Wanted: Higher budgets for Mindanao

People from Mindanao have long complained about not receiving their rightful share of the national budget, blaming this for the erstwhile Land of Promise becoming a long-standing promise unfulfilled.

What budget are we talking about here?  Several categories of funding support make up the total resource picture in Mindanao.  National funds come in the form of government appropriations for regionally focused programs and projects of line departments and agencies such as the Department of Public Works and Highways. Mindanao also shares in projects that are nationwide in scope, and in special purpose funds like the Agricultural Competitiveness Enhancement Fund, Calamity Fund, and so on.  There is also funding support from foreign donors, in the form of official development assistance (ODA).  And then there is the share of national revenues that goes to local government units (LGUs) as their Internal Revenue Allotment (IRA), apart from what they can raise locally using taxing powers granted them by law.  Added to all that is the Priority Development Assistance Fund (PDAF) of Mindanao legislators, more commonly known as the congressional pork barrel.

Has Mindanao been getting less than its fair share of these funds? This should not be an issue for the IRA and PDAF, whose allocations are based on formulas applied nationwide.  The question is whether Mindanao is getting a smaller slice than it should of the national budgetary appropriations and of ODA. Let’s see what the official budget data would tell us.

On overall shares of the national budget, Mindanao’s 17 percent share in 2010 is indeed far less than Luzon’s 33 percent (Visayas got 13 percent).  Note though that Luzon covers eight regions compared to Mindanao’s six and Visayas’ three.  Luzon also accounts for a wider geographical area and bigger population than the latter two.  On a per region basis, the National Capital Region (Metro Manila) and Region III (Central Luzon) got the top budget shares, including of ODA.  For NCR, this is expected given the high concentration of population there.  But Region III stood out with a clear edge over all other regions (especially for ODA), and with the former Malacañang occupant having won a seat in Congress, many would have a ready answer why.

The seeming bias against Mindanao largely disappears once population is factored in.  On a per person basis, the national government spent P7,952 for Luzon in 2010, vs. P6,879 spent per Mindanao resident. The difference could readily be attributed to Luzon’s far greater exposure to natural calamities (particularly typhoons and floods) than Mindanao, hence requiring a substantial recurrent budget for repair, relief and rehabilitation.  As for ODA, the true picture is distorted by the way budgets for project management offices, which are largely based in Manila, are all credited to Luzon even if the projects have nationwide coverage and benefits partly accrue to Mindanao as well.  Population is also a major factor in ODA distribution.  If population is considered and costs of PMOs are excluded from share calculations, ODA distribution among the three island groups would not be as heavily skewed as it would otherwise seem.

It is also a common lament that Mindanao proportionally contributes more to national income than what it gets back through the national budget.  However, recent data do not appear to support this view.  Analysis of the 2010 budget would show that amounts distinctly allocated to Mindanao accounted for 17 percent of the total.  Add to this its share in benefits from allocations of agencies for nationwide projects, and Mindanao’s share could even exceed its 18-20 percent contribution to overall gross domestic product (GDP), a share that has hardly changed for many years.

Even then, the case remains strong for affirmative budget action in favor of Mindanao, better justified on the basis of far greater need, rather than hinged on a supposed unfair bias against the island region, which is open to question.  Mindanao has the worst human development and poverty status in the country, having six out of the 20 poorest provinces and 14 out of the 20 poorest municipalities in the country.  By most other yardsticks, Mindanao is clearly the worst off among our island groups. It also has tremendous requirements for reconstruction and rehabilitation of war-damaged communities.  And Mindanao suffers a continuing lag in infrastructure relative to other parts of the country.  These have come about not so much because of inordinate budget neglect, but primarily due to the region’s history of violent conflict combined with faulty governance.  There is no question that Mindanao needs more budget outlays.

But wait: official data show the bulk of LGUs to be persistently reporting budget surpluses. This suggests that fund levels have not necessarily been the most limiting constraint to Mindanao development, especially at the local level.  Hence, extraordinary budget infusions must be calibrated against Mindanao’s ability to absorb and manage additional funds.  It must also be viewed against the need to strengthen the capacity of LGUs to mobilize local resources and improve self-reliance, a key element in the long-held advocacy for self-determination for the island region.  Infusions of substantial additional budgetary resources for Mindanao cannot come without prior investments in improved local capacities for development management, including in planning, program and project formulation, fiscal management and monitoring and evaluation.  Otherwise, we may be simply throwing more money into a bottomless pit.

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