2006 budget indispensable, says Gullas

Cebu Rep. Eduardo Gullas stressed the need for Congress to pass the proposed P1.04-trillion 2006 national budget, saying a re-enacted P907.6-billion 2005 appropriations measure would be "unresponsive and inadequate."

"Whether we finally approve the 2006 budget next month or in February, it is absolutely imperative that we pass it," Gullas said in a statement.

"There are new, crucially important spending provisions in the 2006 budget that are definitely necessary for us to avert a deep economic contraction amid high energy prices, which have had the effect of an indirect tax on businesses and households," he said.

"New government spending has to come in. The government has to pick up any slack in corporate and personal consumption spending due to costlier fuel and electricity, not to mention the expanded value-added tax," he added.

Public sector spending, according to Gullas, "has to prop up domestic demand in the face of weak exports and inflation dampening private consumption in a big way."

Among the "vital" items in the 2006 budget cited by Gullas are the following:

• P13.1 billion for the eight percent salary increase of government workers;

• P10 billion to cover the early retirement of 30,000 government employees, which would save the government P5.2 billion annually starting 2007;

• P119 billion in spending for education, including P1.8 billion for 18.1 million English paired textbooks; P2.7 billion for the hiring of 9,200 new teachers; P2 billion in tuition subsidy for 475,000 students forced to enroll in private high schools due to the lack of public schools; P2.9 billion for the construction of new classrooms; and P1.5 billion for nutrition programs meant for 2.5 million grade schoolers;

• P2.9 billion in health insurance subsidy for indigent families;

• P21 billion to cover cumulative cost overruns in major public infrastructure, including foreign-assisted projects; and

• 15 billion incremental Internal Revenue Allotment for local governments.

"Obviously, these and other essential items cannot be adequately funded by a re-enacted 2005 budget," Gullas said.

Last week, the government reported that high oil prices, weak global demand for electronics, and lethargic farm production slowed the country’s economic growth to 4.1 percent in the third quarter from 6.2 percent during the same period last year.

The economy, as measured by the Gross Domestic Product (GDP) — the value of goods produced and services rendered — grew 5.2 percent in the second quarter.

GDP growth for the three months to September was below private sector forecasts of 4.3 to 5.0 percent.

Economic Planning Secretary Augusto Santos said the latest figures meant it would be very unlikely that the government would achieve its 5.3-percent GDP growth target for 2005.