Senator Bam Aquino is at the forefront of ushering in a new era of fiscal transparency in the Philippines with a proposal to place the Filipino national budget on a blockchain. At the Manila Tech Summit in September, Aquino acknowledged the grandiosity of the proposal but spoke to its potential use in working to change how public funds management and tracking is done overall. The goal of the proposal is to make every peso spent by government traceable in real-time, a daring proposal that could put the Philippines on the map as one of the leaders in leveraging technology for public accountability.
Building on Existing Digital Foundations
This forward-thinking proposal isn’t starting from scratch; it’s an expansion of a system already in place. The Department of Budget and Management (DBM) currently operates Asia’s first blockchain-based budget platform. The current infrastructure is already capable of logging critical fiscal documents and its public ledger can be used for Special Allotment Release Orders (SAROs). Citizens can consult these documents online and they exist immutably. It creates an important head start for the Philippines and shows that the technology is not conceptually viable but operationally so.
The Technology Under the Hood
The existing system used by the DBM is built on Polygon, which is an Ethereum compatible network that is the public transparency layer. This technology offers protection and flexibility to the system. A local technology company, BayaniChain; developed the platform, while a technology called Prismo was used for encryption and various data tasks. The framework produces an immutable record of government documents, which cannot be altered or modified, after their publication. By connecting the DBM’s internal systems to a publicly available blockchain, this leading edge technology fundamentally embeds accountability into the financial process, making it extremely difficult to commit fraud, or act corruptly, without detection.
A Powerful Tool in the Fight Against Corruption
Although blockchain is not a panacea to eradicate corruption forever, its application in governance has the potential to be impactful. Paul Soliman, CEO of BayaniChain, pointed out that in itself the technology does not eliminate wrongdoing, however, its immutable records means that it is significantly harder to conceal financial improprieties. The full on-chain model of transparency – as envisioned by Senator Aquino, would allow anyone to account for every peso – from initiation, to allocation, to spend. With this kind of granular real-time transparency, citizens and civic groups would have power, thereby increasing public confidence that government spending is for the public good.
Global Implications and Potential Hurdles
If the bill is enacted, the Philippines would be the first to put all of its national budget on a blockchain, and this would show a powerful example to others. It shows a pattern emerging where nations are beginning to use decentralized technology, not only to increase efficiency, but also to build citizen trust in their public financial management processes. Still, it would not be easy sailing. Political support is still a distant variable, as this would be a monumental effort, requiring support among a large group of political actors, and massive political will. And challenges remain, perhaps most importantly, integrating a new system into the already complex system of the Philippine government, as well as ensuring that all citizens can access the system, whether or not they are “tech-savvy.”
The Road Ahead
As Senator Aquino prepares to formally file the legislation, the country waits to find out. The bill is equally a technical upgrade but also provides a sense of what it means for a country to choose transparency and trust the possibilities of modern technology to enhance government. If implemented successfully, a fully blockchain-based budget would be a model for the whole world to see that radical transparency is not only possible, but absolutely necessary for a more trustworthy and accountable government.
