I don’t doubt Sen. Bam Aquino’s good intentions when he filed a bill calling for the use of blockchain technology to manage the national budget. Sorry Senator Bam but technology is still no match to the evil minds that populate our bureaucracy.
Some years ago, there was this bright idea to computerize the operations of the Bureau of Customs to reduce corruption. Civic minded citizens and groups donated computers but it didn’t work.
Elizabeth Lee, an industry leader eager to modernize customs operations was told by a customs clerk that as far as they were concerned, “asin lang ang katapat ng mga computers.” They put salt on keyboards and leave food where the computer wires are so rodents will chew on the cables and render the computers useless.
The Customs people didn’t like computers. Their ability to perform magic on import documents is curtailed. Their side incomes will plummet if they cannot manipulate the documents.
That was years ago and maybe now, they have accepted computers after figuring out how to use the machines to cheat the government on duties importers must pay.
I am not an expert on computers and on programs like blockchain, so I asked a friend for his thoughts. He worked in a top international computer technology company and helped design and implement the digital banking system of a major bank.
He said he had the same doubts I had on Sen Bam’s bill when he read Draft Senate Bill 1330.
“Having spent years implementing IT systems, my background in Industrial Engineering has taught me one clear lesson: even the best technology will fail without the right process and culture to sustain it.
“Before we even get to blockchain, we need to confront a fundamental reality – no technology can, on its own, solve corruption or false reporting. As the DPWH mess has shown, garbage in, garbage out.
“If local governments or national agencies submit falsified documents and reports, blockchain will only permanently record those falsehoods. Without institutions fulfilling their checks-and-balances mandate, and without a culture of integrity and accountability, corruption simply persists in a digital form.
“If we look at countries consistently ranked among the least corrupt – Denmark, Finland, Singapore – their budgeting systems do not rely on blockchain. Instead, they ensure transparency by publishing budgets, mid-year reviews and audit reports on open portals accessible to the public.
“Accountability comes not from technology, but from strong auditing institutions (COA, DBM, Congress) and vigilant civil society oversight.”
That’s why we are hopelessly screwed. Corruption starts with and is enabled by COA, DBM and Congress.
“This also raises a more fundamental issue about the role of legislation. Congress should not legislate specific technologies, but rather set policy frameworks that endure.
“Technology will evolve; the law must provide principles and safeguards that apply across time. If blockchain becomes obsolete in five years, do we rewrite the law and rebuild the national budgeting system all over again?
“And blockchain itself is not without limitations. Its consensus and decentralization mechanisms create latency issues – Bitcoin, for example, handles only about seven on-chain transactions per second.
“Linking all national and local budget systems into one blockchain would make latency a serious issue. To bypass this, exchanges like Binance rely on off-chain transactions, but that introduces another layer where manipulation can occur before data is written on-chain – once again, garbage in, garbage out.
“Finally, we must be realistic: this will be a bespoke system, requiring massive time and cost to design, build and test. And who will define the requirements? The very people embedded in the current system, who have already allowed process failures to take root.
“Occam’s Razor: the simplest solution is the best solution! Don’t chase new technology. Instead, strengthen and reinforce the processes and culture that ensure transparency and accountability.”
But Senator Bam was not the first politician to think of using technology to beat corruption. In Albania, they have designed an AI Assistant named Diella and made her a virtual cabinet member as “minister for public procurement.”
Diella is tasked with policing the country’s most corruption-prone corner: public procurement.
Albanian Prime Minister Edi Rama says the avatar, shown in traditional Albanian dress, will run tenders and publish decisions with total transparency, to remove bribery and favoritism.
Diella is empowered to evaluate bids and declare winners. But can automation fix corruption, a real human problem?
I asked my friend what he thought about the Albanian avatar. He was unimpressed.
“This can still be gamed, for example – Garbage in, garbage out: If tender requirements, budgets or eligibility criteria are entered incorrectly – or deliberately skewed – Diella will faithfully execute them.
“Hidden loopholes: Officials or vendors could write overly narrow specifications that only certain companies meet, steering contracts to preferred bidders.
“If the procurement blacklist database excludes certain red flags (like past corruption or conflicts of interest), the AI can’t account for them.
“Leaders could present Diella as incorruptible, while quietly using policy levers to steer money similar to our budget insertions.
“AI will execute based on the defined business rules and parameter set. Once it executes, yes, the algorithm can be incorruptible and binary – but as pointed out, if the input data is manipulated, it will decide based on the datasets provided.
“I think no matter what tech you implement, including blockchain, it will not work if you don’t have good governance. Governance is about organizational culture (that people follow processes and policies) and values (integrity and accountability).
“An Indian friend just gave me a quote – ‘While intelligence is becoming artificial, stupidity will always remain original.'”
Put another way for us, let us revise that quote: Intelligence may be fast becoming artificial, but Pinoy bureaucratic corruption will remain original and will always find ways to steal from us.”
So, Senator Bam, esep esep some more pa before you present your bill to the Senate.
Boo Chanco’s email address is [email protected]. Follow him on X @boochanco
