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WE have
a budget. The House and Senate ratified Monday the
bicameral conference report on the 2008 National
Government Budget that places high priority on sustained
support for social services and infrastructure
development and the country’s commitment to the United
Nations Millennium Development Goals.
Lakas
Rep. Edcel Lagman of Albay and Sen. Juan Ponce Enrile,
chairman of the House appropriations committee and of
Senate finance, respectively, signed the joint
conference committee report on House Bill 2454, the
general appropriations bill, that virtually maintained
the expenditure ceiling of P1.227 trillion proposed by
President Arroyo, but redirected some of the allocations
from debt service to necessary social services.
Lagman
said that for the first time in almost a decade, the
debt-service allocation for interest payments was cut,
paving the way for augmenting the appropriations for
health, education, agriculture, social welfare,
infrastructure, local governance and development,
justice and the judiciary, labor and employment,
energization, environment, and public safety and
security, among others. A big chunk of the cuts in
interest payments for foreign loans was to come from
P15.9-billion savings resulting from the recomputation
of the exchange-rate assumptions from the original
version, to integrate the impact of the appreciation of
the peso. The rate was recomputed at P41 to a dollar
from a high assumption of 48:1 in the National
Expenditures Program (NEP), or a P7 differential.
(Savings of P2.272 billion is generated for every peso
appreciation).
Another
P5-billion reduction resulted from the suspension of
interest payments for so-called “challenged” loans; and
another P5 billion, from removing premature allocations
for interest payments for program loans and bond
issuances still in the pipeline.
The
antidebt watchdog Freedom from Debt Coalition welcomed
the development, particularly on the special provision
suspending interest payments on “debts which are
challenged as fraudulent, wasteful and/or useless,”
describing this as a “critical and historical provision
that represents a major step forward in our fight
against illegitimate debt.”
The
question that arises is would revenues cover the entire
budget so that the President’s target of a balanced
budget as early as this year would be obtained?
Whatever
the answer, one of the most influential of the
President’s economic advisers, Vice Gov. Joey Salceda of
Albay, did not believe the administration should force
the issue in trying to balance the budget at least this
year when the global economy had slowed down, especially
in the Philippines’ largest trading partner, the United
States.
Salceda
said not trying for a balanced budget this year and even
in 2009 is not abandonment of the desirable target but
is a “preemptive strike” against the threat of a US
recession.
He had
recommended to Mrs. Arroyo on Friday that available
funds left from government expenditures this year should
instead be used to create a “protective shield” against
the ill effects of a US recession. His recommendation is
expected to be discussed at the Cabinet meeting on
Tuesday.
Salceda
added “policy authorities need to reassess the
timeliness of a balanced budget in 2008 as a socially
desirable national goal” in view of the “rising threats
of US recession and OECD slowdown,” spikes in global
commodity prices, and the 3.7-percent decline in real
family incomes from 2003-2006.
The
President and the Cabinet are expected to discuss
Salceda’s proposed “short-term one-shot economic
stimulus” in maintaining the country’s growth momentum
funded by a budgetary surplus, or a “policy mix”
combining P24 billion in individual income-tax reduction
and electricity tariff rebates and P51 billion in
increased spending, for a total of P75 billion.
Salcedo
conceded that while his proposed “policy rebalancing is
carefully designed and skillfully targeted as a
proportional response to evolving global conditions,”
there remains the “risk” of sending the “wrong signals”
to credit-rating agencies.
To avert
this, he recommended that the President maintain her
stand against lifting or reducing oil value-added tax.
“Thus, policy authorities need to immediately build a
unified domestic policy consensus and communicate it
clearly, especially to our constituents in the credit
markets.”
In any
case, Lagman said Congress, in the reconciled
appropriations bill, gave more flesh to President
Arroyo’s budget message of ‘Sustaining the Momentum of
Growth’ by increasing budgets for basic services and
infrastructure development to heed the demands of both
the masses and the investors.
“The
increases in education, health, agriculture, social
welfare and development, energization and environmental
protection address the government’s commitment of
attaining the MDGs principally on eradicating extreme
hunger and poverty, achieving universal primary
education, promoting gender equality, reducing infant
mortality, improving maternal health, combating HIV-AIDS
and tuberculosis, and ensuring environmental
sustainability,” said Lagman.
However,
the FDC scored the Bicameral Conference on the 2008
Budget for its lack of transparency for not releasing
details of the budget bill before it was presented for
ratification. “Does this indicate an intent to avoid
scrutiny of possible controversial pork-barrel
allocations before Congress passes the bill?”
Lagman
said that in addition to the P25.9-billion cut on
interest payments, proposed appropriations for
slow-moving projects, excess allocations, and other
miscellaneous allotments totalling P12.64 billion were
also slashed.
The
total cuts amounting to P38.5 billion were realigned to
the budgets of the government agencies and programs,
among others, to increase their respective
appropriations as originally proposed in the NEP. They
include basic and higher education, increased by P4.83
billion for a total new appropriations of P158.6
billion; Health service increased by P5.79 billion,
agriculture by P1.87 billion, infrastructure up by
P12.98 billion, justice and the judiciary by P1.24
billion, social welfare and development by P165 million,
local governance and development by P3.5 billion, public
safety and security by P0.86 billion, labor and
employment by P236 million, energization by P600
million, environmental protection by P184 million, and
sports development by P59 million. |
