[In This Economy] Unpacking the key shake-up in Marcos’ financial crew

So many issues are taking place in Philippine politics today.

Amid rumors of an tried ouster of President Ferdinand Marcos Jr., the Iglesia ni Cristo (INC) held an enormous two-day rally on the Quirino Grandstand, culminating in a speech of Senator Imee Marcos brazenly calling the President (her brother) a drug addict.

In the meantime, there’s been a significant shake-up within the Marcos administration. Romeo Lumagui, a godson of the President, stepped down on November 12 from his place as commissioner of the Bureau of Inside Income. The Palace gave no good motive for this.

However the larger shocker is the concurrent resignations of Govt Secretary Lucas Bersamin and Price range Secretary Amenah Pangandaman on November 17, ostensibly “out of delicadeza.” Days later, Bersamin mentioned he didn’t actually resign, however was faraway from workplace slightly unceremoniously. Adrian Bersamin, head of the Presidential Legislative Liaison Workplace and grandnephew of the previous govt secretary, was additionally eliminated.

Lastly, additionally on November 17, Finance Secretary Ralph Recto changed Lucas Bersamin as the brand new govt secretary, and Frederick Go, Marcos’ particular assistant for funding and financial affairs, turned the brand new finance chief.

Let’s attempt to unpack this shake-up.

Pangandaman and the Bersamins

Amenah Pangandaman’s exit got here within the wake of the movies launched by former lawmaker Zaldy Co, who’s overseas and on the run.

In a sequence of movies, Co alleged that in 2024 he was known as up by Pangandaman, who supposedly relayed a message from President Marcos instructing the insertion of P100 billion in funds within the 2025 funds.

Co supposedly confirmed this directive of Marcos with Adrian Bersamin. Days later, Bersamin, Pangandaman, Co, and ex-speaker Martin Romualdez allegedly met the place Co was handed paperwork containing a listing of P100-billion price of public works that Marcos supposedly needed to insert. Co then supposedly pushed again, saying that solely P50 billion might be inserted.

Initially, there are evident gaps in Co’s story. Information present that large insertions within the funds, significantly in unprogrammed funds, have been taking place since not less than 2022, and that these insertions ballooned for the reason that 2023 funds (Marcos’ first funds). (See the graph beneath.)

It’s additionally true that each Pangandaman and Congress are responsible for the ballooning of unprogrammed funds. In 2023, the proposed funds (finalized by Pangandaman) included greater than P588 billion in unprogrammed funds. That’s the biggest allocation for unprogrammed funds within the Nationwide Expenditure Program ever (actually, that’s bigger than the proposal for unprogrammed funds within the earlier three years mixed).

What this implies is that even within the funds preparation and proposal levels, the manager (by means of Pangandaman) was already approving a bloated funds particularly for public works. 

Pangandaman as soon as tried to deflect blame by claiming that they approve company budgets “in good religion.” However that’s a flimsy excuse. The Division of Price range and Administration (DBM) is not only in command of the ministerial job of compiling the proposed funds of businesses, they’ve the ability and accountability to vet proposed initiatives even earlier than they submit the proposed funds to Congress.

Congress is way responsible, too. They expanded the unprogrammed funds yearly since 2022 —  the ultimate unprogrammed funds had been bigger than the proposed worth by 37% in 2023, 159% in 2024, and 235% in 2025.

One other inconsistency in Co’s story is that he’s severely understating the extent to which insertions had been made within the 2025 funds. Within the bicameral convention committee final yr, they inserted P288.65 billion for the funds of the Division of Public Works and Highways (DPWH). That’s nearly triple what Co was alleging the President needed to insert.

If the funds course of had been actually innocent, Marcos ought to face by Pangandaman who’s been nothing however a loyal soldier thus far. However by letting go of Pangandaman, Marcos appears to be attempting onerous to deflect blame away from himself. Within the course of, he seems to be corroborating Co’s video to some extent, and giving it some credence.

Are Pangandaman and the Bersamins turning into handy scapegoats of Marcos? If that’s the case, will they ultimately squeal? I’m awaiting their very own tell-alls. Within the meantime, Pangandaman and Co have to be held accountable for the funds shenanigans. Their elimination from their earlier posts should not result in a path of handy exoneration. They have to not go scot-free.

By the best way, a simple strategy to corroborate Co’s statements is to ask former congresswoman Stella Quimbo, who’s the vice-chair of the Home appropriations committee. However the place is Quimbo, precisely? And why is she useless silent in all this?

Recto and Go

Recto got here and went as finance secretary, however he was unable to pursue much-needed reforms resulting in fiscal consolidation.

Beneath his watch, the debt ballooned a lot that the debt-to-GDP ratio rose to 63.1% (and that is nonetheless rising, by the best way). Recto additionally oversaw the implementation of some new taxes, just like the tax on digital companies and the Capital Markets Effectivity Promotion Act or CMEPA, however not an excessive amount of else occurred.

In relation to Recto’s legacy, the very first thing that involves my thoughts is his complicity in ordering a money sweep of presidency companies, which led to PhilHealth remitting P60 billion to the Treasury and the Philippine Deposit Insurance coverage Company (PDIC) remitting not less than P107 billion. All these had been caused by anomalous provisions within the 2024 nationwide funds.

It’s nearly sure now that the P107 billion from PDIC was used to fund flood management initiatives. This makes Recto complicit within the bastardization of the nation’s funds, and in addition a key enabler within the flood management mess.

On high of this, by the best way, Recto additionally helped to arrange the Maharlika Funding Fund and even turned its chairperson. Recall that Maharlika was funded utilizing the capital of state-owned banks and even some cash from the Bangko Sentral ng Pilipinas. It is a crimson flag that ought to have met some resistance from the sitting finance chief. However Recto was all in.

I’m unaware that Recto did something significant to resolve the rising disaster involving the pension of navy and uniformed personnel (MUP). He appears to have left that large drawback for future finance chiefs.

This brings us ultimately to Frederick Go, the brand new finance chief. His appointment comes with a evident battle of curiosity. Do not forget that earlier than becoming a member of authorities in January 2024, Go was one of many extra vital members of the Gokongwei household, and was CEO of Robinsons Land Company, which is legendary for its malls, resorts, resorts, and workplace buildings.

Whereas he supposedly let go of those companies, he’s nonetheless a part of the Gokongwei clan, and there’s at all times an opportunity that as finance chief he’ll implement public insurance policies that may profit one way or the other his clan’s many enterprise pursuits.

Whether or not within the type of tax breaks or fiscal incentives or contracts, who is aware of? The mere appointment of a outstanding businessman as finance chief opens up substantial dangers for cronyism — harking back to how businesspeople got outstanding roles previously, particularly through the Martial Legislation regime of Ferdinand E. Marcos.

Positive, Go could also be a sensible man, however operating a enterprise is quite a bit totally different from operating the nation’s funds. Public coverage is an entire totally different ballgame from company insurance policies, and as finance chief he shall be typically known as on to make tough choices that will at instances run counter to his household’s pursuits.

Then once more, Marcos is a strolling embodiment of battle of curiosity, and appointing Go as finance chief is sort of a footnote to the broader corruption scandal the nation is at the moment dealing with.

In some ways, the current Marcos Jr. administration is repeating and reliving the regime of Marcos Sr. – Rappler.com

JC Punongbayan, PhD is an assistant professor on the UP College of Economics and the creator of False Nostalgia: The Marcos “Golden Age” Myths and Learn how to Debunk Them. In 2024, he obtained The Excellent Younger Males (TOYM) Award for economics. Comply with him on Instagram (@jcpunongbayan).