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BUSINESS HEADLINES THIS PAST WEEK...
(Mini Reads followed by Full Reports below)

WEAKENING REMITTANCES TAKE SHEEN OFF PHILIPPINE PESO


AUGUST 10 --The Philippine peso, languishing at a five-year low against the dollar, will lose more ground to the greenback in the coming months as remittances from millions of Filipinos overseas slow and foreign investors rotate out of the Manila stock market.
The Philippines is one of the fastest-growing economy in the region thanks to strong private demand. The peso , unlike many emerging-market currencies in Southeast Asia, has been relatively resilient in the face of volatile capital flows ahead of an eventual rise in U.S. interest rates. While it has weakened more than 2 percent against the greenback so far this year, the decline is less than the falls in the Thai baht, Indonesian rupiah and Malaysian ringgit. But the sputtering global economy may have at last dealt a blow to remittances - a major economic engine for the Philippines. Remittances in the first five months of 2015 grew on average 5.4 percent, compared with 6 percent a year earlier. That compared with annual increases of 7 percent in the years after the 2008 global financial crisis. Net foreign selling of Philippine stocks has also surged, weighing on the peso. READ MORE....RELATED REPORT....

ALSO: PH debt hits record P6.4t from Arroyo govt’s P4.718t -Nat'l Treasurer


AUGUST 14 --PURISIMA, ABAD THE country has incurred some P6.422 trillion in total debts, up P1.7 trillion from the Arroyo government’s P4.718 trillion, National Treasurer Roberto Tan said Thursday.
At a hearing on the 2016 national budget, members of the House appropriations committee demanded that Budget Secretary Florencio Abad disclose the loan contracts that the Aquino government has entered into during the last five years. “We demand to know why the country’s debts have been increasing? What kinds of loans have you contracted and where did all these money go?” Anakpawis Rep. Fernando Hicap said. Budget hearing. Budget Secretary Florencio Abad is joined by Finance Secretary Cesar Purisima and Treasurer Roberto Tan Jr. during a Senate hearing on the proposed 2016 national budget on Thursday. Ey Acasio But Tan said the debt burden has been lessened due to the government’s improved revenue collection and better expenditure program. Tan said the deficit is projected at P308.7 billion next year or 2 percent of gross domestic product. Finance Secretary Cesar Purisima said only a third of the national government’s outstanding debt is foreign. For this year, Tan said, of the P5.8 trillion being serviced, domestic debts account for P3.8 trillion while foreign loans account for the balance of P1.976 trillion. READ MORE...

ALSO Taguig City emerging hub: More businesses flock to BGC


AUGUST 15 --The Bonifacio Global City is becoming the country's premier business hub as more corporations and national agencies move their operations to Taguig. Philstar.com/File photo
The Bonifacio Global City (BGC), the central business district of Taguig City is poised to emerge as the country’s premier business hub as more and more businesses have chosen to relocate their hubs of operations there, the Taguig City government said yesterday.
According to the Taguig City government, top national and multinational corporations have already transferred their operations at the BGC such as the Intellectual Property Office (IPO) and the Philippine Chamber of Commerce and Industries. Meanwhile, some national agencies such as the Supreme Court, the Philippine Stock Exchange (PSE), the Securities and Exchange Commission (SEC) and the Insurance Commission (IC) have also bared plans to relocate their offices to BGC. Taguig Mayor Lani Cayetano has welcomed the influx of new partners into the city and the BGC, which she said is an “undeniable sign” of a growing consensus that investor confidence is at a high in Taguig. "The plan of the country’s top business regulators to follow suit and relocate to Taguig is an affirmative vote of confidence to a fast-rising, high-flying new premier financial center in the country that is BGC," Mayor Cayetano said. Cayetano said investor confidence is buoyed by the city’s business model of no corruption, lower taxes, better business policies and no “number coding” for vehicles. READ MORE...

ALSO: Bay Area Pasay City to become next biz office destination
[The Makati central business district (CBD) fast running out of office space, real estate services firm Colliers International Philippines said.]


The Bay Area in Pasay City
The Bay Area in Pasay City is looming as the next prime office destination in the country with the Makati central business district (CBD) fast running out of office space, real estate services firm Colliers International Philippines said. Colliers International said developers have started shifting their office projects to other parts of Metro Manila as Makati CBD is now low on available office supply for the business process outsourcing (BPO) market. Jie Espinosa, Colliers International director for office services, said the Bay Area is fast becoming an office hub due to the area’s ample supply of land for development. In addition, he said most of all the leading developers are starting to make their presence felt in the area not only in the residential market, but also in the office sector. Espinosa said Colliers International sees continued clamor for office spaces in the Bay Area with demand to be driven primarily by market conditions of other central business districts. “Cost and location are important for BPO companies. By 2016 to early 2017, BPOs will gravitate towards the Bay Area due to the lack of new office supply in Ortigas and Makati and soaring lease rates in Fort Bonifacio,” Espinosa said. READ MORE...

