Last week, I had the great pleasure of moderating the fourth Ruperto P. Alonzo Memorial Lecture at the UP School of Economics (UPSE). This was organized by alumni of the School’s old Program in Development Economics (PDE), in honor of their late professor Sir Ruping (as he was lovingly called), who passed away back in 2017.

These days, the PDE program is known as the Master in Development Economics (MDE) program. But it has always catered to training economists and analysts in middle-level and technical positions in government, the private sector, and civil society organizations.

Anyway, the lecture last week featured Acting Secretary Rolando “Rolly” Toledo of the Department of Budget and Management (DBM), himself being a product of the PDE program. The theme was: “Protecting Fiscal Integrity: Fighting Corruption in Public Finance.” The discussants were Professor Cielo Magno, my colleague at the School and ardent advocate of budget reforms, and Dr. Jun Miral of the Congressional Policy and Budget Research Department. Also in the audience was former budget secretary Benjamin Diokno, a product of the early batches of the PDE program, and an emeritus professor of the School.

The lecture was memorable enough as a rare moment where government officials talked openly about the budget scandal that exploded in 2025. But it was made extra memorable by the fiery questions posed in the open forum by Professor Emerita Solita “Winnie” Monsod. (You can watch part of that here.)

First, she asked Secretary Toledo: “I’d like to know when did your office (or you personally) find out that there was something wrong? Because things don’t just explode, they build up…. Where did you go wrong?”

Secretary Toledo replied that he found out when it was “declared or presented” by the President. He added that unless a “financial and physical report” is submitted by an agency or validated by the Commission on Audit, the DBM doesn’t know that the problem exists. He also said that they issued a circular mandating agency heads to certify (through a notarized document) that programs they will pay are legitimate.

I asked Ma’am Winnie is she’s satisfied with the response, and she said emphatically, “No.”

She added, “How could you not have known? It’s beyond belief that we could not have known about this.” She pointed out (correctly) that the DBM itself should monitor the implementation of the national budget as part of its mandate, even if it is not a frontline agency to fight corruption.

At that time, Ma’am Winnie was already commanding the middle of the auditorium. Then she turned her to Ben Diokno who was seated to her left. She said, “And then we find that your [Diokno’s] assistant for so long… We have a budget secretary who resigned because of corruption…” Ma’am Winnie was referring to former budget secretary Amenah Pangandaman, a longtime assistant of Diokno and also a product of the PDE. Pangandaman resigned in November 2025 as investigations into flood control projects were heating up.

Ma’am Winnie then exclaimed, “What has happened to the School of Economics? I’m very, very disappointed, I must say… It hurts me that this corruption scandal occurred when members or graduates of the School of Economics were in positions of responsibility…”

This is a hard wake-up call for the School. But let me also add that it’s easy to overstate the role of the School. In basic economics, we teach that people respond to incentives, and the wrong incentives can lead to bad or misguided decisions by government officials, no matter how technically competent they are or no matter what school they came from.

Turning back to Secretary Toledo, Ma’am Winnie said, “I’m sorry if I offended you, you don’t get a very good grade from me.”

It was a historic moment because up until now, the role of UPSE alumni in the budget anomalies was kind of hush-hush. Ma’am Winnie’s put out in public an issue that hounds the School and its reputation.

Who authorized unprogrammed fund releases?

I followed up with questions on unprogrammed funds, noting that Congresswoman Mika Suansing, the current chair of the House Appropriations Committee, confirmed in 2025 that at least P141 billion in flood control projects in 2023 and 2024 were funded using unprogrammed appropriations.

Secretary Toledo confirmed that it was former budget secretary Amenah Pangandaman (a longtime assistant of Ben Diokno and also a graduate of the PDE program) who signed the Special Allotment Release Orders (SARO) that allowed the downloading of funds for anomalous flood control projects.

Ma’am Winnie interjected to point out that in 2008, the late budget secretary Emilia Boncodin already called out that unprogrammed funds were being abused. “Why do the technocrats not bring this out more forcefully?” She then asked Ben Diokno to clarify who approves the release of unprogrammed funds — the budget secretary or the president.

Diokno stood up, got a mic, and insisted that it’s the president who approves, and that the secretary cannot release it by himself or herself. He said that the secretary signs but they “must have a memo to the president, you cannot release it on your own — unless you changed the rules,” implying that during his time, things were a bit different.

But Secretary Toledo rebutted, “As far as I know, the [budget] secretary is the one who signs and approves the release from the unprogrammed appropriations,” so long as the law’s requirements are fulfilled.

This exchange gives mixed signals but has huge implications. Either Malacañang knew, or former budget secretary Pangandaman acted autonomously. (READ: Marcos, DBM can’t wash hands of ‘mangled’ 2025 budget – ex-finance chief)

On the one hand, if we follow Diokno’s logic, it would appear that President Marcos would have first-hand knowledge of flood control project approvals, if the budget secretary needs permission from the Palace before releasing unprogrammed funds. This would demolish the idea that Marcos was in any way “surprised” that flood control corruption was happening. At the same time, this serves to remove responsibility from the former budget secretary Pangandaman, a long-time assistant of Diokno.

On the other hand, the official line from Secretary Toledo is that the budget secretary signs and approves releases from unprogrammed funds, without needing the approval of the President. This would absolve the President but put the blame on Amenah Pangandaman who signed all the releases.

Later, there was agreement among economists in the room that the “original sin” came from the way Congress bloated unprogrammed funds. Cheekily, Cielo said that perhaps next time former congresswoman Stella Quimbo — another product and previous faculty of the School — should be invited to answer for the budget anomalies, insofar as she was the former vice-chair of the House Appropriations Committee (second-in-command to Zaldy Co and ally to former speaker Martin Romualdez).

Wake-up call

In sum, Ma’am Winnie’s remarks last week are a much-needed wake-up call for the School. It cannot be denied that alumni of the School (especially Amenah Pangandaman and Stella Quimbo) were implicated in the whole budget mess that opened the floodgates to public works corruption. Other alumni were bureaucrats involved in the budget process one way or another.

Sure, it is unfair to blame the School entirely for the corruption scandal. But for good or bad, the School does produce graduates who find themselves in the halls of power later in their careers. And I do hope that at UPSE we are producing young, promising economists who are not just technically savvy but also possess strong moral fiber to speak out truth to power.

The broader lesson, I think, is about how easily technical expertise can be neutralized by broken political incentives. If we don’t fix these incentives, then expect otherwise good or competent people to stay silent or be eaten up by the system 10, 50, or even 100 years from now. – Rappler.com

Dr. JC Punongbayan is an assistant professor at the UP School of Economics and the author of False Nostalgia: The Marcos “Golden Age” Myths and How to Debunk Them. In 2024, he received The Outstanding Young Men (TOYM) Award for economics. Follow him on Instagram (@jcpunongbayan).

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