2016 budget lump sums face scrutiny

MANILA, Philippines - The House committee on appropriations starts today its deliberations on the proposed P3.002-trillion national budget for 2016 even as anti-corruption watchdogs said they have detected at least P500 billion in lump sum funds that are prone to abuse in an election year.

The deliberations in the panel, chaired by Davao City Rep. Isidro Ungab, will start with a briefing by members of the Development Budget Coordinating Committee (DBCC), the inter-agency body that determines the overall economic targets, expenditure levels and budget of the government.

Speaker Feliciano Belmonte Jr. earlier said Congress would study the budget proposal well to ensure government programs and their funding are justified.

Based on sector, social services will have the biggest allocation of P1.1059 trillion, which is 36.8 percent of the proposed budget.

Economic services took the second largest with P829.6 billion or 27.64 percent of the proposed budget, with transport and communications infrastructure getting the bulk.

General public services will get P517.9
billion, debt burden P419.3 billion, and interest payment P392.8 billion.

Defense will get P129.1 billion to fund the Armed Forces modernization in light of the territorial disputes in the West Philippine Sea.

But former national treasurer Leonor Briones, lead convenor of Social Watch Philippines, said red flags were found in the proposed budget – including the P500 billion lump sums, special purpose funds, and un-programmed funds, which President Aquino can use at his discretion.

“Since this year and 2016, the budget will be a big influence in the elections – that’s been the practice,” Briones told dzBB.

“Of course if you’re the administration and you have a candidate, there’s always the preference for areas where your party is strong or where your candidate is based,” she said, adding regions identified with the opposition are expected to have less from the budget.

She warned the administration would embark on various projects, of which many will be “unsustainable” or discontinued after the elections.

Among the lump sum funds reported earlier were the P430.4-billion special purpose funds (SPF), which was increased by P61.7 billion for 2016; the P74.9 billion allocated for local governments (broken down as P56.5 billion for local government units and P18.4 billion for local government support fund); and P8.3 billion for Department of the Interior and Local Government (DILG) projects.

Free debates

Ungab encouraged his colleagues to actively participate in the deliberations, pointing out that free and full debates on the proposed budget will be allowed.

“We will focus first on the macro-economic assumptions and the general parameters the administration used in putting together the proposed national budget for next year. After that, we will go into the details – department by department, agency by agency. We hope to do that in the next two to three weeks,” he said.

He hopes the proposed spending program will be presented in plenary and approved on second reading by October.

Invited to today’s hearing were Budget Secretary Florencio Abad, Finance Secretary Cesar Purisima, Economic Planning Secretary Arsenio Balisacan, and Governor Amando Tetangco of the Bangko Sentral ng Pilipinas.

Aside from Purisima, expected to be on hand to answer questions on revenues are Internal Revenue Commissioner Kim Henares and Customs Commissioner Alberto Lina.

On Tuesday, the Philippine Charity Sweepstakes Office and Philippine Amusement and Gaming Corp. will defend their budgets. The Civil Service Commission, Commission on Human Rights and Commission on Audit will take their turn on Wednesday while the Department of Justice (DOJ) and the judiciary will defend their budgets on Thursday.

Leyte Rep. Ferdinand Martin Romualdez, leader of the independent bloc, said they will go over the proposal closely and also seek an accounting of disbursements of discretionary funds in the 2015 General Appropriations Act.

The President had always submitted his budget proposal a day after his State of the Nation Address (SONA) to give the House and the Senate enough time to approve the outlay before the end of the year.

In his SONA on July 27, Aquino said he had always avoided a reenacted budget, which would have given him a lot of discretion over appropriations. The proposed P3.002-trillion budget, titled, “Paggugol na Matuwid: Saligan sa Tuloy-tuloy na Pag-unlad,” is Aquino’s sixth and last spending proposal.

Abad said the 2016 budget “consolidates all the reforms started in 2010 and sets a firm foundation for the continuity of reforms beyond this administration.”

“The fiscal position for FY (fiscal year) 2016 will translate to an obligation budget ceiling of P3 trillion, up by P394 billion or 15.1 percent more than the FY 2015 budget of P2.606 trillion,” he said.

Of the P3-trillion outlay, he said 80 percent or P2.419 trillion would “be eaten up by the forward estimates or the cost of ongoing programs and projects.”

“This leaves funds available for expanded and new programs and projects of P580.9 billion, nearly one-fifth of the proposed budget ceiling. This additional fiscal space will be directed towards addressing critical funding gaps in various sectors,” he said.

He added that the government expects to collect revenues amounting to P2.697 trillion, 18.5 percent more than estimated total collections this year.

Abad pointed out that public spending would continue to aim to focus on good governance and anti-corruption, ensuing inclusive growth, sustaining the growth momentum, managing disaster risks, and forging just and lasting peace.

The proposed budget is 15.2 percent higher compared to the P2.606-trillion national budget for this year with the DBM saying the programs and projects supporting “rapid, inclusive, and sustainable” growth were given priority.

Government expenditures under the 2016 proposed budget are seen climbing to 19.5 percent of the country’s gross domestic product, higher than the 18.7 percent ratio estimated for this year.

The proposed budget also increased the fiscal space to P580.9 billion for new programs and projects, or double the P287.3 billion allocated this year.