ALSO: Growth to remain unsustainable, shallow under globalization framework-


AUGUST 14 ---Trend of slowing economy and shrinking production persists precisely because the government has merely continued to rely on foreign markets and capital to push growth Despite recent claims made by Malacanang on the improving economy, the anticipated economic slowdown in the second quarter of 2015 affirms the trend of weakening economic growth. According to research group IBON, the growth figure shall be the lowest in four years. The group added that this indicates further that economic growth shall remain unsustainable and shallow as the Aquino administration continues to rely on external factors instead of building and fortifying the local economy. National Economic and Development Authority (NEDA) Director-General Arsenio Balisacan recently narrated that second quarter gross domestic product (GDP) would most probably not have expanded by 7.7% during the second quarter nor grown as much as it did in the same period last year at 6.4%. The GDP needs to expand by 7.7% from the second to the fourth quarter in order to fall within the 7-8% GDP growth full-year target. Balisacan partly attributed slackening growth to slower exports. Recent official data showed exports contracting in April to June this year. Total value of exports for the first semester of 2015 fell to US$28.8 billion from US$30.2 billion for the same period last year. Balisacan likewise said that manufacturing was weaker in June this year: in terms of value, it registered a 7.3% contraction compared to a 10.1% growth in June 2014. READ MORE...RELATED STORY...

ALSO Abad: 2016 budget to sustain inclusive development


AUGUST 10 --Budget Secretary Florencio "Butch" Abad on Monday said that the proposed 2016 national budget would reinforce and sustain the country's inclusive development. Philstar.com/AJ Bolando
- Department of Budget and Management (DBM) Secretary Florencio "Butch" Abad on Monday said that the proposed 2016 national budget will reinforce the country's inclusive development.
Abad said in a statement that the 2016 budget will also strengthen agency spending for stronger citizen participation. "The success of our previous budgetary reforms have already helped us turn public expenditure into something that is more transparent, accountable and participatory. With the budget increase for the coming year, we’re concentrating on widening the reach of the people’s budget to address more of the public needs," Abad said. The Budget secretary noted that the reform measures that the DBM has adopted in previous budgets would help government agencies in making optimal use of their budget allocations. The following budgetary reforms have bee implemented in the past years: CONTINUE READING...

ALSO Infographic: 10 agencies with largest 2016 budget allocation


AUGUST 10 --The House of Representatives Committee on Appropriations is set to start its deliberations on the proposed P3.002-trillion national budget for 2016 on Monday.
The Department of Education remains as the government agency with the highest budget allocation of P435.9 billion, an increase from its P377.7 billion budget in 2015. The Department of Public Works and Highways ranks second with P394.5 billion followed by the Department of National Defense with P172.7 billion. The Department of Social Welfare and Development (DSWD) and Department of Transportation and Communications (DOTC) are the only agencies which saw a decrease in their budget. The budget allocation for the DOTC decreased from P59.4 billion in 2015 to P49.3 billion in 2016. The DSWD's budget dropped from P108.3 billion in 2015 to P104.2 billion in 2015. VIEW THE INFOGRAPHIC.....

ALSO: P4.8-B congressional ‘insertions’ identified
[Based on his (Abad) budget proposal, the President will have P250 million for confidential expenses and another P250 million for intelligence expenses next year. He is only required to submit to the COA a certification stating in very general terms the purpose for which the money is used.]


AUGUST 11 ---This year’s P2.606-trillion national budget has at least P4.8 billion in congressional “insertions,” according to an opposition lawmaker. STAR/File photo
This year’s P2.606-trillion national budget has at least P4.8 billion in congressional “insertions,” according to an opposition lawmaker, who said it was a clear attempt to circumvent a Supreme Court ruling against the pork barrel system. Kabataan party-list Rep. Terry Ridon said a document from the Department of Budget and Management (DBM) has “pointed to where pork is hiding” in the 2015 national budget. Ridon was referring to the “Summary of Appropriations for Later Release” or “negative list,” an annex to National Budget Circular 556 or the Guidelines on the Release of Funds for 2015. The document outlines how most items in the national budget are considered released without need of a Special Allotment Release Order, while those under the so-called negative list still require the release of SAROs. Out of the P495.7 billion under the negative list, Ridon said P4.8 billion worth of projects are categorized either as “congressional insertion” or “congressional initiative.” The items are spread out in nine departments and six other executive offices and contain “no details” on how the funds will be used. “The DBM negative list exposes the new modus of politicians to secure pork funds. Due to the restrictions imposed by the SC decision on the unconstitutional PDAF, post-enactment identification of projects became cumbersome for corrupt politicians. To get around this restriction, certain unscrupulous legislators devised ways to insert items in the national budget before its enactment into law,” Ridon said. He said the DBM apparently wanted to wash its hands of the issue and identified the items as authored by lawmakers. “These insertions, however, are devoid of details required to be covered under the GAA-as-release document scheme, thereby necessitating further clearance from DBM before the funds are released,” he said. READ MORE...RELATED NEWS STORIES...


READ FULL MEDIA REPORTS HERE:

Weakening remittances take sheen off Philippine peso

MANILA, AUGUST 17, 2015 (GMA NEWS NETWORK)  August 10, 2015 By KAREN LEMA – The Philippine peso, languishing at a five-year low against the dollar, will lose more ground to the greenback in the coming months as remittances from millions of Filipinos overseas slow and foreign investors rotate out of the Manila stock market.

The Philippines is one of the fastest-growing economy in the region thanks to strong private demand. The peso , unlike many emerging-market currencies in Southeast Asia, has been relatively resilient in the face of volatile capital flows ahead of an eventual rise in U.S. interest rates. While it has weakened more than 2 percent against the greenback so far this year, the decline is less than the falls in the Thai baht, Indonesian rupiah and Malaysian ringgit.

But the sputtering global economy may have at last dealt a blow to remittances - a major economic engine for the Philippines. Remittances in the first five months of 2015 grew on average 5.4 percent, compared with 6 percent a year earlier. That compared with annual increases of 7 percent in the years after the 2008 global financial crisis. Net foreign selling of Philippine stocks has also surged, weighing on the peso.

