P-Noy signs into law P1.645-trillion budget, vetoes 13 items

MANILA, Philippines - President Aquino signed into law yesterday the P1.645-trillion general appropriations act for next year, the first time in 11 years that a budget program was signed on time or before yearend.

“The punctual passage of this budget allows us to hit the ground running in implementing our electoral campaign promise to uplift the lives of Filipinos through honest and competent governance,” Aquino said in a speech after signing the program which laid out in detail the government’s judicious spending for the coming year.

“The early passage of our Reform Budget for 2011, in and of itself, is a key step towards transforming the way we manage our nation’s resources,” Aquino said. With him during the signing were Budget Secretary Florencio Abad and several Congress leaders.

“There was no appropriation item that was vetoed by the President. The veto, which numbered 13, involved general and special provisions of the budget and then 26 items in the budget were subject to what is called conditional implementation, which is really a clarification on how they should be implemented,” Abad said.

“As we move into the arena of budget execution, we gain confidence and political adrenalin from the joint support and goodwill extended by Congress to the reforms we have proposed,” he added.

At the same time, he thanked lawmakers for supporting his Reform Budget “that enshrines transparency and accountability, and that establishes a spending program that is unabashedly biased for the poor.” 

Congress leaders present were Senate President Juan Ponce Enrile, Senate Finance committee chairman Franklin Drilon, Senate Minority Leader Alan Peter Cayetano, Speaker Feliciano Belmonte Jr., Majority Leader Neptali Gonzales II, House accounts chairman Florencio Noel, among others.

Items that were subjected to direct veto were prior legislative authorization for borrowings in excess of the debt ceiling and legislative consultation during budget execution and project implementation, among others.

“Pegging or limiting the ability of the government to borrow at 55 percent, realistically speaking, is not possible,” Abad explained, noting that the present national obligation of the government, as a percentage of the gross domestic product, is already at 57 percent.

“Plus, of course, we want to maintain the flexibility of the government in its liability management program to take advantage of positive environment where you have a strong peso, weak dollar and low interest rates,” he added.

“So that we can shift the profile of our liabilities to more peso-denominated debt which insulates it from the volatility of the foreign exchange market,” the Budget chief stressed.

“We wanted to make sure that later on we will not have problems with the implementation of those provisions because of possible conflicting jurisdictions between the executive and legislature.

“Basically most of the vetoed items fell along that general category. The other items that were vetoed more or less fall into the category of, or in the exclusive domain of, the executive department,” he told Palace reporters.

He said the 2011 budget invests heavily in poverty reduction, with social services accounting for 34.1 percent share. The 16.8 percent increase in the sector’s share is the highest among sectors.

“This is a concrete, direct and substantial way of making the dividends of good governance benefit the poor,” he said.

He noted that allocations for conditional cash transfers, for quality basic education and for maternal and child health care have significantly increased in line with efforts to help the country meet Millennium Development Goals.

“We did involve civil society organizations in the process and we will continue to do so. And there will be even more extensive and intensive involvement of not just civil society organizations but business organizations, and the academe, in the budget,” Abad said.

Eastern Samar Rep. Ben Evardone said the early signing of the 2011 budget program would augur well for the economy.

“It will further bolster investor confidence in our country as it signals a more stable environment,” he said.

He said the Department of Budget and Management (DBM) should release funds based on the performance and “absorptive capacity” of agencies.

Civil society groups and non-government organizations should monitor expenditures to ensure “transparent budget utilization,” he said.

During the nine-year Arroyo administration, Congress either failed to approve a budget or passed it late.

It is also the first time in 10 years that lawmakers did not make so-called “congressional initiatives,” the euphemism for budgetary insertions that form part of the congressional pork barrel.

Veto power backed

Drilon, meanwhile, voiced his support for President Aquino’s vetoing of a provision in the budget program that would have allowed a congressional oversight committee to realign savings from the P21-billion conditional cash transfer (CCT) program.

“I support the veto. This is a House proposal which violated the Constitution as it limits PNoy’s (Aquino’s) power to realign items in the budget,” Drilon said.

“A similar proviso was also vetoed by (President Gloria Arroyo) as it limits our ability to borrow for projects or refinance our debt for lower interest,” Drilon said.

The House opposition led by former president and now Pampanga Rep. Gloria Macapagal-Arroyo had moved to block the passage of the P21-billion budget of the Department of Social Welfare and Development for the CCT program, citing the supposed lack of capability of the agency to implement a program of that magnitude.

When Congress passed the budget, the P21 billion was left intact but some provisions were included to serve as safeguards on the use of the funds.

The CCT program was a brainchild of the Arroyo administration. Through the program, the government provides cash incentives to poor families every month on the condition that parents send their children to school and have them vaccinated and undergo medical check-up regularly.

Drilon also lauded the decision of the President to veto the cap on the amount of debt that any government agency or government-owned and controlled corporation (GOCC) may incur in a year.

The provision, introduced by Sen. Joker Arroyo, placed a cap of 55 percent of Gross Domestic Product on the indebtedness of any national government agency or GOCC.

Drilon also defended Aquino’s veto of a provision requiring consultation on the release of lump sum appropriations in the GAA. He said such a provision would only delay the implementation of vital projects.

“This is the first bill signed into law by PNoy. For the first time in 11 years, the GAA will be effective on the first day of the year. It is the first time in over a decade that debt service, a source of congressional insertions, was not included in the budget, as it is by law, automatically appropriated,” Drilon said. – With Jess Diaz, Paolo Romero, Marvin Sy, Iris Gonzales

He said that it was also the first time that an appropriation for public-private partnership projects (P12.5 billion) was included in the budget.

“We hope to continue this cooperation between PNoy and Congress in 2011 for the sake of our people,” Drilon said. – With Jess Diaz, Paolo Romero, Marvin Sy, Iris Gonzales