2006 Proposed Budget — P1.053-Trillion

I’m writing to you from the great sands of Pagudpod, Ilocos Norte where internet price is pain-in-the-ass. It’s a wapping P60.00/hour !!! . Obviously it’s a peso per minute. So i guess i’ll visit your sites, my dear friends, when i am already home. For the mean time, as we were having fun in here, ponder on the latest bit of news i’ve seen.


The House of Representatives Thursday morning approved on second reading the country’s first trillion-peso General Appropriations Act (GAA) that Speaker Jose de Venecia said would pump-prime the economy in 2006 and resume infrastructure development necessary to sustain recovery.

The viva voce vote was taken at 5 a.m., at the end of a grueling session. The proposed budget will go into third-reading approval by the House by the first week of April.

De Venecia, who was in the plenary hall throughout the deliberations, expressed confidence the Senate Finance Committee headed by Sen. Manuel Villar “will be able to act rapidly and judiciously on the budget and have it approved sooner than expected.”

De Venecia said this is the first budget in the country in years that has a solid financial backing as a result of increased government revenues raised from the two revenue measures enacted last year—the Expanded Value Added Tax and the so-called sin taxes. He also noted the increased tax collection efforts by the Bureau of Internal Revenue and the Bureau of Customs.

“With this trillion-pesos budget, we could pump prime the economy and create significant growth to help strengthen our war on poverty, so that we can lift Filipinos from poverty and start building a modern Filipino middle class,” de Venecia said.

He said the government could assign priority to the building of the country’s infrastructure and public works, school buildings, irrigation systems, farm-to-market roads, and to the improvement of education and agriculture and fisheries in the countryside.

De Venecia said further the government could take a significant step in boosting the capacity of the Armed Forces of the Philippines and the Philippine National Police.

The Speaker gave credit to the former chairman of the Appropriations Committee, now Budget Secretary Rolando Andaya Jr, and his successor, Rep. Joey Salceda for steering approval of the budget.

He also lauded the efforts of Deputy Speaker Gerry Salapuddin, who presided for most of the marathon session, and of Deputy Speakers Raul del Mar and Emilio Espinosa, and Majority Leader Prospero Nograles and Minority Leader Francis Escudero.

De Venecia said the delay in the budget approval was mainly due to the impeachment case filed last year against President Arroyo, pushing back approval by at least three months.

Under normal circumstances, the budget should be approved by both houses of Congress in December and signed into law by the President after Christmas, the Speaker said.

President Gloria Macapagal Arroyo, in her budget message to Congress, said the proposed GAA which, for the first time in history, breached the trillion mark, is her government’s “priority blueprint and commitment to ensure sustained socio-economic growth and push reforms.”

The budget process saw a vital rigodon of the country’s economic managers: then Budget Secretary Romulo Neri went back to his previous post as Director-General of the National Economic and Development Authority (NEDA), while House Appropriations committee chairman Andaya of Camarines Sur was appointed Budget Secretary at the start of the House plenary debates on the national outlay.

Andaya, who steered the proposed budget through the rigorous committee hearings, took the honor in leading the plenary sponsorship of the budget before formally relinquishing his chairmanship to then chairman of the House Committee on Economic Affairs, Rep. Salceda of Albay.

Salceda, an acknowledged economic expert in the House and also a senior vice chairman of the appropriations panel, then took the flag and led the panel of sponsors in defending the GAA with candor, patience and authority.

The other senior members who took the cudgels in the plenary defense of the budgets of the different government departments, constitutional offices and agencies included Reps. Catalino Figueroa, Antonino Roman, Abraham Mitra, Consuelo Dy, Reylina Nicolas, Wilhelmino Sy-Alvarado, Nanette Castelo Daza, Bienvenido Abante, Jack Duavit, Teodoro Locsin, Jr., Victoria Reyes, Benjamin Abalos, Jr., Luis Villafuerte, Roger Mercado, Jesli Lapus, Mikey Macapagal Arroyo, Rene Velarde, Mary Ann Susano, Federico Sandoval II, Junie Cua, Harlin Abayon, Ma. Amelita Villarosa, Josefina Joson, Rodolfo Bacani, Eric Singson, and Mark Cojuangco.

