By David Cagahastian, Jovee Marie dela Cruz & Butch Fernandez
LIKE in previous administrations, President Duterte’s P3.35-trillion “budget for real change” for 2017 focuses on social and economic services. In his budget message, Mr. Duterte said his first budget was designed “to realize change” in the government.
“We have designed fiscal rules that will benefit the people. We will reduce our people’s tax burdens through an equitable tax regime,” Mr. Duterte has said. “We will spend more on infrastructure and social services. We will streamline government operations and make delivery more efficient.”
“We owe it to our people to give them the best value for every peso we collect and spend,” the Commander in Chief added.
President Duterte added: “The government’s finances are in a much better shape: In fact, it is now among the world’s most credible debtors after earning investment-grade credit ratings.”
But while not crediting that attractiveness to the previous administration, Mr. Duterte took a swipe at the fiscal stance of the Aquino administration.
“However, because of underspending, we have deprived our citizens with much-needed services,” Mr. Duterte said. “Their taxes have, likewise, bloated through time due to outdated tax rates.”
Breakdown
OF the total P3.35 trillion in proposed spending next year, 40.14 percent, or P1.34 trillion, will be for empowering human resources through education, health care, social welfare and other social services.
The 27.6 percent (P923 billion) for economic services is for fixing broken infrastructure network, boosting the agriculture and rural sector, and generate more jobs and livelihood.
For general public services and defense, the government will allocate 22 percent (P729 billion) of its total budget.
The 2017 budget is higher by 11.6 percent than the current year’s budget of P3.002 trillion. As a percentage of GDP, the 2017 budget represents 20.4 percent compared to this year’s 20.1 percent of GDP, according to the Department of Budget and Management.
The total revenue next year is expected to reach P2.48 trillion, or around 10 percent more than the government’s target to collect this year. It is equivalent to 15.6 percent of the GDP.
The national government budget deficit next year is expected at 3 percent of GDP, or P478.1 billion. This funding shortfall is funded through borrowings. The total borrowings in 2017 will reach P631.3 billion.
Education
THE President said the government’s budget will invest more on its greatest resources—its people.
For education, the budget for next year will reach P699.95 billion, or 20.9 percent of the total budget. In particular, the budget of the Department of Education (DepEd) will increase by 31 percent to P570.4 billion to sustain the K to 12 education program.
The money is also seen to go to construction of nearly 37,500 classrooms of kindergarten up to Grade 12 students. Construction of classrooms for senior high-school students is also included in the budget.
Likewise, the funds are expected to go to the hiring of 53,831 additional teachers and provide assistance to 2.7 billion students in private schools.
About P2.8 billion of the total DepEd budget is expected to go to the estimated allocation for new teachers from the Miscellaneous Personnel Benefits Fund.
The Technical Education and Skills Development Authority will have P6.9 billion next year to support 293,333 enrollees to its Training-for-Work Scholarship Program, among others. The Commission on Higher Education will also have P13.5 billion to expand the reach of its student financial-assistance programs, as well as to heighten its K to 12 transition program.
State universities and colleges will have a total of P58.8 billion next year in state subsidies, from P47.9 billion in 2016.
Health
PUBLIC health is proposed to have a war chest of P151.5 billion.
The Department of Health will get P94 billion for the continuation of its universal health-care program.
This allocation will, among others, be used to deploy more doctors and health workers to rural areas, and enhance health facilities, such as local hospitals and drug-abuse rehabilitation centers.
The 2017 budget also supports the implementation of the Responsible Parenthood and Reproductive Health Law through an allocation of P4.3 billion next year.
The Philippine Health Insurance Corp. (PhilHealth) will be given P50.2 billion to sustain the health-insurance coverage of about 15.4 million indigent families and 5.4 million senior citizens.
Social support
THE Department of Social Welfare and Development (DSWD) will receive P129.9 billion.
This amount includes P78.7 billion for the Conditional Cash Transfer (CCT) for 4.62 million beneficiary-families. It also includes the P23.4-billion rice allowance for 3 million beneficiary-families.
To support livelihood and employment programs, the Department of Labor and Employment will have an allocation of P13.5 billion.
