MANILA, August 14, 2005
 (STAR) By Pia Lee-Brago - Any increase in the salaries of government workers will depend entirely on the passage of the proposed P1.09-trillion national budget for 2006 by Congress, Budget Secretary Romulo Neri said yesterday.

During an interview with Vice President Noli De Castro in his weekly radio program "Para Sa’yo… Bayan," Neri said government employees have been left behind by their counterparts in the private sector in terms of salary upgrading which was approved this year by the regional wage boards.

Even as moves to amend the Constitution and impeachment proceedings against President Arroyo are being worked out in Congress, Neri said lawmakers should still have enough time to approve the General Appropriations Act (GAA) of 2006 which will be submitted by Malacañang to Congress by Aug. 25.

Neri added that a proposed six- to eight-percent increase in the pay of government workers is included in the suggested budget allocation for next year.

But he said the raise would only be implemented if the 2006 national budget were approved, rather than simply reenacting the current 2005 budget.

"Ang worry ay kung reenacted (budget) ay hindi makapagbibigay ng karagdagang six percent and possibly eight percent increase (My worry is on the possibility that this year’s budget might be simply reenacted, in which case the eight percent increase in the salary would not be realized).

"The government sector has been left behind by the private sector in terms of salary increases," Neri said.

While the proposed 2006 national budget is 13 percent higher than the P963-billion budget for the current year, National Economic and Development Authority (NEDA) Deputy Director General Margarito Songco said the 2006 appropriation is actually a very "lean" budget.

Songco said the budget proposal was drafted by the Department of Budget and Management, Department of Finance (DOF) and the NEDA, which formed the Development Board Coordinating Council headed by Neri. The board, through Neri, recommended the P1.09-trillion appropriation after a thorough review of the proposed budget submitted by all government agencies, Songco said.

"We also considered the revenue that will be collected by the BIR, BOC and from the EVAT. This is a very lean budget that we will be undertaking for 2006," Songco said.

Under the proposed 2006 national budget, the biggest allocation, in the amount of P340 billion (31 percent), will automatically go to debt servicing of interest on the country’s outstanding loans.

Neri explained the need to reduce the budget deficit because of high interest rates imposed on the country’s debts.

Asked on the possibility of resorting to borrowing from creditors if the collected revenues fall short of the target, Neri said there is still a leeway since the target deficit under the proposed 2006 national budget is around P125 billion.

He said the amount could still be borrowed to pay for outstanding interest on the country’s debts.

Aside from calls on the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) to improve revenue collections, the government is pinning its hope on the lifting of a temporary restraining order on the implementation of the Expanded Value Added Tax (EVAT) imposed last month.

Neri said the projected collection of an additional P77-78 billion from the EVAT was considered when finalizing the budget proposal of P1.09 trillion.

"Hopefully the SC decision on EVAT is positive. Around P78 billion is the estimated additional income tax collection from EVAT. (We included in the) 2006 budget ang EVAT impact na P77 to 78 billion for next year," he said.

Neri said the Department of Education (DepEd) will be getting the biggest share with a proposed allocation of P120 billion for next year.

The bulk of the DepEd’s budget, or 90 percent, will go to pay P105 billion in teachers’ salaries.

Other items in the DepEd budget include P2 billion for construction and rehabilitation of school buildings, P1.8 billion for English and Science books and P1 billion for the purchase of additional desks.

Due to the high malnutrition rate among children in the most malnourished districts, the DepEd has also allocated P2 billion for its new program to feed schoolchildren.

"We will try to feed 1 million schoolchildren in the most malnourished districts (with an) additional P1.5 billion (for) DepEd," he said.

The Department of Public Works and Highways (DPWH) received the second largest share of the proposed 2006 allocation with a budget of P60 billion.

The Department of National Defense (DND) was third with a proposed budget of P46 billion. Neri said that the bulk of the DND’s budget goes to payment of pension of retired military personnel amounting to P29 billion.

Reported by: Sol Jose Vanzi

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