READ MORE...

"The current account will get smaller via lower remittances and drive the peso weaker, so the fundamentals are changing," said Sean Yokota, head of Asia Strategy at the Scandinavian bank SEB in Singapore, adding that he expects the peso to lose more than 5 percent of its value against the greenback on a three-month horizon.

If the central bank had not intervened, the peso would have fared worse, said a trader. A central bank gauge showed the peso was the least volatile currency in Southeast Asia as of end-July. The baht, rupiah and ringgit were more than two times more volatile than the peso. On Friday, the peso drifted to as low as 45.82 per dollar, the weakest since July 2010. The peso's fall, however, will benefit exports - another growth engine - and could help the sector bounce back from a 17.4 percent year-on-year drop in May, its steepest in more than three years. — Reuters

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RELATED FROM GMA NEWS

Peso posts new 5-year low on US rate hike prospects August 6, 2015 6:29pm Tags: peso, dollar, currencies, forex

By KEITH RICHARD D. MARIANO, GMA News The peso remained weak against the greenback on Thursday, as investors remained optimistic that the US Federal Reserve is implementing the first rate hike in nine years come September.

The peso declined to a new five-year-low of 45.79:$1 after extending its losing streak for the second consecutive session. The local currency shed 4.5 centavos in addition to the 13 centavos it lost when it closed at 45.745 on Wednesday.

"The dollar is generally stronger across the board. Last night, it was bolstered by the strong US data on the services sector," Security Bank Corp. Senior Vice President Andre Ibarra told GMA News Online.

The services sector, which accounts for over a third of the US economy, posted its fastest expansion in almost 10 years, based on the non-manufacturing purchasing manager's index of the Institute for Supply Management.

The index reached 60.3 in July from 56 a month earlier. This is the highest reading on record since August 2005.

The positive data supposedly support expectations that the US central bank would indeed raise interest rates as early as September, given the sustained strength of the world's largest economy.

"It's all about the Fed," said Ibarra, noting that the weak peso does not reflect the performance of the Philippine economy. – VS, GMA News


MANILA STANDARD

PH debt hits record P6.4t By Christine F. Herrera | Aug. 14, 2015 at 12:01am

THE country has incurred some P6.422 trillion in total debts, up P1.7 trillion from the Arroyo government’s P4.718 trillion, National Treasurer Roberto Tan said Thursday.

At a hearing on the 2016 national budget, members of the House appropriations committee demanded that Budget Secretary Florencio Abad disclose the loan contracts that the Aquino government has entered into during the last five years.

“We demand to know why the country’s debts have been increasing? What kinds of loans have you contracted and where did all these money go?” Anakpawis Rep. Fernando Hicap said.

Budget hearing. Budget Secretary Florencio Abad is joined by Finance Secretary Cesar Purisima and Treasurer Roberto Tan Jr. during a Senate hearing on the proposed 2016 national budget on Thursday. Ey Acasio But Tan said the debt burden has been lessened due to the government’s improved revenue collection and better expenditure program.

Tan said the deficit is projected at P308.7 billion next year or 2 percent of gross domestic product.

Finance Secretary Cesar Purisima said only a third of the national government’s outstanding debt is foreign.

For this year, Tan said, of the P5.8 trillion being serviced, domestic debts account for P3.8 trillion while foreign loans account for the balance of P1.976 trillion.

READ MORE...

“Further consolidation of debt created a sustainable fiscal environment and improving the debt metrics resulted in lower reliance on foreign debt,” Purisima told the panel.

Purisima said revenues continued to move up in 2015 at double-digit rates with a revenue growth of 16 percent for the first six months of 2015.

The total revenues to be collected for 2016 are pegged at P2.696.8 trillion with the Bureau of Internal Revenue contributing P2.025 trillion, Bureau of Customs P498.7 billion, other offices with P19 billion and non-tax revenues amounting to P151.4 billion.

Expenditures are expected to reach P3.005 trillion, Purisima said.

He said the interest payment-to-revenue ratio has declined by almost half resulting in more funds being channeled into productive spending.

“Proactive debt management has decreased the debt burden on expenditures, creating more fiscal space to fund social commitments,” Purisima said.

Purisima, Tan and Abad failed to give details of the domestic and foreign loans contracted as demanded by Hicap. but the Budget chief said they would provide a list of loans next week.


PHILSTAR

More businesses flock to BGC By Mike Frialde | Updated August 15, 2015 - 4:59pm 0 61 googleplus0 0


The Bonifacio Global City is becoming the country's premier business hub as more corporations and national agencies move their operations to Taguig. Philstar.com/File photo

MANILA, Philippines - The Bonifacio Global City (BGC), the central business district of Taguig City is poised to emerge as the country’s premier business hub as more and more businesses have chosen to relocate their hubs of operations there, the Taguig City government said yesterday.

According to the Taguig City government, top national and multinational corporations have already transferred their operations at the BGC such as the Intellectual Property Office (IPO) and the Philippine Chamber of Commerce and Industries.

Meanwhile, some national agencies such as the Supreme Court, the Philippine Stock Exchange (PSE), the Securities and Exchange Commission (SEC) and the Insurance Commission (IC) have also bared plans to relocate their offices to BGC.

Taguig Mayor Lani Cayetano has welcomed the influx of new partners into the city and the BGC, which she said is an “undeniable sign” of a growing consensus that investor confidence is at a high in Taguig.

