Chiz on zero-based budgeting approach: I don’t see it happening

Senator Chiz Escudero, chair of the Senate Finance Committee, delivers a privilege speech on the 2014 General Appropriations Bill, Tuesday morning. According to Escudero, the 2014 budget proposal, which includes funds for climate change adaptation and disaster risk reduction programs and projects in the amount of P70 billion, will also include specific funding for the rehabilitation of the Visayas on top of the existing calamity fund to be sourced from items which can be postponed in the 2014 national budget. (MNS photo)

Senator Chiz Escudero, chair of the Senate Finance Committee, delivers a privilege speech on the 2014 General Appropriations Bill, Tuesday morning. According to Escudero, the 2014 budget proposal, which includes funds for climate change adaptation and disaster risk reduction programs and projects in the amount of P70 billion, will also include specific funding for the rehabilitation of the Visayas on top of the existing calamity fund to be sourced from items which can be postponed in the 2014 national budget. (MNS photo)

Senator Chiz Escudero said he was dubious about the zero-based budgeting (ZBB) of the Department of Budget and Management (DBM) and feared that government agencies were unable to comply with the budget approach put in place in 2010 by the Aquino administration.

In the budget hearing of the Department of Environment and Natural Resources (DENR) on Sept. 8, Escudero, who chairs the Senate Committee on Finance, said that while the ZBB sounded good, “in practice, I don’t see it happening in agencies.”

According to DBM, through ZBB, programs and projects that will be identified inefficient and ineffective will be terminated and scaled down. On the other hand, those that are still capable of delivering the predetermined end result, especially if the projects directly affect the poor, will be given additional budget.

However, Escudero explained that if the government agencies were given a price ceiling—the maximum price that a seller can charge for a product or service—that perhaps they can work on while preparing their budget proposals, and if there was a need to adjust their programs appropriately, then they will do the same per region and each region will probably do the same per province.

He further said there was an urgent need to identify how much it costs for a department or agency to build or create one unit of product or service, known as per unit cost, in order to see a more vivid structure of the budget.

“If it’s indeed zero-based budgeting then I guess all of you can answer me how much is the per unit cost of doing anything in government. That’s why it is zero-based so I get to find out how much does it cost me,” Escudero said.

“How much does it cost government to secure the Filipinos from criminals? How much does it cost the government to secure us against external threats through AFP? For example, we can only secure X number of our population because this is how much it actually costs to secure the lives and property of our citizens,” Escudero explained. “It is the same on the part of DENR. How much does it cost to monitor soil, water and air? How much does it cost to plant a tree, maintain it and protect it until its sturdy enough to grow on its own?” he asked.

However, DBM Director Teresita Salud said ZBB was an approach in budgeting and did not literally mean zero.

“We are not saying it will start from zero, but determining exactly the efficiency or effectiveness of a particular program or project. If that is so, we may be able to support this project or program to be able to achieve its objective,” Salud said. “Such that we are not into the unit cost, actually, we are into performance base. So at any rate, unit cost is also determines when we budget, such that we would know exactly how much will go to what particular activity or program,” said the director on how DBM sees the ZBB approach.

Despite DBM’s explanation, Escudero is insistent in getting DENR’s per unit cost in order to see a clearer view of their budget, particularly on the National Greening Program (NGP)-established plantations, which according to the Commission on Audit  (COA) findings were not monitored and non-compliant with the NGP requirements during validation.

The DENR is operating under its P23 billion budget this year. However, for Fiscal Year 2015, its budget was reduced to P21 billion since the agency had unfinished programs.

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