided to build an extension of the house, then this would cost so much more and the overall budget would go up.

She said that the costs for maintaining the house or the expenses of U.P. fell under Maintenance and Other Operating Expenses (MOEE) and this hs not been removed but now that the house annex or in U.P., the critical works for new buildings have been completed, then it stood to follow that the overall budget would revert back to its original status.

The proposed budget as submitted to Congress by the Department of Budget and Management and which still remains in bicameral conference committee as of this writing and gives the U.P. System PhP 5.52 billion in 2011 as opposed to PhP 6.9 billion in 2010 and PhP 8.2 billion in 2009 (see: http://www.dbm.gov.ph/NEP2011/SUCS/NCR/A.8.pdf ). 

The crux of the debate centers on the interpretation of whether the PhP 1.39 billion decrease in subsidy from 2010 to 2011 really represents a decrease in budgetary allocations or not because critical capital expenditure requirements of the U.P. System have already been met. 

Professor Briones says the completion of the Science and Engineering complexes in U.P. Diliman strictly speaking meant that very critical works have already been capitalized. However, there would nevertheless still need to be an increase in U.P.'s budget, because the wherewithal needed to operate these new facilities was lacking.

Moreover other factors such as a constant deterioration of the real value of the peso, inflation, and the needs to fund U.P.'s other strategic initiatives for growth and to maintain its overall standards of excellence in an increasingly competitive educational environment both globally and locally necessitated an increase in U.P.'s budget anyway and this should still be funded by the national government she said.

No to increasing tuition fees for students but yes to maximizing U.P.'s land assets 

Professor Briones said that she was against the increase in tuition fees for students considering that U.P. was a national university and that 33% of the entire country still lived below the poverty line. Instead U.P., being a land grant university should utilize its existing properties to generate revenues related to academic work, such as research centers and housing for retired faculty to ensure a decent quality of life even if they are no longer teaching.

She said there were two models for asset maximization with Harvard University at one end and Thailand's Chulalongkorn University at the other end. Given that the government really doesn't have a lot of money with a current budget deficit of PhP 300 billion, Professor Briones said that in the long run she would like to see U.P. sourcing 80% of its budgetary requirements from other revenues (but not including tuition fee increases), and 20% from the government.

She said that she preferred the Harvard model for revenue generation on revenues generated by state-of-the art research and other facilities driven by the expertise of its faculties. She said that although some pundits had espoused the University of Chulalongkorn in Thailand as a model worthy of emulation given that the Thai university even had bars and hotels and other revenue generating activities which were less relevant within the context of a university environment.

In 2009 the COA's Consolidated Audited Annual Report (CAAR) of the U.P. System showed a summarized Sources and Uses of Funds statement for the entire U.P. System showing that in 2009 the subsidies from the National Government were PhP 6 billion, and other revenue was PhP 1.4 billion.

She called for a comprehensive land use plan for all of U.P.'s land assets. For example, she said that in Talisay City, Negros Oriental U.P. owned hectares of sugar land that was now generating revenue as a sugar research facility. Unfortunately, there were many more U.P. properties that were populated with informal settlers and the issue of maximizing revenues from these properties was still left hanging.

She said that when she was Chairperson of the Board of Siliman University it became possible to systematically increase the salaries of the faculty every year due to a comprehensive land use plan that resulted in additional revenues for Siliman University.

In comparison, U.P. also leases out the 37.5 hectare North Science and Technology Park, located along Commonwealth Avenue in Diliman where the U.P.-AyalaLand Technohub is located. She said that the original concept for the usage of this property, as hatched under former U.P. President Emil Javier was for the property to house big research institutions interfacing with the best scientific and engineering minds in the U.P. faculty backed up by U.P. graduate and undergraduate students.

Instead of this original vision being implemented what is on hand these days in terms of locators are low-end call centers who are even at the bottom-end of the food chain the outsourcing industries as these add the least value compared to knowledge process outsourcing locators or research labs who require higher-end technical, scientific and engineering talents that U.P. has.

Aside from land use, she said that from a revenue perspective, AyalaLand was making even more money by subleasing the property it was renting out from U.P. to higher-end restaurants and U.P. could have swung a better deal and should do so in the future with its other properties.

She said even though former U.P. President and now Senator Edgardo J. Angara had coined the term, “University of the Philippine System,” it was still a misnomer to regard the U.P. System as one entire organic entity with overlapping and redundant course offerings straddling the entire Philippine archipelago.

The U.P. System is actually made up of seven constituent universities serving their geographic areas of jurisdiction with particular strengths which is why it would be a mistake to only have a department or Institute of Biology or other foundation course in only one constituent university as thiis base o knowledge would be needed no matter what was the area of specialization in life sciences, for example.