"The plan of the country’s top business regulators to follow suit and relocate to Taguig is an affirmative vote of confidence to a fast-rising, high-flying new premier financial center in the country that is BGC," Mayor Cayetano said.

Cayetano said investor confidence is buoyed by the city’s business model of no corruption, lower taxes, better business policies and no “number coding” for vehicles.

READ MORE...

“Here in Taguig, we always get a vote of confidence from businesses, who we consider partners in development. We treat them with respect, the highest form of which is to show them that the taxes they paid really go to the people of Taguig,” she said.

Some of the top businesses that have already relocated to Taguig include Coca-Cola Bottlers Philippines Inc., its foundation Coca-Cola Foundation Philippines Inc. and Eastwest Bank.

The BGC is now also home to big companies like Smartmatic Philippines Inc., Manila Water Company Inc., Chinatrust Commercial Bank Corporation, General Electric Philippines Inc., Hewlett-Packard AP LTD- Phil., Sony Philippines Inc., Sun Life Corporation and the Hongkong and Shanghai Banking Corp. Limited.

Even prominent law firms like Abello Concepcion Regala & Cruz (ACCRA Law) and Villaraza Cruz Marcelo & Angangco (CVC Law) are now located in Taguig.

Premier schools such as the University of the Philippines and the De La Salle University will also soon open separate campuses at the BGC.

Earlier, the World Bank recognized Taguig as one of the best places in the country to do business in. In the institution’s most recent Ease of Doing Business study, Taguig ranked first among the cities in Metro Manila to have the easiest and least number of processes of putting up a business, besting richer and older cities.


PHILSTAR

Bay Area set to become next biz office destination By Richmond S. Mercurio (The Philippine Star) | Updated August 16, 2015 - 12:00am 0 259 googleplus0 0


The Bay Area in Pasay City

MANILA, Philippines - The Bay Area in Pasay City is looming as the next prime office destination in the country with the Makati central business district (CBD) fast running out of office space, real estate services firm Colliers International Philippines said.

Colliers International said developers have started shifting their office projects to other parts of Metro Manila as Makati CBD is now low on available office supply for the business process outsourcing (BPO) market.

Jie Espinosa, Colliers International director for office services, said the Bay Area is fast becoming an office hub due to the area’s ample supply of land for development.

In addition, he said most of all the leading developers are starting to make their presence felt in the area not only in the residential market, but also in the office sector.

Espinosa said Colliers International sees continued clamor for office spaces in the Bay Area with demand to be driven primarily by market conditions of other central business districts.

“Cost and location are important for BPO companies. By 2016 to early 2017, BPOs will gravitate towards the Bay Area due to the lack of new office supply in Ortigas and Makati and soaring lease rates in Fort Bonifacio,” Espinosa said.

READ MORE...

Colliers International said Federal Land’s iMET BPO is the first of a series of office buildings that will take advantage of the burgeoning office sector in the Bay Area.

“Federal Land is taking advantage of an already established township that will support its upcoming office buildings. It already has a retail strip called Blue Bay Walk and several condominiums that cater to various markets. Proximate to transport hubs like buses, LRT/MRT, shuttle and jeepneys, the complex is ideal location for all BPO expansion and even for new locators,” the real estate services firm said.

The office building is targeted for completion by the third quarter of 2016 and has a total of 10 office floors with a 2,029-square meter floor plate.


IBON FOUNDATION

Growth to remain unsustainable, shallow under globalization framework--IBON 14 August 2015 |

Trend of slowing economy and shrinking production persists precisely because the government has merely continued to rely on foreign markets and capital to push growth

Despite recent claims made by Malacanang on the improving economy, the anticipated economic slowdown in the second quarter of 2015 affirms the trend of weakening economic growth. According to research group IBON, the growth figure shall be the lowest in four years.

The group added that this indicates further that economic growth shall remain unsustainable and shallow as the Aquino administration continues to rely on external factors instead of building and fortifying the local economy. National Economic and Development Authority (NEDA) Director-General Arsenio Balisacan recently narrated that second quarter gross domestic product (GDP) would most probably not have expanded by 7.7% during the second quarter nor grown as much as it did in the same period last year at 6.4%.

The GDP needs to expand by 7.7% from the second to the fourth quarter in order to fall within the 7-8% GDP growth full-year target. Balisacan partly attributed slackening growth to slower exports.

Recent official data showed exports contracting in April to June this year. Total value of exports for the first semester of 2015 fell to US$28.8 billion from US$30.2 billion for the same period last year. Balisacan likewise said that manufacturing was weaker in June this year: in terms of value, it registered a 7.3% contraction compared to a 10.1% growth in June 2014.

READ MORE...

In terms of volume, manufacturing declined by 3.6% compared to a 12.7% growth in June 2014. IBON pointed, however, that these have been the overall trend in the economy’s production base.

The share of manufacturing in GDP has consistently fallen in decades and continued the slide during Aquino's term, from 21.4% in 2010 to only 20.6% in 2014. The share of agriculture in GDP has also shrunk to its smallest, from 12.3% in 2010 to 11.3% in 2014.

Government expresses optimism that the following semester will see more rapid growth in foreign investments, stronger exports, and higher confidence in the business and consumer sectors.

Yet, this trend of slowing economy and shrinking production persists precisely because the government has merely continued to rely on foreign markets and capital to push growth instead of giving ample support to domestic industry and agriculture, said the group.

For the economy to have sustainable and profound growth, economic policy must be shifted to support domestic production base and local resource mobilization and veer away from pro-foreign and globalization-inspired goals. Instead of hyping to revive its fading economic miracle, the Aquino administration must focus on genuinely improving the economy’s fundamentals, IBON said.

