Gov’t set to spend P5.268T in 365 days

Malacañang presented this week the government’s P5.268-trillion national budget proposal for 2023 to the House of Representatives, where all money measures originate.

The economic team of President Ferdinand Marcos Jr. explained to House leaders on Friday how the administration plans to raise P5,268,000,000,000 and spend it in 365 days in a manner that will stimulate the sluggish economy and rekindle people’s optimism.

Malacañang’s team discussed with a House group led by Speaker Martin Romualdez what Marcos called an Agenda for Prosperity anchored on “Economic Transformation Towards Inclusivity and Sustainability.”

Socioeconomic Planning Secretary Arsenio Balisacan gave an overview of the country’s economy and prospects for growth this year and over the medium term. Finance Secretary Benjamin Diokno discussed fiscal policies and how the budget will be funded.

Bangko Sentral ng Pilipinas Gov. Felipe Medalla presented developments in the monetary, financial and external sectors and the outlook for the rest of 2023. Budget Secretary Amenah Pangandaman detailed the expenditure program and the administration’s spending priorities.

Pangandaman said the agenda will push the Medium-Term Fiscal Framework designed to lower the deficit to 3 percent of GDP by 2028, achieve a debt-to-GDP ratio of less than 60 percent by 2025 and cut the poverty rate to single-digit or at least 9 percent by 2028.

Diokno said the envisioned economic transformation should strengthen the purchasing power of Filipinos, reduce their vulnerability and mitigate the scarring from the pandemic, enhance bureaucratic efficiency and provide support to local governments.

Where will the P5.268T pile go?

How will Malacañang and the Congress use the P5.268-trillion budget to achieve inclusivity and sustainability, meaning economic progress benefiting all sectors in a self-sustaining cycle?

The spending program aims to transform the country into an upper-middle-class economy and in the process achieve:

• 6.5-7.5 percent real gross domestic product growth in 2022, 6.5-8.0 percent real GDP growth annually between 2023 to 2028.

• 9 percent or single-digit poverty rate by 2028.

• 3 percent national government deficit-to-GDP ratio by 2028.

• Less than 60 percent national debt debt-to-GDP ratio by 2025.

• At least $4,256 income (GNI) per capita or attainment of upper middle-income status.

The program seeks to prepare the country against external shocks, such as the pandemic that caused the economy to contract by 9.5 percent in 2020; the Russia-Ukraine war that threatens food security; as well as typhoons, earthquakes and other natural calamities.

It allocates more funds to the Build-Build-Build program, maintains its funding at 5-6 percent of GDP and gives the Department of Transportation a 120.4-percent budget increase to push for rail systems.

The President gave the Department of Education its biggest budget and increased by 8.2 percent the funds for education assistance and subsidies, doubled to P54.9 billion.

He allocated P26.2 billion for the Department of Labor and Employment, P15.2 billion for the Department of Migrant Workers and increased the program’s budget from P107.7 billion to P115.6 billion. Overseas Filipino workers sent home $31.4 billion in 2021. Remittances improved by 2.3 percent to $8.65 billion in the first quarter this year.

Marcos firms up DA role

The budget is used to steer the economy back to high growth, reinvigorate job creation, reduce poverty, ensure food security, improve transportation, generate affordable and clean energy, upgrade health care and social services, make face-to-face education safe and promote bureaucratic efficiency.

Recognizing the strategic value of food security, the President headed the Department of Agriculture – until he tapped last week agriculture expert Domingo Panganiban to be DA secretary, and gave the department and its attached agencies P184.1 billion.

He raised the rice buffer stock from nine to 15 days, gave the National Food Authority P12 billion to procure 632 million metric tons of palay from local farmers and P670 million for buffer stocking of rice and corn seeds.

He doubled funding for rice production from P15.8 billion to P30.5 billion, with P19.5 billion going to expanded fertilizer support. The Rice Competitiveness Enhancement Fund was given P10 billion to improve rice yields through farm mechanization, rice seed development and credit assistance.

Extension services funds were boosted for corn, P5.2 billion; livestock, P5.2 billion; fisheries, P5.5 billion; high-value crops, P2 billion; dairy industry development, P296 million; the Philippine Coconut Authority, P820 million and the Agriculture and Fisheries Modernization Program, P5.9 billion.

He allocated for farm-to-market roads, P13.1 billion; farm-to-sugar mills roads, P500 million; NIA irrigation services, P29.5 billion; for the Philippine Fisheries Development Authority to build fish ports in Navotas, General Santos and Camaligan, P5.1 billion; for two cold examination facilities in agriculture, P1 billion.

For research and development, the Agricultural Competitiveness Enhancement Fund was given P1.7 billion; for credit to individual farmers and fisherfolk, micro and small-scale enterprises, R&D grants, etc., the National Agriculture, Aquatic and Natural Resources sector’s R&D by the DOST, P1.4 billion.

More funds were included in the budget for the Agricultural Credit Policy Council (for credit to farmers and fisherfolk), P2.8 billion; Crop Insurance Program, P4.5 billion (to support 2.2 million farmers and fisherfolk on the Registry System for Basic Sectors in Agriculture); for production and livelihood interventions, marketing assistance, P1.8 billion.

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NB: Author is on Twitter as @FDPascual. Email: [email protected]. All Postscripts are also archived at ManilaMail.com