She said that while U.P. Diliman had the best public management program in NCPAG, there was still a need to have this program in the other constituent universities, many of the faculty of whom come from NCPAG anyway, she said.

“We should be looked at as different universities without any redundancies,” she said of the constituent universities comprising the U.P. System.

The great challenge, she said is for all the constituent universities to pursue the development and improvement of quality graduate education programs .

You should also bear in mind that there is a big difference between public institutions versus private instutions. While the intellectual expectations and standards are similar in public institutions such as U.P., the very public character of U.P. creates less freedom of movement, she said.

She said that for example for U.P. to become a more flexible institution, Faculty salaries had to become more competitive if you want to retain its quality faculty.

The evolution of university-affiliated foundations and the need to remove conflicts of interest 

Professor Briones said that as a natural consequence, foundations evolved in order to augment the incomes of faculties in such a way that no resources were siphoned off from the coffers of the state.

She said that even Congressmen and Senators put up their own private foundations because of the great bureaucratic restrictions placed upon expenditures of funds coming directly from the National Government’s budgets. “Even honest Congressmen with the best intentions in the world to find imaginative ways to help their constitutents put up foundations inorder to maximized their freedom of movements,” she explained.

But she also said that her long experience as an administrator in U.P. demonstrated to her that U.P. faculty members who were administrators who simultaneously headed foundations such as the U.P. Foundation did so honestly and should be given the benefit of the doubt.

“Malicious minds can impute bad motives into structural deficiences in the system” which inherently create conflict-of-interest type situations, she said. However she said while she did not believe that U.P. officials were benefitting from these, it was still important to remove the conflict of interest by requiring that the U.P. President or official heading any of these university-affiliated foundations not be allowed to do so “for structural reasons because the temptation is always there.”

Professor Briones referred to Diliman Diary reportage on the issue, including a Diliman Diary report last November 5, 2010 (http://diliman-diary.blogspot.com/2010/11/breaking-news-coa-releases-2009-audit_05.html) which quoted the Commission on Audit's 2009 Consolidated Audited Annual report which criticized the current U.P. Administration for tolerating the existence of university-affiliated foundations that were headed by ranking U.P. officials which created undue advantage

She added that the COA CAAR of 2009 showed that in 2009 the U.P. System had assets of PhP 36 billion and liabilities of PhP 13 billion and so in the balance sheet the remaining equity of the government owned U.P. System was PhP 23 billion which seemingly represented a lot of money.

Fortunately she said that former College of Business Dean Jaime Laya who was a Department of Budget and Management Commissioner worked out an arrangement with COA when she was Secretary to the Commission on Audit which allowed U.P. to keep its unused income instead of it reverting back to the National Treasury.

Does U.P. Have Lots of Money? NOT.

Professor Briones showed the Diliman Diary the consolidated financial statements of the U.P. System derived from COA's 2009 CAARs (to download these, please click: http://www.coa.gov.ph/Audit/AAR.htm) and pointed out areas that she thought were troubling. "We have to improve and respond to these findings. Dapat huwag pabayaan," she stressed.

"For example, Senate Finance Committee Chairman Franklin Drilon thinks that the U.P. System has lots of money, because if you look at the ending cash balance of the 2009 statement of cash flows, the figure is positive PhP 12 billion," she said.

"What Senator Drilon did not consider is that most of this money is already programmed for legitimate university expenses and is therefore already spoken for," she said.

COA's scathing criticisms of U.P.'s multi-year refusals to allow the opening up of the books of university-affiliated foundations to COA oversight adds to the impression that U.P. is rolling in easy money from private donations and other funding when it is in fact not. However, U.P. would make its case stronger with DBM and Congress if there were fewer highlighted findings from COA, she said.

Professor Briones also pointed out to COA's report about the operations of the University Hotel in U.P. Diliman which had a gross income of PhP 30 million in 2009. Unfortunately, other details such as net income were not available because the U.P. Administration has not followed COA's previous year's recommendations to submit the financial reports of University Hotel operations for consolidation in the U.P. System books.

"It was important in the interests of oversight, for the concerned authorities to have access to the contract between the University Hotel and the U.P. Administration," she said.