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IBON FOUNDATION RESEARCH

DAP-like mechanism persists in proposed 2016 budget 10 August 2015 |

The proposed 2016 budget includes an apparent attempt to legalize DAP through Section 63 of the 2016 NEP's general provisions

Despite a Supreme Court decision last year declaring the Disbursement Acceleration Program (DAP) unconstitutional, a mechanism to retain discretionary lump-sum funds persists in the proposed 2016 budget, research group IBON said.

Instituted by Department of Budget Management secretary Florencio Abad, the controversial DAP allowed the President to decide on using funds from discontinued projects or 'savings' from completed ones. It has been criticized by groups as another form of pork barrel funds that are spent on the sole discretion of the Executive branch. These also do not undergo congressional deliberation or public scrutiny.

According to IBON, the proposed 2016 budget includes an apparent attempt to legalize DAP through Section 63 of the 2016 NEP's general provisions. The section defines what counts as savings and can be used elsewhere without undergoing congressional or public scrutiny.

The proposed 2016 budget drops the qualifier "final" in describing discontinued or abandoned projects whose remaining funds can be considered savings. This potentially allows savings to be declared in the middle of the year just as the DAP had authorized.

READ MORE...

The 2015 General Appropriations Act (GAA), pre-DAP 2014 GAA and previous budgets all had this qualifier "final". Removing this from the 2016 budget creates the legal basis for the president and budget secretary to use funds at their discretion as they had done using the DAP, IBON warned.

The research group has earlier noted that the proposed national budget submitted by Malacanang still had an increase of Php61.7 billion in special purpose funds (SPFs), which are notorious for having lump-sum amounts. SPFs increased immensely by Php61.7 billion to reach Php430.4 billion in the proposed budget for next year. One of these is the 69% increase in the allocation to local government units, which includes an almost 500% increase in “local government support fund”. (end)


PHILSTAR

Abad: 2016 budget to sustain inclusive development By Patricia Lourdes Viray (philstar.com) | Updated August 10, 2015 - 2:46pm 1 6 googleplus0 0


Budget Secretary Florencio "Butch" Abad on Monday said that the proposed 2016 national budget would reinforce and sustain the country's inclusive development. Philstar.com/AJ Bolando

MANILA, Philippines - Department of Budget and Management (DBM) Secretary Florencio "Butch" Abad on Monday said that the proposed 2016 national budget will reinforce the country's inclusive development.

Abad said in a statement that the 2016 budget will also strengthen agency spending for stronger citizen participation.

"The success of our previous budgetary reforms have already helped us turn public expenditure into something that is more transparent, accountable and participatory. With the budget increase for the coming year, we’re concentrating on widening the reach of the people’s budget to address more of the public needs," Abad said.

The Budget secretary noted that the reform measures that the DBM has adopted in previous budgets would help government agencies in making optimal use of their budget allocations.

The following budgetary reforms have bee implemented in the past years:

CONTINUE READING....

The 2016 budget will support the following government programs:

"Following the 2016 Budget Priorities Framework, this proposed budget will help us attend to the needs of 44 of our poorest and most climate-vulnerable provinces. We believe a budget that is responsive to the needs of our people is a budget that truly empowers," Abad said.

The House of Representatives committee on appropriations has started its deliberations on the proposed P3.002-trillion national budget for 2016 on Monday.


PHILSTAR

Infographic: 10 agencies with largest 2016 budget allocation (philstar.com) | Updated August 10, 2015 - 10:40am 2 17

MANILA, Philippines - The House of Representatives Committee on Appropriations is set to start its deliberations on the proposed P3.002-trillion national budget for 2016 on Monday.

The Department of Education remains as the government agency with the highest budget allocation of P435.9 billion, an increase from its P377.7 billion budget in 2015.

The Department of Public Works and Highways ranks second with P394.5 billion followed by the Department of National Defense with P172.7 billion.

The Department of Social Welfare and Development (DSWD) and Department of Transportation and Communications (DOTC) are the only agencies which saw a decrease in their budget.

The budget allocation for the DOTC decreased from P59.4 billion in 2015 to P49.3 billion in 2016. The DSWD's budget dropped from P108.3 billion in 2015 to P104.2 billion in 2015.


PHILSTAR

P4.8-B congressional ‘insertions’ identified By Paolo Romero (The Philippine Star) | Updated August 11, 2015 - 12:00am 0 0 googleplus0 0


This year’s P2.606-trillion national budget has at least P4.8 billion in congressional “insertions,” according to an opposition lawmaker. STAR/File photo

MANILA, Philippines - This year’s P2.606-trillion national budget has at least P4.8 billion in congressional “insertions,” according to an opposition lawmaker, who said it was a clear attempt to circumvent a Supreme Court ruling against the pork barrel system.

Kabataan party-list Rep. Terry Ridon said a document from the Department of Budget and Management (DBM) has “pointed to where pork is hiding” in the 2015 national budget.

Ridon was referring to the “Summary of Appropriations for Later Release” or “negative list,” an annex to National Budget Circular 556 or the Guidelines on the Release of Funds for 2015.

The document outlines how most items in the national budget are considered released without need of a Special Allotment Release Order, while those under the so-called negative list still require the release of SAROs.

Out of the P495.7 billion under the negative list, Ridon said P4.8 billion worth of projects are categorized either as “congressional insertion” or “congressional initiative.” The items are spread out in nine departments and six other executive offices and contain “no details” on how the funds will be used.