One of the pressing social problems of the country is affordable housing for the poor. For 2017, the National Housing Authority will receive P12.6 billion for socialized housing, particularly the resettlement of informal settlers from danger zones and housing assistance for calamity victims.
The Department of Transportation will be given P7.3 billion for the resettlement of informal-settler families to be affected by the North-South Railway project.
Utilities
TO help bring progress to the countryside, the 2017 budget provides P5.6 billion for electrification.
The National Electrification Administration is provided P1.8 billion for the electrification of 2,410 sitios and 72,300 households. The National Power Corp., meanwhile, will receive P2.8 billion for the construction of transmission lines and substations and the repair and maintenance of generating assets in the off-grind areas.
The DOE, on the other hand, will use P1 billion for the electrification of 190,600 households in off-grid and on-grid areas.
Infrastructure
BUDGET Secretary Benjamin E. Diokno said the 2017 budget also focuses on programs and projects to achieve the country’s 10-point socioeconomic development agenda.
Diokno added that the Philippine economy is “deficient in all types of infrastructure.”
He said the Duterte administration is committed to hike infrastructure spending from a low 5 percent to a high 6 percent to 7 percent of GDP next year.
He added that the total proposed budget for infrastructure is P860.7 billion, or 13.8 percent higher than this year’s budget.
“We have proposed that P355.7 billion for infrastructure be spent for fixing and building road networks, railways, seaport and airport systems,” Diokno said. “The infrastructure outlays in 2017 is equivalent to 5.4 percent of the GDP. This would eventually make the Philippines on a par with its Asean neighbors by the end of this administration.”
He also said the government has given the Mindanao Logistics Infrastructure Network P31.5 billion, which is higher than this year’s allocation of P19 billion, as part of the Duterte administration’s promise to pay equal attention to connecting lagging regions with growth centers.
Anticrime
TO support the administration’s drive against crime, illegal drugs and terrorism, Diokno said the budgets for the Philippine National Police (PNP) and the Armed Forces of the Philippines (AFP) were increased substantially.
“The PNP will receive P110.4 billion, higher by 24.6 percent than in 2016, to hire more policemen, acquire more guns and patrol vehicles, and finance other activities for more effective crime suppression,” he said.
Diokno added that the AFP will receive P130.6 billion, which is 15 percent higher than what it was allocated last year, to intensify its counterterrorism efforts and to protect our borders. The revised AFP modernization program will have P25 billion to give soldiers more weapons and equipment, he said.
According to Diokno, the administration will increase the salaries of the military and police officers by pursuing a law that increases the base pay of uniformed personnel, but reforms the pension system of retirees, as well.
To declog the courts by creating more Halls of Justice and implementing the Enterprise Information System, P32.5 billion will be set aside for the Judiciary, which is higher by 21.5 percent than in 2016, he said.
The allocation of the DOJ will also increase by 16.1 percent to nearly P16 billion. This budget will boost the DOJ’s ability to prosecute cases, sustain the Public Attorney’s Office’s free legal assistance to poor defendants, and improve the National Bureau of Investigation’s (NBI) efforts to investigate crimes. This allocation should the streamlining of the processing of the NBI clearances.
Agriculture, tourism
THE proposed budget for the agriculture and agrarian-reform sector is P120.5 billion. The amount would include the Department of Agriculture’s (DA) allocation of P45.3 billion to boost the production and marketing of crops, fisheries and livestock.
Part of the DA’s budget is for speeding up the construction of farm-to-market roads, postharvest facilities and other infrastructure projects.
The government also hiked the funding for the National Irrigation Authority to P36.4 billion to build and rehabilitate irrigation systems nationwide, and to subsidize the user’s fees that used to be charged to poor farmers.
Mr. Duterte has said that through the years, billions have been poured into agriculture, and yet the farmers and fishermen remain dirt-poor.
“I ordered the DA and the Department of Agrarian Reform to do their work differently,” the President said. The DA, he added, will build an updated National Soil Sample Data after four decades.
“The least we can do for our farmers is to guide them where, when and how to plant their crops so they can get the most income out of their toil and sweat.”
Meanwhile, tourism will have a total of P4 billion next year to create more jobs and livelihood opportunities from the country’s pristine destinations and cultural feature.
“The amount is apart from the P20.1 billion earmarked for tourism infrastructure development—airports, seaports and access roads—that will make it easier for tourists to travel around the country,” the President said.