The proposed outlay was submitted to Congress last August 24, 2005, well within the 30-day constitutional mandate for submission from the date of the President’s State-of-the-Nation Address (SONA) in July.

“I hope that Congress will see the proposed Budget as the Executive Branch envisions it to be – a potent weapon for the permanent upliftment of the large mass of our people from poverty; ” said President Arroyo in her budget message to the lawmakers.

De Venecia noted vital points underlined by the President as challenges the nation must pursue — the fight against graft and corruption; improving tax collection; executing a tight spending/austerity program; effecting power sector reforms; modernizing government procurement; and rationalizing the bureaucracy, among others.

The capital outlay in the proposed GAA has been increased from P64-Billion to P97.8-Billion and augurs well for infrastructure development to reinforce the government’s fight to reduce poverty.

The Arroyo leadership, according to her economic managers, is investing heavily on job creation, education, health care, power and electrification, roads and transportation infrastructure this year.

The GAA for 2006, they added, supports the President’s 10-point agenda laid out in the Medium-Term Philippine Development Plan (MTPDP).

Under the new programs, P13.1-billion has been earmarked for the Compensation Adjustment Fund to cover the P1,000 additional allowance for the national government’s workforce. retroactive to January this year.

An amount of P4.8-billion has been set aside for unpaid premiums to the Government Services Insurance System and other GFIs to improve the services and benefits extended by these entities to the civil servants.

De Venecia, Salceda and Andaya underscored intensified revenue collection and expenditure management efforts such as Tax Administration Computerization Project and similar programs of the Bureau of Internal Revenue.

They identified the others as the integrated computerization program of the Bureau of Customs, the Rationalization Program of the Government, and the Electronic Budget System of the DBM.

The Department of Education gets the lion’s share of the proposed outlay with


which is P7.1-B over its current budget share.

The increase will be used partly for the construction of 7,000 classrooms in areas experiencing acute shortage and the purchase of 18.1 million pairs of English textbook and manual amounting to P1.18-B.

The Department of Public Works and Highways received the second largest allocation at P62.3 billion, followed by National Defense (P46.6-B) Interior and Local government (P45.6 B) Agriculture including AFMA-DA (P15.6 B), Land Reform including ARF (P15-B), and Transportation and Communications (P14.3 B).

The Department of Health is earmarked P10.6 B, Judiciary P8.5 billion, Finance P6.9 billion, Environment and Natural Resources P6.3 billion and Foreign Affairs P5.3 billion.

The proposed budget is consistent to a deficit target of P124.9 billion or 2.1 percent of Gross Domestic Product (GDP), which is lower than last year’s deficit of P180 billion or 3.4 percent of GDP and P187 billion or 3.9 percent of GDP in 2004.

Debt service in proposed national budget cornered P340 billion or one-third of the P1.053 Trillion outlay, he said.

On the other hand the P340 billion budget for interest payments, as originally estimated when the budget bill was proposed by the President, was P38.3 billion bigger than the P301.7 billion authorized for the same purpose in last year’s GAA.

Chairman Salceda, however, made a happy revelation some two weeks ago that savings on debt servicing could significantly be attained proportionately with the strengthening of the peso in recent weeks.

Broken down by expense class, the other “big ticket” items are “personal services” or payroll for the 1.1 million national government employees amounting to P330.5 billion, up by P42 billion from the current level.

Local governments’ share from national taxes will climb to P166.5 billion, from this year’s P151.6 billion. The IRA (Internal Revenue Allotment) makes up 15 percent of the 2006 budget measure, the same percentage as this year’s.

‘But I am happy to note that the 2006 budget bill contains the biggest jump in infrastructure spending in a decade. From P64.5 billion this year, the public works budget is pegged at P97.8 billion next year,” Andaya said.

The reason for the growth is the earmarking of a portion of the projected revenues from the E-VAT law, he added.



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