The price of peace: Where will the Bangsamoro funds go?

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Over 28,000 civilians have been forced to evacuate war-torn areas in Maguinadanao since late February, after the armed forces intensified their offensive against the militant Bangsamoro Islamic Freedom Fighters.

(CNN Philippines) — Between 1970 and 1996, the government estimates that nearly 120,000 people lost their lives in the armed conflict in Muslim Mindanao. The fighting has also caused the region about P600 billion worth of damage in property and livelihood from 1970 to 2001.

The crisis has dragged the region behind the rest of the country. Government figures show that during the first six months of 2014, more than half (54%) of Muslim Mindanao’s population lived in poverty — that’s more than double the national figure of 25.8%. It's the poorest region in the Philippines. In 2010, its literacy rate stood at 82.5%, way below the country’s average of 97.5%.

Related: Bangsamoro: Many cultures united under Islam

Should the Bangsamoro Basic Law (BBL) pass this year, the new autonomous region stands to collect approximately P35 billion. That’s a large amount of money compared to what other local governments receive. Last year, the Bangsamoro’s neighboring regions of Soccksargen and Zamboanga received about P15 billion and P14 billion respectively from the national government. 

But the region’s budget speaks of its outlying status compared to the rest of the country.

Under the government’s 2015 Budget Priorities Framework, the Bangsamoro province of Sulu was categorized as a Focus Geographical Area (FGA) with “high poverty magnitude,” while the provinces Lanao del Sur and Maguindanao were classified as FGAs with high poverty incidence.

“For development to catch up with poverty in the Bangsamoro region, the government sees fresh funds in rebuilding these war-torn areas as a tool for strengthening the peace,” says Senen Bacani, a member of the government’s peace panel.

Show me the money

In a statement, the Department of Budget and Management (DBM) explained that the P35 billion covers several region-building mechanisms:

  • A one-time-only fund of P1 billion for the proposed Bangsamoro Transition Authority towards organizing their systems and structure
  • A P7 billion first year Special Development Fund (SDF) aimed at rehabilitating the region
  • And an Annual Block Grant (ABG) of P27 billion, amounting to 4% of the net national internal revenue (NIR) collection of the Bureau of Internal Revenue (BIR) less the internal revenue allotment (IRA) of local government units (LGUs).

And that’s just the beginning.

The bill also stipulates that the Bangsamoro government shall take the lion’s share of the region’s taxes: 75% compared to the national government’s 25%. The DBM addss that the Bangsamoro government will retain the government’s quarter share for a period of ten years. Over the next five years, the Philippines will supplement the region’s SDF with an annual payment of P2 billion pesos.

The ABG will also be a boon for the region, given its nature as an automatic grant. The regional government will not be required to defend the amount before congress. Any unspent funds in the grant will revert back to the Bangsamoro region for re-appropriation.

Likewise, the Bangsamoro government will also be given the power to create government owned and/or controlled corporations (GOCCs) and other financial institutions.

And yet, throwing money at the region’s myriad of problems will certainly not improve its situation.

Spreading the wealth

The BBL sets in place several mechanisms for regional development. For instance, it’s parliamentary government is mandated to create an interim cabinet similar to that of the president. It will be composed of 10 ministries that cover a wide scope of affairs:

  • Governance
  • Social Services
  • Development (e.g. Transportation, Agriculture, and Trade & Industry)
  • Education
  • Public Order & Safety
  • Health
  • Public Works
  • Local Government
  • Finance

Likewise, the BBL stipulates that the the regional government may also organize its own social security and pension systems alongside those of the national government. A Bangsamoro Tax Office will also be established, in conjunction with the Bangsamoro’s own tax code.

The regional government will also set up its very own Bangsamoro Police, which shall have primary responsibility over public order and safety. The organization will have offices in the regional, provincial, and municipal levels. It will be headed by the Bangsamoro Police Board, which shall be part of the country’s National Police Commission.

A gender development plan has also been created. The bill stipulates that at least 5% of the total budget appropriation of each ministry, office, and constituent local government unit shall be set aside for “gender-responsive programs.”

Watching the watchmen

The bill also creates an internal auditing body that shall keep track of the regional government's expenditure. Nevertheless, this body will not diminish the Commission on Audit’s power to examine, audit, and settle all accounts.

“Any funds that the national government would release to a new Bangsamoro government shall thereafter be appropriated by their parliament. We expect it to be done in the same way that we judiciously craft our General Appropriations Act each year, following much preparation and deliberation,” says DBM Assistant Secretary for Budget Preparation and Execution Tina Canda.

For his part, Budget Secretary Butch Abad said in a statement that “The administration is working together with the people of the Bangsamoro to create a region that can take full advantage of our country’s many opportunities for growth. As such, we’re doing what we can to support the Bangsamoro and help them become a major economic hub by providing them with the appropriate budgetary support.”