Palace defense
MALACAÑANG has defended the bigger budget of the Office of the President for 2017, which was proposed by the DBM to be 500 percent more than its budget for this year.
At the budget hearing at the House of Representatives on Tuesday, Executive Secretary Salvador C. Medialdea said a bulk of the P19.99-billion budget for the Office of the President will be allocated for the Philippines’s hosting of the Leaders’ Summit and related meetings of the Association of Southeast Asian Nations (Asean) as its chairman in 2017.
A total of P15.46 billion will be spent for the Philippines’s hosting of the Asean Summit, which the government hopes to translate into more tourist arrivals next year, to be able to recoup expenses.
However, the DBM had also proposed an increase in the intelligence funds and contingency funds lumped into the budget of the Office of the President for 2017.
War against drugs
Diokno said the increase in the intelligence funds will be used by President Duterte in the war against drugs.
Mr. Duterte himself, in his speeches this past week, had been complaining about the small budget given for his office with which he has to do despite high costs of waging his war against illegal drugs.
“They know, and I know, and you know, that I came into office midstream. The budget is already done, and the budget on which we are working on now is a budget which was prepared the previous year by the Aquino administration,” Mr. Duterte said in a speech in Malacañang earlier this week. “At that time, they did not see the danger about drugs, because nobody, until I became President, made the naked truth come out—that we are really a drug country.”
DBM defended
DIOKNO also defended the budget-preparation process of the DBM, wherein it was admitted that members of Congress were able to recommend for funding their pet projects in their districts.
According to government-spending watchdog Social Watch Philippines, which continues with its advocacy for fiscal prudence despite its former chief convenor having already appointed to a position in the Duterte administration, there are still vestiges of a “pork barrel” system in the 2017 national budget proposed by DBM.
“We hope this government will abide by its promised change and veer away from the irregular practice of inserting projects that will render the agency hostage to the whims of the legislators,” Marivic Raquiza, coconvenor of Social Watch Philippines, said in a statement.
Raquiza cited an observation from Sen. Panfilo M. Lacson, who is known to have shunned receiving any pork-barrel funds, that allowing members of Congress to identify projects for funding smacks of conflict of interest.
“How can the legislators examine the budget submitted by the Executive when their ‘pet’ projects are embedded in these proposals?” Raquiza said. “While House representatives will understandably be concerned about the impact of the national budget on their local constituents, Congress’s power of the purse is focused on the big picture, and the need for legislators to scrutinize and amend the national budget as a whole to ensure that it will serve as a genuine equalizer to address poverty, hunger and joblessness, and promote regional, as well as national, development.”
Postenactment intervention
HOWEVER, Diokno said that, what is prohibited by the Supreme Court in its landmark decision which declared the “pork barrel” scheme as unconstitutional is the postenactment intervention by lawmakers, wherein they are given the power to influence where the money will be spent despite that particular project not being identified in advance in the budget-making process.
He said the practice of allowing members of Congress to participate in pointing out which projects are needed during the budget-deliberation process is not prohibited, and that members of Congress are more knowledgeable of the needs of their constituents and the projects required to attend to those needs.
Approval
NATIONAL Unity Party Rep. Karlo Alexi Nograles of Davao City said his committee would be ready to submit the budget for plenary debates by September 19. Nograles said they expect the budget to hurdle third reading by September 30.
Senators, on the other hand, remain confident the Senate is on track to pass the P3.35-trillion 2016 budget bill, the first big spending measure Congress would approve for the Duterte administration, before lawmakers adjourn for Christmas recess in December.
“I’m sure [it would be] passed on time,” Senate Majority Leader Vicente C. Sotto III told the BusinessMirror, as he noted that the Senate Finance Committee has already started marathon hearings to review the budget proposals submitted by the different Executive departments.
Sen. Loren B. Legarda, Finance Committee chairman, began convening last week consecutive budget hearings, attended by Cabinet officials and department heads, called to justify the funding proposals for their departments.
Legarda is expected to submit a committee report endorsing the 2017 budget bill for plenary deliberations and amendments by next month before a plenary vote can be taken to approve the budget bill on third reading before the yearend recess.
Image credits: AP/Bullit Marquez