In a move to enhance the country’s financial management and boost openness, some government officials are advocating for the implementation of blockchain technology—a secure, unchangeable digital record of transactions—for managing and displaying budget information.
Last month, Senator Bam Aquino presented Senate Bill 1330, officially known as the Philippine National Budget Blockchain Act.
Similarly, Representative Javi Benitez from Negros Occidental’s 3rd District introduced House Bill 4380, a parallel proposal in the House of Representatives, which echoes Senator Aquino’s initiative.
The core objective of both bills is to modernize how the national budget is handled, focusing on transparency and responsibility by leveraging blockchain. This would ensure that budget data is accessible, easily understandable, and encourages public participation.
The proposed legislation designates the Department of Information and Communications Technology (DICT) as the primary implementing body. It will be responsible for engaging qualified private sector companies, technology experts, and academic institutions to develop, set up, and maintain the blockchain system.
The Department of Budget and Management (DBM) will oversee the integration of the existing budget process into the new blockchain framework. This includes providing timely and accurate information and working closely with the DICT and other relevant government bodies.
Furthermore, the Commission on Audit will incorporate blockchain technology into its auditing procedures.
Last Thursday, the Senate Committee on Science and Technology commenced discussions on Senator Aquino’s proposed bill.
“While not a singular solution, many believe that blockchain technology can significantly address existing issues. Recording the budget on a blockchain ensures that every cent of public funds is accounted for,” Senator Aquino stated during the meeting.
‘A Robust Instrument’
Both versions of the Philippine National Budget Blockchain Act emphasize that blockchain technology is “a robust instrument” with the potential to transform the national budget, highlighting that its “design ensures responsibility.”
Blockchain makes all financial transactions transparent, secure, and easy to audit.
LEARN MORE | Blockchain Explained: How it Could Stop Corruption
IBM defines blockchain as an unchangeable and secure digital ledger that records all transactions within a network.
In a similar effort to promote transparency and fight corruption, the Department of Public Works and Highways (DPWH) recently collaborated with the Blockchain Council of the Philippines (BCP) to create a publicly accessible blockchain-based digital ledger, initially focusing on foreign-funded infrastructure projects.
This partnership aims to develop an “Integrity Chain”—a live dashboard that tracks project spending and progress, allows citizens to provide feedback and report irregularities, and offers secure records to prevent corruption.
As part of its own transparency initiatives, the DBM has also partnered with BayaniChain and ExakIT Services to launch blockchain.dbm.gov.ph, the nation’s first blockchain-supported budget transparency platform.
This portal documents Special Allotment Release Orders (SAROs) and Notices of Cash Allocation (NCAs) as verifiable, on-chain entries, enabling the public to monitor how funds are authorized and released.
Public Accessibility
The World Economic Forum (WEF), in an online article, suggests that blockchain can protect public procurement processes from vulnerabilities like corrupt practices from both government officials and private companies.
“During the planning phase, public officials establish evaluation standards for bidding companies. Then, during the bidding evaluation, officials score companies based on these standards,” the WEF explained.
“Without transparency, compromised officials have ample opportunity to manipulate the evaluation. They might retroactively change the standards or alter company bids,” it added.
“Blockchain can ensure that any modification is public, that the original information is saved, and that a record of who made the change exists,” according to the WEF.
Potential Pitfalls
However, Art Samaniego, co-founder of Scam Watch Pilipinas and an IT expert, cautioned that while blockchain is tamper-proof, it “doesn’t verify the truthfulness of the data… it preserves what is entered, but cannot confirm if it’s accurate.”
“If a fraudulent project, fictitious spending, or fabricated invoice is uploaded, the system permanently records the falsehood. Garbage in, permanent garbage out,” he said.
The IT expert also questioned the identity of the validators, who “in theory… verify records before adding them to the chain.”
“But who are these validators? Which agency or company controls them? The real power in a blockchain system lies with those who control the validators. If a single agency or private provider controls who becomes a validator, the benefits of decentralization are lost,” Samaniego said.
“Blockchain is not a miracle solution. It can make cover-ups more difficult, create audit trails, and expose attempts to alter records, but it cannot detect collusion,” concluded the Scam Watch Pilipinas co-founder.