P3.3-T ‘real change’ budget submitted

MANILA, Philippines - Programs for peace and order, better infrastructure and fighting corruption are among the priorities in the first national budget proposal of the Duterte administration.

The Department of Budget and Management (DBM) formally turned over to Congress yesterday the proposed P3.3-trillion “national budget for real change” for 2017.

“I would describe this budget as putting our money where our mouth is,” Budget Secretary Benjamin Diokno said in simple ceremonies at the House of Representatives, after submitting the budget proposal – dubbed Budget for Real Change – to Speaker Pantaleon Alvarez.

“Being the first budget proposal of the new administration, we expect the budget to focus on the primary objectives of the President as he clearly enunciated over the course of the campaign,” said Davao City Rep. Karlo Alexei Nograles, chairman of the House appropriations committee tasked to scrutinize the proposed budget program.

Budget hearings are expected to begin on Aug. 22.

The senior House official said priorities in the budget program are “peace and order, anti-drugs, anti-corruption, wider infrastructure, better transportation, focus on education, health and social protection, enhanced opportunities for Mindanao, the ARMM and Moro provinces.”

Included in the budget is P23.5 billion for the projects of the 294-man House, or at least P80 million for each congressman as part of the annual allocation for projects they will identify for implementation.

“There will be no hard and fast rule,” Diokno said, reassuring the public that Congress will definitely not defy the November 2013 Supreme Court (SC) decision against lump sum allocations, or post-enactment congressional insertions, which will now be made through line-item budgeting.

The DBM chief added the proposed budget is “transparent and compliant” to the two landmark decisions of the SC on the Priority Development Assistance Fund and the Disbursement Acceleration Program.

Diokno also said there is “no budget for Charter change” and that “Mindanao will have a fair share of the budget.”

“Everybody will be happy,” he said, adding “we will now consider unsolicited proposals subject to Swiss challenge.” 

The proposed budget is 11.6 percent higher than the 2016 budget and represents 21 percent of the projected 2017 gross domestic product (GDP).

Also at yesterday’s ceremonies were Deputy Speakers Raneo Abu, Fredenil Castro, Eric Singson, House Majority Leader Rodolfo Fariñas, House Minority Leader Danilo Suarez and Isabela Rep. Rodito Albano, among others.

Abu said the budget would enable the Duterte administration to fulfill its promises to the people, particularly stamping out criminality and boosting industries and infrastructure.

The 2017 national budget saw a substantial increase in the allocation for the Office of the President – now at P20 billion, from P2.8 billion this year.

Vice President Leni Robredo’s office got a lower allocation, however, from this year’s P503 million – half of which was shared with her predecessor Jejomar Binay who stepped down last June 30 – to P433 million next year.

The total of lump sum items under the Special Purpose Funds (SPF) reached P1.3 trillion, compared to the 2016 level of P1.28 trillion.

Under the SPF are the Budgetary Support to Government Corporations (P148 billion); Allocation to Local Government Units (P554 billion); National Disaster Risk Reduction and Management Fund (P37 billion); Contingent Fund (P5.5 billion from P2.5 billion in 2016); Miscellaneous Personnel and Benefits Fund (P96 billion); Pension and Gratuity Fund (P142 billion); Customs duties and taxes including tax expenditure (P19 billion) and Debt Interest Payments (P334 billion).

As usual, the Department of Education (DepEd) got the highest allocation with P570.4 billion.

The Philippine National Police received a budget of P110.4 billion, higher by 24.6 percent than this year’s figure.

The Armed Forces of the Philippines will receive P130.6 billion, which is 15 percent higher compared to this year’s allocation.  

Budget allocation for the conditional cash transfer program was raised to P78.7 billion after the Duterte administration added P23.4 billion as rice allowance for millions of beneficiary families. The rice allowance was a campaign promise of President Duterte.

The Department of Public Works and Highways got P458 billion, Department of the Interior and Local Government (P150 billion), Department of National Defense (P134 billion) and the Department of Social Welfare and Development, P129 billion.

Higher deficit

In his budget message, President Duterte said his administration has set a higher fiscal deficit for next year on account of higher public spending from a budget that he called “for the people and by the people.”

He said the budget gap for 2017 would reach P478.1 billion, equivalent to three percent of the gross domestic product. The GDP is the sum total of all goods and services produced within an economy in a given period.

“As the needs of our people increase, public spending must likewise expand to meet such demands,” Duterte said.

“Governance and development will be for naught if we do not take a human approach. I add: the budget is useless if the Filipino is not at its center,” he added.

The Chief Executive said focusing on the needs of Filipinos would make next year’s P3.35-trillion budget more than just a “collection of figures and provisions” but “an embodiment of our people’s clamor for real change and a compassionate government.”

Despite the spending hike, Duterte said the proposed expenditure ceiling and fiscal deficit target for the medium term are “reasonable and fiscally sound.”

“The new deficit target for next year to 2022 allows us to increase spending on infrastructure, rural development and social services,” the President said.

Duterte said the government can collect enough taxes because the economy is expected to continue growing.

He said the country’s GDP is seen at 6.5 percent to 7.5 percent next year because of the sustained growth of the services and industry sectors and the expected rebound of the agriculture sector.

“Our plan to pump-prime the economy through increased spending on infrastructure will push GDP growth to new heights next year and throughout our term,” the President said.

A higher fiscal deficit would put more pressure on the government to borrow money to fund its programs.

Duterte, however, said the debts to be incurred would “produce results.”

He said infrastructure spending would be increased to six to seven percent of GDP to build new roads, railways, classrooms and farm facilities.

“These added debts will not endanger our stable financial position. With strong growth, we will continue to outgrow our debt burden,” Duterte said. – With Alexis Romero