House starts plenary debates on proposed Php3.002-trillion 2016 national budget

By Sammy F. Martin

MANILA, Sept. 28 (PNA) — The House of Representatives on Monday started plenary debates as the General Appropriations Bill (GAB) for 2016 asking a national budget of Php3.002 trillion.

This after a long scrutiny of the budgets of the various government departments and agencies at the House committee on Appropriations on House Bill 6132 chaired by Davao City Rep. Isidro Ungab.

“I am confident that with our collective wisdom, we will also pass on time the national budget bill for 2016. The congressional power of the purse comes with the responsibility not only of ensuring that every public peso is spent within means, in the right priorities, and with measurable results particularly in fostering inclusive development but also of passing the budget bill on time—delaying the passage of the budget bill will mean delaying our country’s forward move towards the achievement of our national development goals,” Ungab said in his sponsorship speech.

He said the 15.2 percent increase, or Php396 billion more than the 2015 expenditure program, corresponded to 19.5 percent of the Gross Domestic Product (GDP), increasing from 18.7 percent of GDP in 2015.

Of the Php3.002 trillion obligation budget, the Appropriations committee chairman said the committee proposed Congress to authorize the amount of Php2.139 trillion, consisting of Php2.071 trillion in programmed new appropriations and Php 67.5 billion in unprogrammed appropriations, which may only be utilized if revenues exceed targets or new loans be secured.

He explained that the programmed new appropriations of Php2.071 trillion, together with the Php930.7 billion in automatic appropriations, which is outside the purview of this GAB, would provide for the appropriation cover for the Php3.002-trillion budget.

The veteran lawmaker said the proposed budget has been shaped by financial management reforms that included the two-tier budgeting approach, the GAA-as release document policy, the performance informed budgeting, the unified accounts code structure, and the bottoms-up budgeting process.

“As the proposed budget has been shaped by these reforms, we become more confident that it is not just a budget where we spell out the sources of funds and the plan for the disbursement of funds, but an investment plan for a better Philippines. We agree with the appreciation of President Aquino that the national budget is the government’s most potent instrument in achieving the country’s development goals. And from the point of view of a Representative of the people, I say with conviction that the national budget should be the clearest, the loudest, and the best expression of our people’s desire for development,” Ungab pointed out.

He stressed that the budget measure is anchored on the assumptions that economic growth will be 7 to 8 percent this year, in 2016 and over the medium term, inflation will be within 2 to 4 percent, and an exchange rate of Php43 to Php46 per dollar.

Ungab said it was also consistent with other macroeconomic assumptions such as a 364-day T-bill rate of 2 to 4 percent, exports growth at 6 percent, and imports growth at 12 percent according to him.

He also explained the budget proposal has been formulated based on fiscal program with total revenues of Php2.697 trillion in 2016, which translate to 17.5 percent of GDP and is higher by 18.5 percent from the 2015 revenue program of Php2.275 trillion; Consolidated public sector deficit of Php128.8 billion or 0.8 percent of GDP; National government budget deficit of Php308.7 billion or 2 percent of GDP, consistent with the medium term fiscal program; and Outstanding national government debt of Php6.423 trillion or a debt-to-GDP ratio of 41.8 percent by the end of 2016.

He said the GAB also effectively reduced the number of Special Purpose Funds (SPFs), from 10 in the 2015 GAA to 7 in the 2016 GAB.

The E-Government Fund and the International Commitments Fund were incorporated back to the budgets of the relevant departments, while the Rehabilitation and Reconstruction Program was integrated into the National Disaster Risk Reduction and Management Fund (NDRRMF).

Ungab also noted the amounts allocated for the Miscellaneous Personnel Benefits Fund and the Pension and Gratuity Fund were notably decreased, as funds for the creation of new or filling up of unfilled positions, as well as compulsory retirement, were integrated back into the respective departments’ budgets.

The NDRRMF, meanwhile, expanded significantly to enable the government to respond better to calamities and the needs of victims.

“The distribution of the 2016 Budget by sector reflects the government’s commitment to inclusive growth as more than Php64 in every Php100 will be spent on social and economic services in 2016 — this shows a dramatic improvement from Php45 in every Php100 in 2015,” Ungab emphasized.

The Social Services sector continues to get the largest share of the budget, at 36.8 percent of the national budget, or Php1.106 trillion. Economic Services will get the second largest share of the budget with 27.6 percent, or Php829.6 billion while General Public Services will receive 17.3 percent, or Php517.9 billion. The Debt Burden, which is composed of Interest Payments to service outstanding debts as well as Net Lending to government corporations, will reach an all-time low of 14 percent of the total budget, or Php419.3 billion. To boost the government’s capacity to defend national sovereignty, the Defense sector will get a share of 4.3 percent, or Php129.1 billion.

The Mindanao solon even cited that starting in the 2016 proposed national budget, the government adopted a new framework in classifying the budget called the Classification of Functions of Government (COFOG), which categorizes programs and projects of government agencies according to function to accurately reflect an agency’s contribution to the social and economic goals of the government.

Among the expense classes, Capital Outlays (CO) will receive the largest increase at 29.8 percent, or a budget of Php702.9 billion representing 23.4 percent of the total 2016 budget. Notable public infrastructure investments in 2016 include the construction and rehabilitation of classrooms, especially those needed for the roll-out of Senior High School under the K-12 Program; the completion of the national road network; the construction and rehabilitation of health facilities especially in rural areas; among others.

Unlike in previous years, the proposed budget for 2016 allocates the largest share of 36.3 percent for maintenance and other operating expenditures (MOOE), with Php1.094 trillion.

Personnel Services (PS) will get Php810.8 billion or 27 percent of the total expenditure program while Financial Expenses will receive 13.1 percent or Php394.4 billion.

As to the funding source for government operations and programs, Ungab said these included government revenues in the amount of Php2.697 trillion to be collected in 2016.

Of this, Php2.543 trillion, or 94.3 percent, will be sourced from tax revenues. The remainder will come from non-tax revenues at Php151.4 billion and privatization proceeds at Php2 billion; collections of the Bureau of the Treasury (BTr) at Php58.3 billion, fees and charges at Php40 billion; the sale of government assets at Php2 billion, and other non-tax revenues at Php53.2 billion; borrowings of Php674.8 billion in 2016, of which Php308.7 billion will be used to finance the projected fiscal deficit, Php347.7 billion to amortize maturing obligations, and Php18.4 billion for the national government’s cash buffer account.

Per the budget proposal submitted by President Aquino to Congress themed “Paggugol na Matuwid, Saligan ng Tuloy-Tuloy na Pag-unlad,” the Top 10 departments per allocation are: Department of Education (DepEd) Php435.9 billion; Department of Public Works and Highways (DPWH) Php394.5 billion; Department of National Defense (DND) Php172.7 billion; Department of Interior and Local Government (DILG) Php154.5 billion;

Department of Health Php128.4 billion; Department of Social Welfare and Development (DSWD) Php104.2 billion; Department of Agriculture (DA) Php93.4 billion; Department of Finance (DOF) Php55.3 billion; Department of Transportation and Communications (DOTC) Php49.3 billion; Department of Environment and Natural Resources (DENR) Php25.8 billion; and Department of Science and Technology (DOST) Php18.6 billion. (PNA)