Monday, August 26, 2013

Economists have mixed views on the abolition of PDAF - Business Mirror

Details Category: Top News Published on Monday, 26 August 2013 20:49 Written by Cai U. Ordinario

DESPITE thousands of protesters that gathered at the Luneta to call for the abolition of the pork barrel or the Priority Development Assistance Fund (PDAF) on Monday, local economists remained split on whether or not to retain it.

Economists like Philippine Economic Society (PES) President Alvin Ang believe the PDAF should be abolished mainly because the execution of projects is not part of the functions of the legislative department.

"[The] legislative and executive works have different functions. [The] PDAF contradicts that. It's better to leave projects for [the] Executive. [The] PDAF, until abolished, should be used for productivity improvement of the agriculture sector, social protection and infrastructure support," Ang said.

University of the Philippines economist Ernesto Pernia also supports the abolition of the PDAF. He said the government could instead transfer the funds to the care of executives of local government units (LGUs), who "know better" where the funds can be used.

But, Pernia said, ideally, the funds should be directed to primary needs, such as education, health and agriculture.

The funds, he added, could be used to address the Philippines's infrastructure deficit by increasing funds for farm-to-market roads, postharvest facilities and irrigation.

"The funds can still be allocated for the use of LGU executives. They know better where the funds are needed in their district, compared to congressmen," Pernia said.

On the other hand, University of Asia and the Pacific (UA&P) School of Economics Vice Dean Cid Terosa said the PDAF is still needed, particularly for projects that would "redound to the common good."

If the PDAF were used for the common good, Terosa said, this could lead to multiplier effects that would make it easier for the Philippines to eradicate poverty and hunger.

Based on the Asian Development Bank's Key Indicators for Asia and the Pacific 2013, the Philippines was only able to reduce extreme poverty by 0.7 percentage point based on the proportion of the population living on less than $1.25 a day.

Data also showed that instead of decreasing the number of the poorest of the poor between 1994 and 2009, there was an increase of 2.45 million Filipinos living below $2 a day.

"Yes we need the PDAF to pursue projects that would redound to the common good but the common good should not be identified by the politicians themselves but by the people in general. It should be a PDAF by the people and for the people. Not a PDAF by and for politicians," Terosa said.

"When used for the common good, the PDAF would yield huge output, income, and employment multiplier effects that can be sustained over the lifetime of politicians and the long run," he added.

Terosa added that the "monopolistic control" of the PDAF should be removed and that accountability in the use of the funds should be stressed.

He expressed support for the President's opinion that the PDAF should be overhauled and also subscribes to the recommendation of Vice President Jejomar Binay to conduct a full accounting of the use of the PDAF in the current and past administration.

"We must remove the monopolistic control, unbridled discretionary power and weak accountability of politicians and their minions. I agree in principle with the President and Vice President. I hope they have the will to pursue the principles that they are fighting for," Terosa said.
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