“The DBM negative list exposes the new modus of politicians to secure pork funds. Due to the restrictions imposed by the SC decision on the unconstitutional PDAF, post-enactment identification of projects became cumbersome for corrupt politicians.

To get around this restriction, certain unscrupulous legislators devised ways to insert items in the national budget before its enactment into law,” Ridon said.

He said the DBM apparently wanted to wash its hands of the issue and identified the items as authored by lawmakers.

“These insertions, however, are devoid of details required to be covered under the GAA-as-release document scheme, thereby necessitating further clearance from DBM before the funds are released,” he said.

READ MORE...

Some of the items labeled as congressional insertions or initiatives are for the promotion of alternative fuels and technologies development and utilization and energy efficiency and conservation worth P150 million for the Department of Energy; protective services for individuals and families in especially difficult circumstances worth P401.5 million for the Department of Social Welfare and Development and miscellaneous projects for the Philippine Army, Air Force and Navy totaling P455.5 million.


KABATAAN PARTY LIST REP TERRY RIDON COURTESY OF PILITICS.COM.PH

“The manner in which these questionable items were secretly inserted in the budget, and the fact that said items do not have details on how they will be utilized, all point to one indisputable fact: that these items are, for all intents and purposes, pork barrel,” Ridon said.

He said he suspects the P4.8 billion is just the tip of the iceberg.

He expressed concern that Budget Secretary Florencio Abad and the Aquino administration were able to conceal other pork barrel funds in the national budget.

‘Accountable governance’ Presidential Communications Operations Office Secretary Herminio Coloma Jr. said the Aquino administration is “firmly committed to open, transparent and accountable governance, especially in terms of judicious allocation and proper disbursement of public funds.”

Coloma was reacting to the claim of Bayan Muna party-list Rep. Neri Colmenares that next year’s budget has around P145 billion in pork barrel funds.

Colmenares said P97.4 billion of the amount is part of the special purpose funds and P50 billion spread out among various departments.

“That’s the problem when you shoot from the mouth, you expose your ignorance,” Abad said, referring to Navotas Rep. Toby Tiangco’s claim that P581 billion in the 2016 budget is “campaign war chest” for the Liberal Party.

On former senator Panfilo Lacson’s claim that the 2016 budget has P424 billion in pork barrel funds, Abad said the former Yolanda rehabilitation chief should reach out to the DBM about his misgivings on the budget.

In an interview over radio dzMM yesterday, Lacson said the government has also more than P500 billion in unspent funds.


Former Sen. Panfilo Lacson and former National Treasurer Leonor Briones agree that the 2015, not the 2016, national budget could end up as part of the campaign kitty of the administration party. FROM CNN PHILIPPINES AUGUST 6, 2015

Former national treasurer Leonor Briones also warned about the presence of pork barrel funds that will be used for the elections.

At a news forum in Quezon City, Briones said the President has increased the lump sum Special Purpose Funds from P368.72 billion for this year to P430.43 billion next year without giving details.

“That’s P368.72 billion and P430.43 billion all under the sole discretion of the President. Only the President can release the amount and can decide where the money would go,” Briones told reporters.

She said Aquino also increased the allocation to local government units from P33.47 billion this year to P56.52 billion for 2016.

“The national spending plans for 2015 and 2016 were designed as election budgets,” Briones said.

Transparency

Valenzuela City Rep. Sherwin Gatchalian wants a more transparent accounting of the President’s P500-million intelligence fund and the more than P2 billion in Presidential Social Fund (PSF).

“It would be a good legacy for P-Noy’s tuwid na daan if during his last 10 months in Malacañang a more transparent accounting of his PSF and intel funds will be made by his officials,” Gatchalian said.

“The PSF can be considered as a presidential pork barrel since its disbursement is known only to Malacañang and does not undergo the usual post-audit scrutiny of the Commission on Audit (COA). This makes it susceptible to fund misuse especially now that elections are coming up,” he said.

“It’s about time that Congress, which has the power of the purse, make a scrutiny of the PSF and the P500-million intelligence fund to determine if these funds are being spent wisely by the Aquino administration, especially at a time when elections are just around the corner,” he added.

The PSF is mainly sourced from the Philippine Amusement and Gaming Corp. (Pagcor) and the Philippine Charity Sweepstakes Office (PCSO). Only the two government-owned and controlled corporations (GOCCs) undergo COA scrutiny, but not their contributions to the PSF.

Pagcor remits around P2 billion to the PSF annually and the PCSO around P900 million. The amount remitted to PSF is net of the two GOCCs’ salaries and monthly operating expenses plus the 23 percent tax being paid to the Bureau of Internal Revenue.

The P500-million presidential intelligence fund is under the item Presidential Anti-Organized Crime Commission (PAOCC), which is headed by Executive Secretary Paquito Ochoa Jr.

Based on his budget proposal, the President will have P250 million for confidential expenses and another P250 million for intelligence expenses next year. He is only required to submit to the COA a certification stating in very general terms the purpose for which the money is used.

The P500 million is part of the nearly P2-billion appropriation for maintenance and other operating expenses for the Office of the President (OP).

The OP budget will increase by more than P200 million to P2.860 billion in 2016 from P2.602 billion this year. – With Delon Porcalla

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RELATED FROM MALAYA BUSINESS INSIGHTS

COLOMA INSISTS 2016 BUDGET IS PORK-FREE August 11, 2015 BY JOCELYN MONTEMAYOR AND WENDELL VIGILIA


COMMUNICATIONS Secretary Herminio Coloma Jr. yesterday said Malacañang is open to a scrutiny of the proposed P3.002-trillion budget for 2016 while Budget Secretary Florencio Abad maintained there is no pork in the proposed appropriation.

