Use budget guidelines creatively
A budget should follow strategy. But if budget guidelines are followed too strictly and not creatively, the strategy will fail. This is especially relevant at this time, when Congress is deciding on our 2027 national budget.
Here are four areas to consider as they affect the Department of Agriculture’s (DA) budget. They find application in several other departments as well.
Private-sector participation
One guideline is that only DA officials are allowed to explain its budget proposal to the Department of Budget and Management (DBM). This guideline is strictly followed. But there are times when DA officials do not have the same understanding as the private sector for a particular issue. For the best information so that the right decision is made, the private sector should be allowed to join the DA in explaining the issue to the DBM.
Here is a specific case. There was a proposal asking for an additional amount for the private sector to monitor the DA budget. If the private sector were allowed to explain the proposal’s benefits in terms of decreasing corruption and ensuring more effective fund use, perhaps the DBM would have approved their proposal. This is because the private sector does the actual budget monitoring.
Last year, with a budget of only P19.5 million, the waste from corruption and negligence decreased by P372 million from the previous year. If the private sector joined the DA in explaining this with examples they themselves experienced, this may have resulted in a better DBM budget decision.
DBM methodology
The DBM starts its budget process by giving the DA a scenario with two tiers. The first tier is to continue existing programs. This means determining what is needed to keep the current services running as the main priority. The second tier is to fund new or expanded programs. The first tier is assumed largely to be a given. Most of the discussion is, thus, done on the second tier.
Though this has merit, it should not be strictly followed. Sometimes, budget items in the second tier have more strategic significance than those items in the first tier. Therefore, these should be replaced. From the example above, if the additional budget monitoring from the second tier has more strategic impact than continuing some of the policy work in the first tier—that is, a higher return on investment—then the second tier recommendation should be funded, while that for the first tier is reduced
Appealing to Congress
There are times that the DA does not agree with a budget proposal from the private sector. Consequently, Congress does not hear the proposal because it hears only the DA proposals during the Congressional hearings.
For the appropriate cases, the private sector should continue fighting for its proposal by going to Congress. If they have a good case, Congress must then use its “power of the purse” by approving the proposal. Not all “budget insertions” are maliciously motivated. If these additional budget proposals follow the correct strategy, they should be considered assets rather than liabilities.
Budget release
Once the budget is approved, its phased releases transform the budget rhetoric into reality. What should determine the release decision should be its support for the agreed-upon strategy.
A guideline that has often been applied too strictly is that no additional funds can be released unless there is an identified high utilization rate. Though this motivates high fund utilization, withholding these funds sometimes seriously jeopardizes strategy fulfilment. In addition, it damages government credibility when these funds have already been committed to fulfill a strategy.
Rules are not meant to be broken. But guidelines are not rules. When they are followed too strictly without considering the big picture, they hinder rather than help. Instead, we must use guidelines creatively, keeping in mind strategy fulfillment as their main objective.
