Makati City, July 17 — The Institute for Autonomy and Governance (IAG) and the Congressional Policy and Budget Research Department (CPBRD) on Thursday launched a landmark study examining how national fiscal transfers—particularly the annual block grant—are managed under the Bangsamoro Autonomous Region in Muslim Mindanao’s (BARMM) evolving public financial management system, highlighting both the gains of fiscal autonomy and the institutional reforms needed to sustain it.

Around 50 representatives from BARMM ministries, national government agencies, foreign development partners, and civil society organizations attended the presentation in Makati City, where speakers emphasized that the region’s historic fiscal powers must be matched by stronger governance systems as BARMM prepares for its first regular parliamentary elections.

IAG Executive Director Atty. Benedicto Bacani described the block grant as one of the defining innovations of the Bangsamoro Organic Law (BOL), alongside the parliamentary system, saying both distinguish BARMM from previous autonomous governments.

He said the block grant addresses the long-standing fiscal fragility that limited the effectiveness of earlier autonomous arrangements but cautioned that financial resources alone cannot guarantee successful governance.

"The block grant can either be a blessing or a curse," Bacani said, stressing that its effectiveness depends on the institutions and accountability mechanisms that govern its use.

Bacani also underscored that the block grant remains one of the most contested aspects of BARMM's fiscal architecture. While the Comprehensive Agreement on the Bangsamoro envisions it as a permanent fiscal entitlement, the Bangsamoro Organic Law presents it as transitional funding intended to help the region eventually attain greater fiscal self-reliance. Because the grant is established by statute rather than the Constitution, he noted, its long-term future ultimately depends on political consensus and congressional action, making the strengthening of BARMM's fiscal institutions all the more urgent.

Australian Embassy Second Secretary for Political Affairs Lauren Twine reaffirmed Australia's three decades of support for peacebuilding in Mindanao, describing transparent, responsive, and accountable governance as essential to sustaining peace and development in the Bangsamoro.

She said the study comes at a critical time as BARMM prepares for the Sept. 14 parliamentary elections and expressed Australia's commitment to continue working with Bangsamoro institutions over the coming years.

Funded by the Australian Government, the study offers what researchers describe as the most comprehensive assessment to date of BARMM's fiscal governance framework. It examines how the Bangsamoro Organic Law transformed the region's financing from discretionary allocations under the former Autonomous Region in Muslim Mindanao into a rules-based system anchored on automatic fiscal transfers, including the annual block grant equivalent to five percent of national internal revenue and customs collections.

The report credits BARMM with measurable socioeconomic gains during the transition period. Poverty incidence declined from 60.4 percent in 2018 to 32.4 percent in 2023, while elementary cohort survival improved and infrastructure investments expanded.

Despite these gains, BARMM remains the country's poorest region. Per capita gross regional domestic product remains significantly below the national average, food insecurity continues to affect nearly half of households, child stunting is the highest nationwide, and internet connectivity remains well behind the rest of the country. The study also noted continuing challenges in education outcomes, sanitation, irrigation, and other basic services.

Researchers concluded that while the block grant has given BARMM predictable fiscal resources and allowed it to prepare its own General Appropriations Act of the Bangsamoro without annual congressional budget hearings, institutional capacity has not kept pace with the rapid expansion of available funds.

Among the key issues identified are limited absorptive capacity across ministries, procurement bottlenecks, fragmented financial reporting systems, inconsistent compliance with accountability requirements, and weak locally generated revenues pending the full implementation of the Bangsamoro Revenue Code. The report also noted that the ongoing mandatory review of the block grant formula, expected to inform the 2027 national budget, presents an opportunity to recalibrate fiscal transfers based on actual needs, performance, and revenue generation.

The study also examined the opportunities and risks presented by BARMM's parliamentary system. While the parliamentary model is expected to better align planning, budgeting, and policy implementation, the report warned that the overlap of executive and legislative functions—where Members of Parliament may simultaneously serve as ministers and committee chairs—could weaken independent budget scrutiny unless institutional safeguards are strengthened.

Intergovernmental coordination has likewise improved, with seven intergovernmental bodies now operational and facilitating cooperation on tax reconciliation, infrastructure planning, energy management, and other shared responsibilities between BARMM and the national government.

However, the report identified continuing delays in national fund releases, fragmented infrastructure planning, and inconsistent government data as persistent obstacles to effective implementation.

During the open forum, discussion centered on whether BARMM's public financial management system requires structural reforms beyond technical improvements.

CPBRD Deputy Secretary General Dr. Romulo Emmanuel Miral Jr. emphasized the need to strengthen the connection between planning, budgeting, monitoring, and evaluation through an integrated financial management information system that would enable evidence-based policymaking and real-time oversight of public spending. He also stressed the importance of building technical capacity across both implementing agencies and oversight institutions to sustain reforms over the long term.

Member of Parliament Atty. Ishak Mastura, however, argued that BARMM's more fundamental challenge is the absence of a dedicated Ministry of Finance. He said the current Ministry of Finance, Budget, and Management remains heavily focused on budget preparation, leaving key functions such as revenue generation, cash management, and financial oversight underdeveloped.

Officials from the Ministry of Finance, Budget, and Management responded that the merged structure was deliberately adopted during BARMM's transition to efficiently rebuild government institutions after 2019, while highlighting ongoing reforms such as the drafting of the Bangsamoro Revenue Code and strengthened coordination through the Intergovernmental Fiscal Policy Board. They also cautioned against interpreting the study as suggesting the block grant should be reduced, emphasizing that it remains a core commitment under the peace agreement and continues to address significant development gaps across the region.

Responding to questions from representatives of the European Union, BARMM officials clarified that Sulu's exclusion from the Bangsamoro does not affect the block grant formula because the grant remains fixed at 5 percent of national revenues under the Bangsamoro Organic Law. They added that BARMM continues to coordinate with the national government to ensure Sulu's transition to Region IX does not leave the province behind.

Officials also acknowledged that BARMM faces the challenge of shifting from a presidential-style interim administration to a fully functioning parliamentary government, requiring new institutional practices, stronger coordination mechanisms, and sustained support from development partners as the region enters its first elected parliament.

The study concludes that BARMM's fiscal autonomy is no longer merely aspirational but has become a transformative feature of the Bangsamoro government. Its long-term success, however, will depend on whether institutions can effectively manage public resources, strengthen accountability, expand local revenue generation, and ensure that fiscal autonomy translates into tangible improvements in the lives of the Bangsamoro people.