Annual Block Grant Advantages and Potential Challenges

By Hon. Engr. Baintan Adil Ampatuan
Member, Bangsamoro Transition Authority
August 30, 2019

It may be said that the budgetary process that the Autonomous Region in Muslim Mindanao (ARMM) had to go through annually was contrary to the idea of autonomy. For indeed, it is incredible how an entity can achieve the essence of self-rule when its exercise of fiscal power is subject to certain procedures requiring close coordination with, if not the approval of the national government. Fortunately, this issue has been addressed in the passage of Republic Act No. 11054 or the Bangsamoro Organic Law (BOL).

One of the important provisions of the BOL is the Block Grant. This provision is the best argument that the BOL is much stronger and viable than the ARMM Organic Law and can make the Bangsamoro Autonomous Region work. The Block Grant allows the Bangsamoro Government more flexibility on how to use the funds to address Bangsamoro Government development goals and objectives, including lasting peace and sustainable development. It allows the Bangsamoro Government to determine specifically how to allocate and spend the funding in accordance with the rules and guidelines for implementation by the Department of Budget and Management (DBM), unlike the past ARMM where the national government predetermined the allocation of funds.

It is in this Block Grant where fiscal autonomy makes sense in Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) and makes the Bangsamoro Autonomous Region meaningfully autonomous in character and substance. The old ARMM never enjoyed fiscal autonomy or had no fiscal autonomy at all.

Under the National Expenditure Program (NEP) for 2020, a total of P70.6 billion will be allocated for BARMM, with the following breakdown: a) P63.6 billion as annual Block Grant; b) P5.0 billion as Special Development Fund for the rebuilding, rehabilitation, and development of its conflict-affected communities as part of its normalization process; and, c) P2.0 billion as the BARMM’s share in the taxes, fees and charges collected in the region.

The total BARMM allocation is more than twofold higher compared to the P31.117 billion ARMM budget. This P70.6 billion is equivalent to an estimated P16,529.75 per capita allocation and twice the ARMM’s P8,299.001. This certainly is a huge resources and a great potential to expand services in the Bangsamoro areas.

Of the P31.117 billion 2019 ARMM budget, more than P15.0 billion pesos was earmarked for construction of roads, bridges, seaports, shore protection, water system, drainage system, housing, livelihood, and basic services among others. With BARMM’s almost P39.0 billion or 55.0 percent of Block Grant by 2020, substantial areas and poor families will benefit from socio-economic initiatives.

As provided in the BOL, the following are the conditions to unlock the Block Grant: 1) passage of annual appropriations law by the Parliament that gives priority to education, health, and social services; b) exclusion of procurements of firearms, ammunitions, armaments, and explosives; c) Bangsamoro Development Plan (BDP) to be furnished to the Department of Interior and Local Government (DILG); d) observance of national laws and the budgeting rules and regulations implemented by the DBM and DILG applicable to local government units; and e) setting of performance standards and targets for each sector in the annual appropriations law.

The BOL also provides general limitations for the use of funds including among others, the requirement that the total appropriations, whether annual or supplemental, for Personal Services (PS) of the Bangsamoro Government for one fiscal year shall not exceed 45 percent of the total revenue sources of the Bangsamoro Government. This figure is slightly higher than the actual allocation for PS of ARMM. Under the 2019 General Appropriations Act, out of P31.1 billion allocation of the ARMM, P13.3 billion or 43 percent thereof is allocated for PS.

Aside from the conditions above, the Parliament needs to consider the following: a) approved agency organizational structure, staffing, and position classification; b) agency priority PAPs based on BDP targets; and c) Bangsamoro Economic and Development Council (BEDC) that will adopt the BDP and deliberate on the annual priority programs and projects (PAPs).  All of these must be complied with as requisites for responsive planning, investment programming, and budgeting.

The next step is for the Bangsamoro Parliament to pass an annual appropriations law allocating the Block Grant to various agencies and programs according to the powers and functions of the Bangsamoro Government.

The challenge now before the Parliament is the timing of the passage of the appropriations law along with the priority legislations and the reorganization of the bureaucracy as provided in Article XVI of the BOL.

The budget implication of the additional areas such as Cotabato City and the 63 barangays in North Cotabato is another challenge. Will the budget of the national government agencies (NGAs) like Department of Education, stationed therein be charged against the Block Grant? Or will the officials and employees of said NGAs remain as such, such that the Bangsamoro Government shall not appropriate funds to provide for their salaries, wages or any form of emoluments in accordance with Section 20 (c), Article XII of the BOL?

Will the Block Grant be able to respond to long-term problems of poverty, neglect and slow socio-economic growth? What will be the geographic spread of the fund allocation for mainland and island provinces? What will be the share of devastated areas like Marawi City? These are some of the challenges the annual Block Grant is expected to answer.

While the Bangsamoro Government is grateful for the recognition of its autonomy through the annual Block Grant and its appropriation, it recognizes the fact that the struggle does not end here. Spending and utilization of the huge annual Block Grant is another question. Will the transition government be able to translate these funds into tangible programs and projects given its new form of government, work force, and systems and processes?

It is reminded that public office is a public trust. As the 1987 Constitution requires, public officers and employees must, at all times, be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency; act with patriotism and justice, and lead modest lives.

May the Bangsamoro Government overcome these challenges and deliver to the Bangsamoro people the services they deserve.

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1 Based on 2015 Census on Population, ARMM population is 3,781,387 and 4,273,149 including the new areas of BARMM.

 

Hon. Engr. Baintan Adil Ampatuan is a member of the Bangsamoro Transition Authority. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of Access Bangsamoro, its proponents, or affiliates.