BUDGET SECRETARY PRESENTS P1.137-TRILLION 2007 BUDGET
MANILA, AUGUST 3, 2006 (STAR) By Paolo Romero - Budget Secretary Rolando Andaya Jr. has presented to the Cabinet the proposed P1.137-trillion national budget for 2007, which has higher allocations for infrastructure and social services and smaller allocation for debt payments compared to this year’s spending proposal.
Andaya described the budget, which will be submitted to Congress for approval in three weeks, as a "pro-growth measure" because it increases spending in all areas "except debt service."
"Due to robust tax collection, spending for economic and social services will swell, while interest payments are expected to shrink," Andaya said.
Allocation for social services will jump from P256.8 billion this year to P335.4 billion next year or an increase of 77 percent. The share of economic services will surge from P170.3 billion to P239 billion, or an increase of 71 percent.
"We are increasing spending for health, education, housing and the likes by 30 percent. We are putting in P78.7 billion more for social services," Andaya added.
Investments in agriculture, agrarian reform, roads and tourism, which are clustered in the economic services sector, will also get a hefty 40 percent hike to P239 billion in 2007 from P170 billion this year.
For the first time in six years, interest payments will actually dip by as much as nine percent from P340 billion this year to P318 billion in 2007.
"We will free up P22 billion formerly allotted for debt service and use this for productive purposes. Instead of being remitted to our creditors, these funds will go to farms, roads and schools," Andaya said.
Debt servicing will slide to only 28.8 percent of the national budget from a high 36.2 percent this year.
The bias for social services is reflected in the proposed budget of the different departments. Education will get the highest allocation of P134 billion, up by P22.1 billion from this year’s P112 billion.
"We are increasing the Department of Education’s (DepEd) budget by 20 percent, the highest growth in history," Andaya stressed.
Another unprecedented feat, he said, is the 43.9 percent increase in the budget for the Department of Public Works and Highways (DPWH), which will get P21.8 billion more than its 2006 budget of P49.7 billion.
The budget of the Department of Transportation and Communications (DOTC) will likewise balloon from P8.3 billion to P17.5 billion, or a 110.9 percent hike that is reflective of the overall increase in capital outlays.
Institutions will likewise get a windfall from good fiscal performance, including local government units, which will have a bigger share of revenues in the form of Internal Revenue Allotments (IRA) and other shares. LGUs are getting an allocation of P186.4 billion, up from P151.6 billion this year.
Andaya emphasized that the increases would be made despite the "spending restrictions imposed by the plan to balance the budget by 2008."
The 2007 budget is premised on revenues of P1.118 trillion, thus, entailing a deficit of P63 billion.
Hopefully, it would be the last deficit before the government enters a "balanced budget era (in 2008)."
Raising the revenues will be the job mostly of the Bureau of Internal Revenue (BIR), which has a quota of P784 billion, and the Bureau of Customs, which has P235-billion collection target.
The 2007 budget is anchored on the following macro-economic assumptions: gross domestic product (GDP) growth of 5.7 percent, 4.3 to 4.8 percent inflation and an exchange rate of P51-53 to $1, among others.
Andaya said the working draft of the 2007 budget would still be fine-tuned. "There will still be improvements. The budget will be subjected to one more pass by the Cabinet before it is signed, sealed and delivered to Congress," he said.
Probe of banks’ high ATM fees pushed The Philippine Star 08/03/2006
A party-list congressman wants banks investigated for charging customers high fees for using automated teller machines (ATMs).
In House Resolution 1324, Rep. Joel Villanueva of the party-list group Citizens’ Battle Against Corruption (CIBAC) asked the House committee on banks and financial intermediaries yesterday to look into the "unconscionable" ATM fees that banks are collecting from depositors.
"Some banks collect P5, others P12, for every withdrawal from another bank. Some even impose a P2 fee for a mere account balance inquiry," Villanueva said.
He said those amounts may be small for owners and stockholders of banks, who are billionaires and multi-millionaires, but are a heavy burden for small depositors.
He said there is no need for bankers to collect the fees since the ATM facility should be part of their service.
Based on data he obtained from the Bangko Sentral ng Philippines, Villanueva revealed that the banking system made P24 billion in 2003 from fee-based transactions, including those made through ATMs.
He said the P24 billion earned in 2003 was P2 billion higher than the amount banks made the previous year from the same transactions.
He said if the 16.5 million ATM cardholders made an average two withdrawals a month from another bank and charged P5 per withdrawal, the banking system would have monthly earnings of P160.5 million and nearly P2 billion a year from such transactions alone.
"It is clear that ATMs have become a gold mine not only for thieves and hold-up men victimizing depositors using these machines but for bankers as well," he stressed.
Villanueva also wants the House banking committee to look into the practice of banks requiring depositors to maintain a huge minimum balance.
He noted that in many cases, the minimum balance is equal to the take-home pay of ordinary workers.
He said if the balance is not maintained, the depositor is charged a maintenance fee or his account is closed.
"In effect, we are penalizing this depositor for keeping his hard-earned money in the bank. We cannot encourage people to save if the banking system continues these practices," he stressed. — Jess Diaz
Chief News Editor: Sol Jose Vanzi
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