HOUSE  OKs  P1-TRILLION  BUDGET

MANILA, March 24, 2006
 (BULLETIN) By BEN R. ROSARIO - Second-reading approval caps marathon session. De Venecia hopeful of Senate approval

The House of Representatives, after a grueling session that ended at dawn yesterday, approved on second reading the country’s first trillion-peso proposed General Appropriations Act (GAA) for 2006 which Speaker Jose de Venecia said would pump- prime the economy and sustain infrastructure development to support the country’s economic recovery.

The "viva voce" vote was taken at 5 a.m. at the end of a marathon session. The proposed budget will go into third reading and approval by the House by the first week of April.

De Venecia, who was in the plenary hall throughout the deliberations, expressed confidence the Senate Finance Committee headed by Sen. Manuel Villar "will be able to act rapidly and judiciously on the budget and have it approved sooner than expected."

De Venecia said this is the first budget in the country in years that has solid financial backing generated by two revenue measures that Congress enacted last year — the Expanded Value Added Tax (EVAT) and the "sin taxes" on tobacco and alcohol.

He also noted the increased tax collection efforts by the Bureau of Internal Revenue and the Bureau of Customs.

"With this trillion-peso budget, we could pump- prime the economy and create significant growth to help strengthen our war on poverty so that we can lift Filipinos from poverty and start building a modern Filipino middle class," De Venecia said.

He said with the huge budget, the government could prioritize the building of infrastructures such as schools, irrigation systems, farm-to-market roads, and to the improvement of education and agriculture and fisheries in the countryside.

De Venecia said further that with capital outlay, the government could take significant steps to boost the capacity of the Armed Forces of the Philippines and the Philippine National Police.

The Speaker gave credit to the former chairman of the Appropriations Committee, now Budget Secretary Rolando Andaya Jr., and his successor, Rep. Jose Salceda for steering approval of the budget.

He also lauded the efforts of Deputy Speaker Gerry Salapuddin, who presided for most of the marathon session, and of Deputy Speakers Raul del Mar and Emilio Espinosa, and Majority Leader Prospero Nograles and Minority Leader Francis Escudero.

De Venecia said the budget approval was delayed by at least three months mainly due to the impeachment case filed at the House last year against President Arroyo.

Under normal circumstances, the budget should have been approved by both houses of Congress in December and signed into law by the President after Christmas, the Speaker said.

President Arroyo, in her budget message to Congress, said the proposed GAA which, for the first time in history, breached the trillion mark, is her government’s "priority blueprint and commitment to ensure sustained socioeconomic growth and push reforms."

The proposed outlay was submitted to Congress last August 24, well within the 30-day constitutional mandate for submission from the date of the President’s State of the Nation Address (SoNA) in July.

The Arroyo leadership, according to her economic managers, is investing heavily on job creation, education, health care, power and electrification, roads and transportation infrastructure this year.

The GAA for 2006, they added, supports the President’s 10-point agenda laid out in the Medium-Term Philippine Development Plan (MTPDP).

Under the new programs, R13.1 billion has been earmarked for the Compensation Adjustment Fund to cover the R1,000 additional allowance for the national government’s workforce. retroactive to January this year.

An amount of R4.8 billion has been set aside for unpaid premiums to the Government Services Insurance System and other GFIs to improve the services and benefits extended by these entities to the civil servants.

De Venecia, Salceda and Andaya underscored intensified revenue collection and expenditure management efforts such as Tax Administration Computerization Project and similar programs of the Bureau of Internal Revenue.

They identified the others as the integrated computerization program of the Bureau of Customs, the Rationalization Program of the Government, and the Electronic Budget System of the DBM.

The Department of Education gets the lion’s share of the proposed outlay with R119.1 billion, which is R7.1 billion over its current budget share.

The increase will be used partly for the construction of 7,000 classrooms in areas experiencing acute shortage and the purchase of 18.1 million pairs of English textbooks and manuals amounting to R1.18 billion.

The Department of Public Works and Highways received the second largest allocation at R62.3 billion, followed by the National Defense, R46.6 billion, Interior and Local Government, R45.6 billion, Agriculture including AFMA-DA, R15.6 billion, Land Reform, R15 billion, and Transportation and Communications, R14.3 billion.

The Department of Health is earmarked R10.6 billion, Judiciary R8.5 billion, Finance, R6.9 billion, Environment and Natural Resources, R6.3 billion, and Foreign Affairs R5.3 billion.

The proposed budget is consistent with the deficit target of R124.9 billion or 2.1 percent of Gross Domestic Product (GDP), which is lower than last year’s deficit of R180 billion or 3.4 percent of GDP and R187 billion or 3.9 percent of GDP in 2004.

Debt service in the proposed national budget cornered R340 billion or one-third of the R1.053-trillion outlay, De Venecia said.

The R340-billion budget for interest payments, as originally estimated when the budget bill was proposed by the President, was R38.3 billion bigger than the R301.7 billion authorized for the same purpose in last year’s GAA, the Speaker said.

Chairman Salceda said some two weeks ago that savings on debt servicing could significantly be attained proportionately with the strengthening of the peso in recent weeks.

Broken down by expense class, the other "big ticket" items are "personal services" or payroll for the 1.1 million national government employees amounting to R330.5 billion, up by R42 billion from the current level.

Local governments’ share from national taxes will climb to R166.5 billion from this year’s R151.6 billion. The Internal Revenue Allotment makes up 15 percent of the 2006 budget measure, the same percentage as this year’s.

"But I am happy to note that the 2006 budget bill contains the biggest jump in infrastructure spending in a decade. From R64.5 billion this year, the public works budget is pegged at R97.8 billion next year," Andaya said.

The reason for the growth is the earmarking of a portion of the projected revenues from the EVAT law, he added.


Chief News Editor: Sol Jose Vanzi

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