Rightsizing government bureaucracy

The proposal of the Department of Budget and Management Secretary Amenah Pangandaman to reduce government bureaucracy and save P14.8-billion outlay in manpower budget is one urgent task for the new government to undertake, which we cannot disagree with.

The facts are that government dealings are subjected to one huge inefficient bureaucracy. There were 1,862,543 permanent government positions for 2021. “Salaries range from P25,900 (lowest average) to P76,300 (highest average, actual maximum salary is higher).” The average monthly salary includes housing, transport, and other benefits. P48,800 per month average per worker totals a compensation outlay of P1.09 trillion annually.

There are several caveats, though, in retrenching employees:

It will add to the unemployment problem of 6-8 percent, which the government is already confronted with right now;

The mass poverty index of 23 percent could worsen if the micro, small, and medium enterprises cannot operate in full swing, post-COVID, to generate employment;

The shortage in basic staple food supplies of rice and meat, and the pressure of 6 percent general inflation, will be very social serious concerns, similar to Sri Lanka’s;

Depreciation of the peso and our trade imbalance will find the government groping for dollar funds to import oil and other vital industrial needs.

Assuming 20 percent of the bureaucracy is wasteful “paper-shuffling” time that can be reduced or removed from the budget, the savings could even be P218 billion annually—quite a hefty contribution to debt repayment. A 20-percent reduction or more, however, can be achieved without retrenching people at this time of great hardship to find work, but by merely reducing the workdays of the nonessential workforce by one or two days a week. Moreover, the savings on the daily expenses of reporting to work will be substantial in family savings.

More scientific review, however, needs to be done with bureaucracy-wide time and motion studies that will confirm the redundancies.

MARVEL K. TAN, CPA,[email protected]