Lawyer warns that Philippine blockchain budget proposal risks centralization and privatization

Philippine lawmakers are considering Senate Bill 1330. blockchainBased solutions implemented for the national budget of the country.

Efforts to establish an immutable record of the country’s budgetary system on-chain are intensifying as public scrutiny of government spending increases following a wave of anti-corruption protests demanding accountability for some $9.2 billion earmarked for public projects that Philippine President Ferdinand Marcos Jr. has flagged as fraudulent. Reuters Report.

The bill was proposed by Sen. Paolo Benigno Aquino IV in late August and has an initial budget of approximately $8.6 million. Several House proposals are being tailored around the bill, according to a Senate hearing convened earlier this month.

Dialogue with legal experts decryption They support the bill’s transparency goals, but warn that the bill’s technology-heavy design could create risks instead of curbing corruption.

Florin Hilbay, former Attorney General of the Philippines and author of the following books: Bitcoinquestioned whether the system addressed actual governance failures.

Hilvey said the debate surrounding the bill appears to be “confused” because it assumes that “using blockchain will automatically promote transparency and prevent corruption.” decryption.

“Similar to the current system the government uses to track the flow of funds, it can be improved in the following ways: Any “You can do exactly the same thing with a centralized blockchain as you can with multiple redundant software,” Hilvey said, adding that such an idea could reduce the term to “just a marketing tool.”

Asked about safeguards against privatization and monopolization of access to public financial data, Hilvey offered an analogy.

“Think of the budget, the national ledger of public funding, as a national highway,” he said, explaining how the proposal would “essentially turn that public highway into a public-private partnership highway operation.”

He added that despite the prospect of increased transparency, the centralization of the chain risks “exposing critical public infrastructure to the potential for significant failure.”

“Immutability is a result of chain integrity. Immutability is not built into a blockchain just because proponents say so,” Hilvey said.

Public data, privatization risks

said Russell Geronimo, founder and managing attorney of technology-focused law firm Geronimo Law. decryption While on-chain transparency measures may help “uncover falsified records,” they do not address government infrastructure issues, it said.

“The problem is not the lack of an immutable ledger, but weak procurement oversight, auditing, budget oversight, and whistleblower protection,” he said, adding that “technology cannot replace organizational integrity.”

It could also “prevent legitimate amendments and reinterpretations,” Geronimo added, noting that the public “must be able to examine, question, and revise what the government declares as fact.”

Taking this issue seriously, the Philippine Fintech Bar Association, which attended the aforementioned Senate hearing, expressed concern about the risks when private companies manage blockchain infrastructure.

“The government should retain ownership and control of all budget data, and private contractors should act solely as technical service providers,” the group said. decryption.

They also called for open source protocols and data portability requirements to “prevent vendor lock-in” and “the emergence of proprietary arrangements” that could lead to “the de facto privatization of public information systems.”

The full statement was provided by decryption.