ECONOMIST Solita ‘Winnie’ Monsod and former Finance Secretary Jesus Estanislao urged the Department of Budget and Management (DBM) to strengthen fiscal integrity, transparency, and accountability in government spending.
Both are former chiefs of the National Economic and Development Authority (Neda).
Speaking at the Fiscal Policy Conference, Monsod said the country’s economic growth remains below its full potential due to persistent corruption and inefficiency in the use of public funds.
‘Corruption pushes the country’s production inside its potential frontier,’ she said, citing the economic principle that measures how efficiently a nation uses its resources.
Monsod warned that despite the government’s promise of fiscal discipline, wasteful and misallocated projects continue to burden taxpayers and distort national priorities.
She questioned the DBM’s oversight role in approving questionable infrastructure projects, particularly flood control works in unnecessary areas, saying the department must account for its monitoring failures.
‘If the DBM didn’t see that flood control projects were being conducted in unnecessary places, who would?’ Monsod asked.
The economist also raised alarm over the government’s ballooning Unprogrammed Appropriations, which she described as possibly ‘a modern and deadlier version’ of the abolished Priority Development Assistance Fund (PDAF).
She noted that while this is intended to be released only when government revenues exceed targets, it has expanded dramatically from below P200 million before 2023 to between P400 billion and P700 billion in recent budgets.
‘Is the DBM ensuring that the conditions for release are met?’ Monsod said.
‘Or has the system turned into a moral hazard, where revenue targets are deliberately set low to justify more spending?’ she added.
Monsod explained that while macroeconomic indicators may appear stable, fiscal integrity depends on more than numbers. It relies on governance, honesty, and a moral sense of responsibility in handling public funds.
‘The DBM must live up not just to the ‘budget’ in its name, but to the ‘management’ as well,’ she said.
‘Fiscal future depends on trust’
In the same event, Estanislao called for deeper reforms in fiscal governance and urged the DBM to institutionalize systems that promote transparency and accountability across all agencies.
‘Our fiscal future depends on restoring trust in public institutions,’ Estanislao said.
He emphasized that the national budget should not only serve as a financial instrument but as ‘a moral document’ that reflects the values and priorities of the government.
Estanislao also encouraged the DBM and other agencies to strengthen citizen participation and performance-based management, ensuring that every peso spent delivers measurable results.
He added that fiscal discipline must be linked to good governance and long-term development, rather than short-term political interests.
Both economists agreed that addressing fiscal challenges requires not only technical competence but moral courage to confront systemic corruption.
‘Before we can drive strategic and practical solutions for sustainable economic growth, we must first define the real problem,’ Monsod said.
‘And that problem is not merely technical, it is moral.’