2014 P2.268-Trillion GAA gets House ok minus PDAF lump-sum

MANILA, (PNA) — After two weeks of marathon and, more often, intense plenary debates, the House of Representatives passed on second reading the proposed P2.268-trillion General Appropriations Act (GAA) contained in HB 2630 which provides for safeguards ensuring strict implementation of programs contained therein.

“The House has moved to abolish the age-old PDAF not only as a response to public outcry but as a first step towards arresting any possible abuse of the same, even as we continue to explore the best possible alternative means to still afford our people with the social services and other needs they require,” Speaker Feliciano Belmonte, Jr. declared before adjournment.

The Speaker took time to thank Chairman, Rep. Isidro T. Ungab, the Vice Chairmen and members of the sponsor-Committee on Appropriations, the Deputy Speakers who took turns at presiding over the intense plenary sessions, Majority Leader Neptali Gonzales II and his assistant majority leaders, as well as each member of the majority, the minority led by Minority Leader Ronaldo Zamora, and the party-list groups.

Belmonte admitted that that the last two weeks were grueling but necessary so that the legislature could carefully scrutinize each agency’s budget ensuring projected expenses are indeed necessary.

“I am grateful for the patience and full cooperation from the officers and representatives of all agencies of the Executive Department, the Constitutional Offices and other stakeholders for their valuable inputs during the entire budget process,” Belmonte said.

The Speaker and Chairman Ungab were one in declaring that the proposed 2014 General Appropriations Act adopt the theme “Paggugol ng Matuwid: Daan sa Kasaganaan.”

Promoting transparency and accountability in the crafting of the spending framework for 2014, the proposed GAA is now devoid of the lump-sum appropriations of P25.240-billion for the Priority Development Assistance Fund, including the P200-million PDAF for the Office of the Vice President.

As proposed by the House leadership when plenary debates began two weeks back, the funds (PDAF) were instead allocated to the various priority programs that would directly benefit the people and promote inclusive growth. For hard or infrastructure projects, specific projects would have to be identified and included in the proposed GAA before its third reading passage in mid-October.

Significantly, the safeguards to ensure strict program implementation in the proposed GAA include: (1) Strictly no downloads to NGOs; (2) Full disclosure; (3) No downloading of projects outside of the Congressional Districts; (4) Strict adherence to the Procurement Law and the use of the PHILGEPS and its facilities in all procurement activities;

(5) Third party monitoring on the implementation of the programs and projects; and (6) the DBM and the respective heads of the implementing agencies and their administrators shall be responsible for ensuring that the following information, as may be applicable, are posted in their respective website: (i) Name, location and cost of projects; (ii) All releases and realignments; (iii) Status of implementation; and (iv) Project evaluation and/or assessment reports.

As a constitutional mandate, the Department of Education gets the lion’s share with P336.9 billion. “The amount closes the critical gaps in the supply of teachers, classrooms and for the increased needs brought about by the K-12 basic education reform program,” Rep. Ungab pointed out in Committee Report No. 1 on HB 2630.

As the infrastructure arm of government, the Department of Public Works and Highways (DPWH) occupies the second spot with P213.5-billion to support its national roads and bridges targets, as well as support the growth of key sectors such as tourism.

Third and fourth are the Department of the Interior and Local Government (DILG) with P135.4-billion and the Department of National Defense (DND) getting P123.1-billion.

The Department of Health (DOH) is at fifth with P87.1 billion in pursuit of the Universal Health Care Program, particularly for preventive healthcare services and for health insurance coverage of poor families, among others.

Getting the 6th biggest funding is the Department of Agriculture (DA) with P80.7 billion to support productivity programs and improve the incomes of farmers and fisherfolk.

The Department of Social Welfare and Development follows with P79.0 billion designed to deliver meaningful social protection services, particularly the expanded Pantawid Pamilyang Pilipino (PPP) Program to cover the benefits of about 4.3 million indigent households.

The Department of Transportation and Communications (DOTC) gets P48.7 billion to support the construction of airports, seaports and railways needed to improve the competitiveness of industries.

The Department of Environment and Natural Resources (DENR) is allotted P23.9 billion, while the Department of Agrarian Reform (DAR) has P20.4 billion, among others.

The total obligation budget of P2.268-trillion is 13.1 percent or P202.1 billion higher than the 2013 level of P2.006-trillion. Total revenue projection is P2.018-trillion which translates to 15.1 percent of GDP and higher by 15.6 percent than the 2013 program of P1.746-trillion.

The House-endorsed GAA authorizes the utilization of P796.029-billion, which is deemed automatically appropriated as these were previously authorized under pertinent laws and therefore outside the purview of the proposed bill.

The measure, among others, authorizes the enactment of funds amounting to P1.612-trillion, consisting of P1.472-trillion of Programmed Appropriations and P140-billion in Un-programmed Appropriations as standby fund should revenue exceed targets or new loans be secured to support these proposed budgets.

The proposed spending measure assumes a GDP growth rate of 6.0 – 7.0 percent in 2013 and expects it to accelerate further to 6.5 – 7.5 percent in 2014.

The sponsors pointed out that the proposed budget is also formulated and consistent with the following macroeconomic assumptions: Gross National Income (GNI) of 5.9 – 6.9 percent in 2013 and 6.2 – 7.2 percent in 2014; inflation rate of 3.0 – 5.0 in 2014, same level as in 2013; 364-day T-bill rates of 2.0 – 4.0, and foreign exchange rate of 41.0 – 43.0 peso to one US dollar.

The 2014 budget has also been formulated based on the following fiscal programs: (a) Consolidated Public Sector deficit of P100.783 billion equivalent to 0.8 percent of GDP; (b) National government budget deficit of P266.2 billion or 2.0 percent of GDP, which is in line with the medium term fiscal program to achieve a fiscal deficit of 2.0 percent of GDP by 2013 up to 2016; and (c) Outstanding NG debt of P6.3-trillion by the end of 2014 or a debt to GDP ratio of 46.8 percent, compared to the P5.8-trillion by the end of 2013 or a debt to GDP ratio of 48.7 percent.

By sector, Social Services continues to get the largest share with P842.8-billion, followed by the Economic Services sector with P590.2-billion, then General Public Services sector with P364.5-billion, then debt burden comes next with P352.7 billion, and the Defense sector with P92.9-billion.

To finance the proposed budget, the national government should raise P2.018-trillion in revenues to support the expenditure blueprint for 2014. This is, the sponsors say, 15.6 percent or P272.2-billion higher than this year’s revenue target of P1.746-trillion.

Of the expected collection, the Bureau of Internal Revenue’s target is P1.456-trillion or 72.2 percent of the total revenue while the Bureau of Customs intends to collect P408-billion or 22.2 percent.

The balance of 7.6 percent of P153.6-billion is expected from other agencies, sourced from fees and charges, BOT income and privatization proceeds, among others.

The proposed revenue of P2.018-trillion supports about 88.3 percent of the total cash requirement of P2.284-trillion in 2014 while the balance of 11.7 percent is from borrowings.