Militant lawmakers under the Makabayan bloc on Sunday alleged that the proposed budget includes P145 billion in lump sum, which they consider “pork barrel,” because these proposed expenditures are not itemized, and could be subject of discretionary use.

Coloma said Malacañang is open to a dissection of the proposed budget because the Aquino administration “is firmly committed to open, transparent and accountable governance, especially in terms of judicious allocation and proper disbursement of public funds.”

Abad, at the sidelines of the opening of the budget hearing of the House committee on appropriations yesterday, told reporters the lump sum items in the proposed budget are all justified, pursuant to the Supreme Court’s November 2013 decision declaring as unconstitutional the Priority Development Assistance Fund, or “pork barrel,” system.

He reiterated there are only three lump sum items in the next national budget: the Calamity Fund (National Disaster Risk Reduction Management Fund); the Contingent Fund which, for one, is used to repatriate Filipinos trapped in war-torn countries; and the “Allocation to Local Government Units (ALGU)” which is the share of local government units from national proceeds from mining, power plants and other projects.

“There are only three lump sum funds in the budget – the calamity fund with P19 billion, the contingency fund with P4 billion, and ALGU with more than P5 billion, which is the share of the local government in royalties,” Abad said.

Bayan Muna Rep. Neri Colmenares said Sunday there at least P97.4 billion in lump sum from the Special Purpose Fund and another P50 billion spread out in various departments.

The budget hearing at the House kicked off with the annual briefing by members of the Development Budget Coordination Committee, the inter-agency body that determines overall economic targets, expenditure levels, and budget of the government.

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Abad said government is stepping up the disaggregation of lump sum funds in the 2016 national budget “in addition to our commitment for greater transparency, credibility, and accountability.”

Some of the budgetary reforms implemented in the past years, Abad said, are the “General Appropriations Act-as-Release-Document (GAARD) regime,” the Bottom-up Budgeting (BuB), the “Performance-Informed Budgeting (PIB),” and the installation of the “Unified Accounts Code Structure (UACS).”

Reforms in the 2016 budget include transformation of the Department of Public Works and Highways as lead construction agency of the government; further reduction of special purpose funds in magnitude, allowing performance-based downloading of funds to local governments; “Two-Tier Budgeting”; and the “Program Expenditure Classification.”

Another member of the left-leaning bloc, Rep. Terry Ridon of the Kabataan party-list group, said “pork” remains in the current year’s budget and can be spotted in an official DBM document.

Ridon was referring to a document titled “Summary of Appropriations for Later Release” or “negative list,” which is an annex to National Budget Circular No. 556 or the “Guidelines on the Release of Funds for FY 2015.”

NBC 556 outlines how the “GAA as release document” scheme works, a process wherein most items in the national budget are considered released without need of a special allotment release order (SARO).

However, items flagged under the “negative list” still require the release of SAROs. The same list includes items which need further details for implementation.

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RELATED FROM MAKATI BUSINESS CLUB WEBSITE

MAKING GROWTH INCLUSIVE — PRIORITY MEASURES OF THE BUSINESS COMMUNITY 2015-2016


Ramon R. Del Rosario Jr., Chairman, Makati Business Club
Fourth Arangkada Philippines Anniversary Forum
3 March 2015, Tuesday
Rizal Ballroom, Makati Shangri-la Hotel

National Treasurer Bobby Tan,
Excellencies of the diplomatic corps,
My colleagues in the Joint Foreign Chambers and Philippine Business Groups present here today,
Ladies and gentlemen,

A very good morning to all of you.

First of all, thank you for this great honor of addressing you at the fourth anniversary forum of Arangkada Philippines. Arangkada is an excellent venue for constructive dialogue, where the private sector speaks with a unified voice on specific ways by which the Philippines can further accelerate its progress, while government has the opportunity to update the business community on the tangible measures it seeks to implement towards sustained and inclusive growth.

The Aquino administration is now entering the homestretch of its term. There are now only 16 months remaining to institutionalize the much-needed and long-overdue reforms that will ensure that the considerable gains of the last four-and-a-half years will not be reversed.

After all, the President himself stated in his inaugural address that he wants strong institutions to be the legacy of his term—and this is a goal that the business community wholeheartedly supports.

To give credit where it is due, the Aquino administration deserves high marks for its excellent handling of our economic fundamentals. Congratulations indeed to Secretary Purisima and the other members of the Economic Development Cluster for laying rock solid foundations for our economy even in the face of numerous natural and man-made calamities we have had to face.

The Aquino government also deserves much credit for its transparency initiatives, as we recognize the contributions that Open Data Philippines, the Budget and Customs ng Bayan webportals, and the visible online presence of the Official Gazette, among others, bring to our good governance agenda and to the development of a culture of greater transparency and accountability.

In international relations, the Aquino administration likewise deserves credit for the very principled position it has taken of insisting on resolving our maritime disputes through the rule of law, which has gained the country unprecedented admiration and respect in the community of nations. Of course, this is in addition to the excellent work being done in economic diplomacy, especially with our country’s hosting of APEC this year.

The government can certainly count on the private sector’s support as we prepare for the APEC Economic Leaders’ Meeting later in November.

Clearly we are in much better shape today than we have been for the last 16 years. And with the growth momentum of the last three years, including the strong growth of the entire 2014, most especially the vigorous growth of the 4th quarter, we looked forward to a very dynamic 2015.

