MANILA, MARCH 23, 2007 (STAR) By Paolo Romero - Lawmakers have almost doubled their pork barrel allocations in the P1.126 trillion "social payback" national budget, which President Arroyo signed into law yesterday without the usual fanfare.

Budget Secretary Rolando Andaya Jr. said the President immediately signed the 1,162-page measure in her study room without the usual ceremony of lawmakers witnessing the signing.

Andaya said this yearís appropriation is a "social payback to the people for the fiscal turnaround of their government."

"The budget will cure underspending, spur growth, fund infrastructure and finance human development in a manner that will be transparent," Andaya said.

He described the national budget as a "catalogue of reimbursements for the taxes paid by the people, a redemption of our pledge to issue tax rebates in kind."

A top MalacaŮang official, however, revealed the efforts made by lawmakers in hammering out the items in the budget.

The official said senators and congressmen almost doubled their Priority Development "Assistance Fund (PDAF), better known as pork barrel allocation.

The official explained the Executive branch had asked for P6.240 billion for the PDAF but the final version signed yesterday bloated the figure to P11.45 billion or an increase of P5.2 billion.

The lawmakers sourced the bulk of the increase or P3.6 billion from the retirement and terminal leave pay of retirees, the official said.

The official pointed out the move might affect about 7,000 retirees.

"We might be forced to go slow on some projects and maybe the rationalization plans," the official told The STAR, referring to the governmentís ongoing effort to streamline the bureaucracy.

The Palace official claimed the lawmakers did not specify how the appropriation would be divided between members of the Senate and the House of Representatives but made it simply a "funding source" for their projects.

The legislators can tap the funding for their priority projects, the official said.

Lawmakers earlier agreed to reduce their pork barrel allocations by about 40 percent since 2004, or to P120 million and P40 million each, respectively, in the effort to avert a fiscal crisis.

There have been attempts among lawmakers to increase their pork barrel allocations but the move came under fire due to adverse public reaction and efforts by the administration to tame the budget deficit.

When sought for comment, Andaya claimed he learned of the increased pork barrel allocation when a copy of the signed budget law reached his desk.

He even claimed Mrs. Arroyo is not fully aware of the details of the new PDAF.

"I wasnít there during the bicameral conference committee so I was surprised but Iím forced to follow whatís in the law. It (insertions) was hatched there (in Congress)," he said.

Andaya explained senators and congressmen can request for funding for projects but they are constrained to follow certain parameters.

"Like no more basketball courts or waiting sheds but only roads and bridges, irrigation, electrification, and education," he said.

More items

Mrs. Arroyo later told reporters during a televised roundtable discussion in MalacaŮang that she only vetoed minor and "very technical" items in this yearís national expenditure program.

"We have such a backlog in infrastructure," Mrs. Arroyo said, pointing out the lack of infrastructure as the "biggest disincentive to investors."

She pointed out the budget of the Department of Public Works and Highways (DPWH) was increased by 50 percent to fund massive projects all over the country.

Among the six items vetoed by Mrs. Arroyo in the national budget were appropriations with no legal basis or "double counting" of items pushed by the Bureau of Food and Drugs, National Labor Relations Commission, Energy Regulatory Commission and the National Bureau of Investigation.

The President also vetoed the items seeking to create new positions in the DepEd, Armed Forces of the Philippines and the Defense department.

There were other items that included inappropriate funding for a repair project of the Department of Tourism on a property that is not owned by the agency, as well as efforts to apply local bidding procedures for foreign-assisted projects.

Andaya said the new budget will provide free meals to 1.5 million elementary pupils as incentive for attending classes.

This yearís budget will also include allocations for 3,000 new policemen, 700,000 scholars to schools and colleges, immunization of two million children, construction of 2,400 outlets of Botika ng Barangay.

Andaya said the new budget will provide medical insurance to 4.4 million indigents.

"We are also setting aside P10 billion to repair storm-damaged areas," he said, referring to the Calamity Assistance and Relief Efforts (CARE) funds.

To reflect the increase in revenues on expenditures, Andaya said all departments would get an increase on their allocations for this year.

The Department of Education leads the list of recipients with a budget of P128.6 billion, P15.4 billion higher than last yearís budget.

Included in the DepEdís budget is P2.05 billion for hiring of 16,390 teachers and P5.37 billion to build 7,326 classrooms.

Next is the DPWH with P71.2-billion allocation, P28.7 billion higher than what it had last year.

"This will enable it to construct or upgrade 3,251 kilometers of roads and 1,312 flood control systems, among others," Andaya said.

Others in the top ten are Department of National Defense with P54.3 billion; Department of the Interior and Local Governments, P51.3 billion; state colleges and universities, P17.3 billion; Department of Agriculture, including the Agriculture, Fisheries Modernization Act fund at P17.3 billion; Department of Transportation and Communications, P16.9 billion; Department of Health, P11.5 billion; the Judiciary, P9.3 billion; and Commission on Elections (Comelec), P9.17 billion.

Comelec, percentage-wise, notched the highest increase, this being an election year, at P5.13 billion.

By sectoral allocation, economic services including agriculture, trade and natural resources will get 21.8 percent of the budget pie, while social services, consisting of health and education spending, corner 28.1 percent.

"The figures donít lie: Tax dividends are heading towards the nationís schools, day care centers, and hospitals," Andaya pointed out.

General public services, on the other hand, account for 16.2 percent of this yearís spending; defense at 4.8 percent; and debt servicing at 28.3 percent.

The amount for interest payments declined to P303 billion this year from the 2006 level of P309 billion, "a trend that will be sustained in the years to come," Andaya remarked.

Interest payments this year could further dip if the peso continues to strengthen or stabilize below the P50 to a US dollar exchange rate, "a development that would free more resources for social spending," he said.

By object of expenditure, the maintenance and other operating expenses (MOOE) make up the bulk of this yearís budget, requiring P659.2 billion, or 58.5 percent of total programmed expenditures.

The amount already includes the debt service fund. The other big-ticket item in this cluster is the Internal Revenue Allotment (IRA), or the share of local government units from the collection of national taxes at P183.9 billion.

Personnel services, or the amount for payroll and pension contributions of active government employees and pension of veterans and retirees, will eat up 29.78 percent of the budget or P335.3 billion.

On the other hand, capital outlay spending this year is pegged at P131.4 billion, representing 11.68 percent.

In addition to roads and flood control, government will spend P8.3 billion to improve airports, and P193 million for new lighthouses and ports, Andaya said.

He said the purchase of goods and services will all be compliant with the Procurement Reform Act.

"In the budget execution phase, we will see to it that government will only spend for the right things, at the right price, for the right purpose, and by the right agency," he said.

This yearís P1.126 trillion budget is premised on total revenues of P1.118 trillion, resulting in a deficit of P63 billion, the last one to be incurred before government achieves a balanced budget in 2008, Andaya said.

Other macroeconomic assumptions of the budget include real GDP growth rate of 6.1 percent to 6.7 percent and foreign exchange rate of P48-P50 to US$1.

Chief News Editor: Sol Jose Vanzi

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