She also pointed out to the following items from COA which tended  to show that the U.P. System was not exercising good financial management:

• PhP 151.65 million in unutilized scholarship grants in 2009.
• In the 2009 U.P. System Balance Sheet, while PhP 36 billion in total assets might look good, a deeper analysis showed that there was PhP 445 million is accounts receivable, which meant that the U.P. System as a whole was not doing a good enough job in collecting money owed to the System.
• Unreconciled book and bank balances (U.P. System wide)
• While total Property Plant and Equipment might show a hefty PhP 24 billion in 2009, in reality much of this equipment may or may not be in good shape and this was an uknown precisely because updated inventories of these assets did not yet exist.

"We have to be very careful on the accounting side," Briones said if U.P. is to successfully make its case with the national government for an increase in its annual budget.

(With reporting by Chanda Shahani)

What Bureau of Treasury says about Professor Briones

Prof. Leonor M. Briones served as Treasurer of the Philippines from August 1998 to January 19, 2001. Her two-and-a half years stint with the Bureau of the Treasury is marked with consistent overperformance. In 1998, the Bureau generated P22.53 billion, which almost doubled its target of P11.204 billion.

In 1999, its income reached P26.180 billion or a hefty excess of P3.783 billion over its target. Her flagship project is the Small Investors Program, the main thrust of which is democratization of government securities and empowerment of the small savers. It aims to sell small denominated government securities to small savers or the "ordinary man on the street." Launched in November 1998 with total SIP placement for the year amounting to P8.700 million, total SIP investments for treasury bills reached P694.205 million with 2,598 accounts opened and 8,389 transactions when she left the Bureau.

As Vice-Chairman of the auction committee, Prof. Briones played a vital role in lowering the interest rate. In 1998 the rate of the 91-day treasury bills, which is used as benchmark by banks and other lending institutions in transacting business, averaged only 14.99% notwithstanding the financial crisis that greatly affected the economies of most Asian countries. The national government was able to generate savings in interest payments by as much as P7.896 billion for the year. In 1999 the average 91-day t-bill rate even went lower to 9.98%, which is also lower than the projected rate of 10.50% for that year. This translated to P351 million savings in interest payments for the government.

Other performance highlights of the Bureau during her term include: conduct of various training programs and Special Academic Program to give chance to employees to complete their undergraduate course; improved Information Systems; intensive campaign for collection of unclaimed balances which resulted in the collection of P20.568 million; preparation for the reconstruction of the Ayuntamiento Building; establishment of the BTR Provident Fund; expansion of the BTR Library; revival of the National Treasury Employees' Union (NATREU); and the expansion of Association of Women in Treasury (AWIT) membership.

Source: Past Treasurers of the Philippines. (2003). Available at: http://www.treasury.gov.ph/btrorg/pasttop.html.

Editor's note: This article was sent in to the Facebook Page of the Diliman Diary by the Facebook page of Prof. Leonor M. Briones for UP President last October 22, 2010. In view of continued reader interest in all available information about all the nominees for U.P. President we are posting this in this weblog. We continue to encourage our readers to send in their comments, thoughts and material about all issues to this weblog at: http://diliman-diary.blogspot.com/ or http://dilimandiary.com/ or to our Facebook page.

Prof. Leonor Briones's U.N. Speech: "FULFILL YOUR PROMISES"

(Editor's note: In light of the Diliman Diary's policy of providing balanced coverage over time, we are reposting below the speech of National College of Public Administration and Governance (NCPAG) Professor Leonor M. Briones regarding the Millenium Development Goals to world leaders in the 2005 World Summit High Level Plenary Meeting of the 60th Session of the United Nations General Assembly. The link from which the speech was taken from is the Facebook page of Prof. Leonor M. Briones for U.P. President (http://www.facebook.com/?tid=1472018239607&sk=messages#!/note.php?note_id=121381014582448&id=105231616202962&ref=nf). However, the link itself was emailed by Professor Briones to one of our readers, Lila R. Shahani, who forwarded the link to the Diliman Diary. Ms. Shahani is the sister of the Editor, Mr. Chanda Shahani. The Diliman Diary is encouraging any or all the nominees for U.P. President to email us at dilimandiary@yahoo.com any relevant material in the interests of giving our readers the maximum amount of information regarding their capabilities).

(Facebook page Admin) Five years ago, it was Professor Leonor Magtolis Briones, faculty of the University of the Philippines' National College of Public Administration and Governance (UP-NCPAG), who delivered a strongly-worded statement on the Millenium Development Goals to world leaders in the 2005 World Summit High Level Plenary Meeting of the 60th Session of the United Nations General Assembly. She was selected among the best and the brightest in the world's civil society in a very rigorous selection process on choosing who to speak for and in behalf of them. Here's a copy of her statement:

FULFILL YOUR PROMISES

Statement Submitted to the United Nations General Assembly in behalf of Civil SocietyPresented by Prof. Leonor Magtolis Briones, Social Watch, International Facilitating Group on FfD and Global Call to Action against Poverty.

