Senate starts work on P1.053-trillion 2006 budget

The Senate will start work on next year’s proposed P1.053-trillion national budget tomorrow with a briefing by the Development Budget and Coordinating Committee.

Sen. Manuel Villar Jr., Senate finance committee chairman, said the DBCC will be explaining to the Senate where the budget will be sourced from to justify its feasibility.

The proposed budget is the biggest yet, a huge jump from the P907.6 billion approved for 2005 and, according to Villar, the Executive branch will have to justify where the money is coming from.

He said implementation of the expanded value-added tax (EVAT) law would be key to approving the proposed budget.

Based on the EVAT law enacted by Congress early this year, expected tax revenues for 2006 would be more than P100 billion because of the removal of almost all exemptions previously enjoyed by various sectors.

The implementation of the law has been put on hold following several petitions before the Supreme Court questioning the constitutionality of certain of its provisions.

Although the impact of the delay in the implementation for this year will not be too significant, any delays for 2006 could derail all of the economic projections of the government, Villar said.

"If the VAT is implemented, the people will complain but the funds will be available," he said. "If the VAT is not implemented, there will be no complaints but there will be no funds as well."

The finance committee headed by Villar has decided to start its work on the budget, while waiting for the House of Representatives to transmit its report to the Senate.

Although the decision of the Senate finance committee would help facilitate deliberations on the budget, Villar expressed some degree of pessimism about its speedy passage.

He said the House has been slow in transmitting the budget to the Senate in the past, and this was partly to blame for a reenacted budget during the first few months of 2005.

Villar said if the House submits its version by December, it is certain that the government will be operating under a reenacted budget at the start of 2006. — Marvin Sy