Estrada to restore cuts in budget

President Estrada will restore "special provisions" in the national budget which lawmakers removed earlier due to a projected shortfall in revenues.

In signing the proposed P629-billion General Appropriations Act at Malacañang this morning, Mr. Estrada said there is "no constitutional basis" for Congress to omit such provisions.

Senate President Pro Tempore John Osmeña, chairman of the Senate committee on finance, had proposed to prune the original budget of P651 billion by as much as P60 billion because the government is expected to incur a budget deficit of more than P85 billion this year.

The cut will mostly affect the internal revenue allotments (IRAs) of local government units. However, local officials protested and threatened to stop their work late last year if such an amount is not restored.

Osmeña and the other lawmakers then went back to the drawing board to come up with a new formula that would keep the deficit at manageable levels.

They came up with a P20-billion cut, which Malacañang is agreeable to.

Last month, Budget Secretary Benjamin Diokno expressed optimism that the bicameral conference committee on finance would be able to finish its task.

In fact, a technical group of this committee had already identified the cuts in the budget which amounted to P30 billion, and none of which touched the IRAs of local government units.

Most of the cuts, however, involve development projects.

Osmeña expressed misgivings on the cuts, saying these are too deep and would seriously affect government projects.

"These cuts are not my proposals and I am not supporting them," said Osmeña.

Among the cuts that the technical group had proposed were some P11 billion in foreign-assisted projects.

These include road construction and flood control projects, whose funds come from the Overseas Economic Cooperation Fund (P2.13 billion); DENR projects on air quality, Southern Mindanao control and forestry (P878 million).

Medium-term development fund (P1.5 billion), Islam bridge project (P418 million), women's health and safe motherhood (P527 million), and agrarian reform infrastructure support (P508 million).

Agencies which have projects that are not foreign-assisted but whose budgets were proposed to be cut include the Department of Public Works and Highways (P4.26 billion), the Philippine National Police (P500 million), Pasig River rehabilitation (P2.7 billion).

There are also cuts in intelligence funds (P250 million), calamity and contingent funds (P2 billion), government corporations (P2 billion), national defense (P1 billion).

The Department of Agriculture, whose projects are supposed to lead the country's growth this decade, was not spared from the cut. Some P4 billion was removed from its budget, affecting irrigation system projects (P1.5 billion), farm-to-market roads (P1 billion), Casecnan transbasin (P1 billion), and the so-called agricultural "makamasa" for rice and corn (P500 billion).

The President is also expected to sign today the Retail Trade Act. --