14 September 2005.

The Millennium Development Goals will not be reached by 2015. This is the assessment of civil society organizations five years after their adoption by the global community of nations. The promises of the Millennium Declaration are not fulfilled; the financial resources identified under the Monterrey Consensus have not all been generated. The leading actions on financing for development which heads of state and leaders of government agreed upon have not been fully implemented.

As a consequence, more than a billion people continue to live in absolute poverty, girl children are not able to go to school; infant mortality rates remain high; mothers still die in childbirth, the HIV pandemic continues to escalate, the environment continues to be devastated, and global issues on trade, on debt and on ODA remain unresolved.

Mobilizing domestic financial resources for development. Developing countries are continually reminded that they are responsible for mobilizing domestic financial resources. But, how can they collect more taxes when their economies stagnate and are stunted because of unfair terms of trade, because of massive debt burdens and structural adjustment programs?

Mobilizing foreign direct investment. We deplore conditionally in structural adjustment programs which compel countries who are unprepared to open their markets and their natural resources to foreign investment.

Developing countries demand that foreign investors should not only exercise corporate responsibility. They need to be transparent in their operations. They have to be accountable to their host countries whose natural resources they exploit for profit.

International trade. Trade is the single most important external source of development financing. Ironically, developing and least developed countries continue to suffer from unfair terms of trade. As poignantly stated by an African official, “You demanded that we faithfully pay our debts, and we did. You asked us to restructure our economies. Our people underwent indescribable suffering but we did it. You even demanded that we change our leaders, and we did. But you refuse to buy our cotton, our cocoa and our other products!”

ODA. Substantial increase in ODA to developing countries has not been achieved. A number of rich countries steadfastly refuse to honor their 30-year commitment to share .7% of their GNP. We ask the General Assembly to remind recalcitrant member countries of this promise.

External Debt. The debt crisis continues to rage in many countries in Asia, in Latin America and in Africa. While the G8 committed to cancel all the debts of eligible HIPCs, countries which are euphemistically described as “middle-income” teeter on the brink of disaster as they struggle with unsustainable debts.

It has been two decades since the last global debt crisis. The babies who have survived are now 20 years old. They still carry the scars of malnutrition, inadequate education and poor health. They have been tragically deprived of the basic capacities for human development.

These countries have been further shaken by natural catastrophes, bad terms of trade, bloodletting and conflict.

We therefore urge the General Assembly to support debt relief for “middle income” countries whose economies have been devastated by natural catastrophes like the tsunami, as well as those with high levels of poverty and debt.

The persistence of debt crises underscores the need to reform the international financial system. We demand transparency and accountability from multilateral institutions. Developing countries voice and vote in the governance of these institutions need to be strengthened.

Follow up of Monterrey Consensus

Gender Equality. We likewise urge the members of the General Assembly to allocate resources to promote gender equality in their respective countries.

Promises, Promises. The heads of state and leaders of governments have made many promises for decades, some of which are the World Summit on Social Development in 1995, the Beijing Conference also in 1995, the G7 meeting of 1999, the Millennium Summit in 2000, the International Conference on Financing for Development in 2002, the Johannesburg Summit, also in 2002, and the G8 Summit in Gleneagles.

Promises, promises. This General Assembly is not the time for more promises. It is time to fulfill old and new promises. The poor of the world cannot wait until 2015. Fulfill your promises!

Diliman Videos of the Week (Part 6): GNN COOP HOUR by: Prof. Virginia A. Teodosio w/ Ms. Riva Aquino

(Part 1 of the video. To see the remaining videos, please click on:
http://www.youtube.com/watch?v=i9LnNRDV7hU)

The above video does not represent the entire picture of U.P. Diliman National College of Public Administration and Governance (NCPAG) Professor Teodosio, who is a nominee for the position of President of U.P. To get more details about all the nominees, please click on this link: http://diliman-diary.blogspot.com/2010/08/3_30.html and to read their curriculum vitae and position papers, please check the U.P. website at: http://www.up.edu.ph/features.php?i=221

Diliman Videos of the Week (Part 2): U.P. Diliman National College of Public Administration and Governance Professor Leonor Briones talks about Poverty Alleviation

Editor's note: The above video does not represent the entire picture of Professor Briones, who is a nominee for the position of President of U.P. To get more details about all the nominees, please click on this link: http://diliman-diary.blogspot.com/2010/08/3_30.html and to read their curriculum vitae and position papers, please check the U.P. website at: http://www.up.edu.ph/features.php?i=221