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Budgeting Under Stress Aguinaldo, 1899

The first President’s dilemmas on budgeting


By Jaime C. Laya

The Filipino-American War began 120 years ago, in February 1899, ending the uneasy eight-month peace since June 12, 1898 when Philippine independence was proclaimed.


CAPT. MIONG Emilio Aguinaldo, ca. 1899 (Google Images).

Emilio Aguinaldo, then all of 29 years old, was President of the Republic and Commander in Chief of the Armed Forces. Barred by Arthur MacArthur from entering Manila, Aguinaldo made Malolos, Bulacán the Republic’s capital.

He had to establish countrywide authority, formulate a Constitution and basic laws, form and run a government, seek recognition of Philippine sovereignty by world powers, advocate Philippine interests in Spanish-American peace negotiations, build an army that could fight America should war erupt, maintain domestic peace and order, and see to it that the economy—commerce, industry, agriculture—continues functioning.

Considering the pressures of 1898 and the subsequent upheavals, it’s a miracle that an 1899 budget law was even enacted. Fighting had begun on Feb. 4, 1899, and on March 3, Malolos was in flames, fighting widespread, and government in retreat.

Secretary of the Treasury Arcadio Rosario submitted a budget proposal to Aguinaldo on Feb. 12, emphasizing the urgent need for a budget of income and expenditures to ensure effective management of available resources despite inadequate data and the impossibility of a comprehensive assessment of national requirements, adding that arms were needed for the preservation of national honor and integrity. Aguinaldo forwarded the proposal to Congress and with legislative approval, the Appropriations Act was signed on Feb. 19. It was in Spanish, printed in Barasoain by Z. Fajardo.

The Spanish Regime’s 1896-97 revenue came to R17.474 million but the new Republic’s expected 1899 national revenue was only R6.342 million, a precipitous 64 percent drop. With Americans controlling Manila, lost customs duties and taxes accounted for one-third of the revenue decline. This, however, unlike today’s colossal budget deficits and, despite everything, Aguinaldo’s budget was balanced, with national expenditures set at R6.324 million. Local government budgets were similarly balanced, with revenues of R0.827 million and expenditures of R0.705 million.

Expectedly, the lion’s share of projected expenditures was for the military, 79 percent. A poor second was for public works and communications, six percent. Other sectors were worse off.

Citing its sacrosantos ideales of equality and fraternity, a  special tax on non-Christians was abolished. The budget also suspended the collection of cédulas personales, replacing it with what was effectively a temporary and graduated wealth tax to finance the war and in a remarkably little-known article, charged administration and liquidation fees on properties owned by religious corporations and administered by government-designated persons under a provision of the Malolos Constitution. Acknowledging the fragility of budget estimates, first to go in case revenues fell short were authorized perks to officials in the order of need for recipients’ services.

We still remember Aguinaldo’s times. Antonio Luna was the subject of a recent movie. Repertory Philippines is reviving the musical “Miong” based on the general’s early years; academics continue to debate over Aguinaldo vs. Bonifacio and vs. Luna; and Leon Gallery is auctioning an “explosive” Aguinaldo-Bonifacio document.

The real Emilio Aguinaldo, please stand up.

Notes: (a) The first shot of the Filipino-American War was fired on Feb. 4, 1899 at the boundary of American- and Filipino-controlled areas, by the corner of Sociego and Silencio Sts., Sta. Mesa, Manila. Malolos was captured by the Americans on March 31, 1899; (b) Emilio Aguinaldo was born on March 22, 1869; and (c) Arcadio Rosario (1846-1923) was from Pandacan, Manila. He was a lawyer and a Mason and was part of the Philippine government-in-exile after the 1897 Pact of Biak-na-Bató. Active in the framing of the Malolos Constitution, he was noted for his advocacy of the separation of church and state. During the American Regime, he was the justice of the Peace and Bureau of Internal Revenue official.

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