Manila, July 22, 2003 By Des Ferriols (Star) The Arroyo administration will adjust the 2004 budget to factor in the proceeds of the $682-million Marcos money, the Department of Budget and Management (DBM) said yesterday.

Budget Secretary Emilia Boncodin said the 2004 budget would have to take into consideration the newly-recovered Marcos deposits now held in escrow by the Philippine National Bank (PNB), specifically for the Comprehensive Agrarian Reform Program (CARP).

According to Boncodin, the disbursement of the Marcos wealth would have to be covered by the General Appropriations Act (GAA) and this would require adjustments in the 2004 budget which allocated P6.7 billion for the Department of Agrarian Reform (DAR).

Boncodin explained that the Marcos wealth could not be used for other budgetary items except for CARP-related requirements, since the funds have already been earmarked for agrarian reform under the Comprehensive Agrarian Reform Law.

"It has to be clarified that the GAA alone cannot reallocate the Marcos wealth," Boncodin pointed out. "If there is a need to reallocate the funds, it would have to happen through an amendment of the CARL itself. It canít be through the GAA."

According to the DBM chief, however, the departmentís proposal was to allocate the Marcos funds for non-recurring budget items in the CARP budget, such as land acquisition.

"These funds are non-recurring so it is prudent to set them aside also for non-recurring items in the budget. It should not be allocated to recurring programs and projects because when it runs out, the programs would be left hanging," she pointed out.

Boncodin said the Marcos funds would also relieve the Land Bank of the Philippines (LandBank) which has been advancing the payment for agricultural lands acquired by the government under the CARP.

So far, Boncodin said Landbank has advanced a total of P3.7 billion for the CARPís land acquisition component, way above its covenant with the World Bank which limited the amount that the bank could advance to the government.

According to Boncodin, however, the Marcos deposits would free up at least P6.7 billion from the 2004 budget that would have been allocated for the DAR. These funds, she said, could be reallocated to other items in the budget.

"Indirectly, we would be able to pare down our deficit for 2004 although we still have to make sure that the measures we implemented to increase revenues and control our expenditures would still be in place when the money runs out," Boncodin stressed.

"Itís all about sustainability of efforts and consistency in policy," she added.

During the first semester of the year, the government managed to keep its deficit P22 billion below the programmed deficit although Boncodin said the DBM would start the gradual settlement of P11.8 billion of accounts payable in July.

Reported by: Sol Jose Vanzi

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