(STAR) The long wait for the 2008 proposed budget is over following Congress’ approval yesterday, but not without various cuts, particularly on debt service given the strengthening of the peso and lower interest rates.

Sen. Juan Ponce Enrile, Senate finance committee chairman, said the bicameral conference committee slashed debt service by P17.8 billion and cut the proposed P1.227-trillion budget to P1.2267 trillion, or P300 million less, representing the Priority Development Assistance Fund allocations of Sen. Panfilo Lacson (P200 million) and Sen. Antonio Trillanes IV (P100 million for infrastructure projects).

Lacson and Trillanes have said they would not use their pork barrel allocations.

The debt service on interest payment was also reduced by P8.1 billion on foreign loans because of the strong peso. The cut on the Kalayaan Barangay Fund to support the government campaign against insurgency was also restored, according to Enrile.

There was also partial restoration of the cut from the Light Rail Transit III South extension to provide the much needed appropriation for right of way.

Enrile said the bicameral conference committee reconciled the different versions of the two chambers, with the Senate acceding to the House of Representatives’ provision to cut debt service and allot the money instead to social services, particularly education and health.

“I agreed after we considered the exchange rate and other factors,” Enrile said.

Based on the bicameral report ratified by the Senate last night, the additional funding will be used for distance education for public secondary school; field operations of medical, dental and optical health; funding requirements for the creation of teaching and non-teaching positions; payment of unpaid prior years teachers’ benefits; teachers’ training with emphasis on science and math, and repair of school buildings.

State universities and colleges will receive an additional funding of P603.5 million from the presidential proposal or P8.3 million more compared with the House-approved budget to cover additional requirement for research and other needs, Enrile said.

The health sector will also receive additional funding for elimination of diseases as public health threat, rabies control, tuberculosis control, family health including family planning, management of health care waste disposal including purchase of autoclaves, drug rehabilitation centers, additional subsidies to hospitals, health insurance premium for indigents, prevention and information campaign on breast cancer and facility enhancement program.

The agricultural sector will receive an increase of P1.9 billion from President Arroyo’s proposed budget.

An additional P585.7 million will be provided for the judiciary for the maintenance of the halls of justice and to augment the personal services and operating requirements for the adjudication of court cases.

House version prevailed

House appropriations committee chairman Rep. Edcel Lagman said for the first time in a decade, the amount of loan interest payments proposed by Mrs. Arroyo was cut so that funds for social services, including health, education, social welfare, labor and employment, and infrastructure could be augmented.

“Congress, in the reconciled appropriations bill, gave more flesh to the President’s budget message of ‘Sustaining the Momentum of Growth’ by increasing the government’s budget for basic services and infrastructure development to heed the demands of both the masses and investors,” he said.

He said P15.9 billion of the reduction in loan interest payments would “correspond to savings as a result of the appreciation of the peso, with the exchange rate recomputed at P41 to a dollar from a high assumption of P48:$1 or a P7 differential.”

He added that for every peso of improvement in the exchange rate, the country saves P2.272 billion in interest payments on its foreign loans.

He pointed out that P5 billion in interest amortizations “for loans which are challenged as fraudulent, tainted and/or useless” and another P5 billion in “premature allocations for interest payments for program loans and bond issuances still in the pipeline” were slashed from the President’s budget proposal.

“As we promised our people, we showed our unity in the House by acting on the most important law in the land,” said Speaker Jose de Venecia Jr.

De Venecia said the General Appropriations Act will be ready for signing by President Arroyo next week. “The President will be back from her successful official trip abroad with the 2008 GAA waiting for her signature,” he said.

The P25.9-billion interest payments cut, plus P12.638 billion taken from “slow-moving projects, excess allocations and other miscellaneous allotments,” was then realigned to social services.

Thus, total realignments amounted to P38.5 billion.

The biggest beneficiaries of realigned funds are infrastructure (Department of Public Works and Highways), which got an additional P13 billion for a total of P94.7 billion; health, which received P5.8 billion more for a total of P25.8 billion;

education, which got an additional P4.8 billion for a total of P158.6 billion; agriculture, whose budget was increased by P1.9 billion to P29.2 billion; and justice and judiciary, whose funds went up by P1.2 billion to P16.6 billion.

Funds for sports development were augmented by P59 million for a total of P360 million “to propel Filipino athletes in their quest for gold in the Beijing Olympics in August 2008,” Lagman said.

The House version of the budget obviously prevailed in the bicameral conference on the 2008 expenditure program. The Senate was willing to cut the P296 billion that Mrs. Arroyo proposed for interest payments only by P5 billion.

By approving a bigger reduction, the two chambers of Congress have ignored Malacañang’s warning about cutting debt service funds.

On top of the P296 billion that the President is seeking in interest payments, roughly P300 billion is allocated as loan principal installments for this year.

Earlier, former Senate president Franklin Drilon criticized the House for increasing the DPWH budget by P13 billion, which he said would form part of the congressmen’s pork barrel.

However, sources in the conference committee said senators agreed to the increase after getting assurance from the House that they would share the additional pork barrel funds.

The pork barrel dispenses P200 million for each senator and P70 million for each congressman.

Meanwhile, Malacañang welcomed yesterday the passage of the budget saying it would help in sustaining the country’s economic growth.

Deputy Presidential Spokesman Anthony Golez said the Palace “hails the efforts of both Houses of Congress for the passage of the 2008 budget.”

“The approval of the 2008 budget will sustain the support for social services and infrastructure development that the country urgently needs in order to boost the momentum of economic growth our country is enjoying,” Golez said.

“The 2008 budget reenergizes the government’s commitment to expand programs for education, health, agriculture, social welfare services and environmental protection all over the country, which basically benefit the masses,” he said. – with Jess Diaz, Paolo Romero

Chief News Editor: Sol Jose Vanzi

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