Then, 37 days ago came Mamasapano and with it, questions on whether this unfortunate tragedy would threaten to reverse all that we have achieved these past four-and-a-half years and possibly usher the country into another long period of lost opportunities and unrealized potential.

It was in this context that many of us in the business community issued a statement calling for sobriety, courage and unity.

The statement appropriately expressed the business community’s utmost respect and sympathies to the families of the gallant policemen of the PNP Special Action Force, and the families of our brother Muslim Filipinos and the innocent civilians who perished in that tragic encounter.

But we noted too that in the midst of our collective grief, certain groups and individuals have called for all-out war in Mindanao, carelessly branded our fellow Muslim Filipinos as terrorists, cast doubt on the Bangsamoro Peace Process and the sincerity of our negotiators, and vigorously demanded the resignation of the President.

We lamented that such brinkmanship tactics have put at risk the entire peace process, which the government and our local and international partners have painstakingly worked on for decades, and the laudable milestones that the country has achieved since 2010.

Thus, we declared that we do not and will not support calls for an all-out war and for the resignation of President Aquino, as we declared our continuing support for the Bangsamoro peace process.

As we further said in our statement, political manipulation must not be allowed to take advantage of legitimate emotion and grief to the point that reason will be discarded and all the gains we have made will be undone.

Rather, we appeal for sobriety, courage, and unity, as we channel our energies towards reconciliation and a genuine search for truth and justice.

In reiterating our support for the Bangsamoro Peace Process we said that there is no other alternative to guarantee the aspirations of the Bangsamoro people but total and lasting peace, and the passage of the Bangsamoro Basic Law is a crucial component in the overall strategy for peace in Mindanao.

We therefore appeal to the Aquino administration and all parties involved to put the peace process back on track at the earliest time possible.

To achieve this, the complete facts surrounding the Mamasapano incident must still be satisfactorily established and the demands of justice must be served.

Thus, we also call on the PNP Board of Inquiry, the Armed Forces, the MILF, the Department of Justice, and Congress to complete their investigations at the soonest time possible and render their reports to the nation.

But as these inquiries are unlikely to fully satisfy the public, it is likely that President Aquino, as our Commander in Chief, will have no other recourse but to himself give the Filipino people a full accounting of the incident that lets all the chips fall where they may.

Indeed, only with a full and satisfactory accounting will our common pursuit of justice be possible, and only when justice is satisfied can the peace process move forward.

While I fully support putting the peace process back on track as early as possible, with the hope of still passing the Bangsamoro Basic Law and implementing the required referendum in the next 16 months, I share the pessimism of many that the prevailing environment and the shortage of time may no longer allow all the work to be done in this limited period.

But I certainly do not see this as an argument to give up on Peace in Mindanao. I see it as another reason to be very discriminating about our choice of leader in 2016!

Getting the Bangsamoro peace process back on track early is also critical in order that we as a nation can maintain the forward momentum we have gained over the past 56 months. We have much work ahead not only to institutionalize our gains, but also to fully realize the vast potentials that are now within our reach.

The public and private sectors must come together to place the country on a continuous path towards progress and development and this requires an assertive effort to focus on unfinished, but certainly critical, priorities.

Let us first review our legislative priorities.

If we truly wish to institutionalize the gains of the last 56 months, the most critical among these is the Freedom of Information Bill, which I continue to hope will finally pass in the House of Representatives this year as promised by no less than Speaker Belmonte.

I earlier mentioned some of the government’s transparency initiatives; however, we strongly support the FOI bill as it will institutionalize the culture of transparency and accountability that President Aquino has initiated.

The first FOI bill was filed all the way back in 1987 in compliance with the Constitution. 28 years is certainly too long a time for a Constitutional mandate and a basic right to remain unrealized.

The FOI bill must be passed so that our noteworthy good governance gains will be largely irreversible and sustained in subsequent administrations.

Next, I would like to strongly reiterate our call to amend the restrictive economic provisions of the Constitution as embodied in House Resolution No. 1 by Speaker Feliciano Belmonte.

This amendment will give Congress the flexibility to determine which areas of the economy should be opened to increased foreign participation based on thorough deliberations from the committee level to the plenary.

The Philippines is among the very few nations with specific economic restrictions lodged into its constitution, whereas a large number of countries subscribe to the principle of allowing their legislatures to determine economic policy.

There is no better time than now to accelerate the process of opening up our economy as we host the annual meeting of APEC, which champions policies of open markets and enhanced investments and trade among its member economies.

We also believe that engaging in economic Charter Change will be beneficial for the medium- and long-term, especially in this period of ASEAN integration and the improved attractiveness of the Philippines as an investment destination.

Significantly, greater openness in certain sectors is a prerequisite to joining high-level agreements such as the Trans-Pacific Partnership.

Research by Dr. Cesar Cororaton of the Virginia Polytechnic Institute and State University said that Philippine exports are seen to rise significantly with TPP membership. Also consider that since a good number of our major trading partners, such as the United States, Japan, Malaysia, Singapore, and Vietnam, are part of the TPP, we definitely cannot afford to be left out of this agreement and face severe handicaps in future trade with these countries.

I would also like to add my support to well publicized initiatives from business for the creation of a Department of Information and Communications Technology, which will give appropriate focus and support to a sector that should continue to experience dynamic growth. Critical also to maintain our growth momentum is a well-crafted Competition Law to promote a level playing field in our country and further improve our investment climate.

Finally, we fully support the passage of the amendments to the Build-Operate-Transfer Act, which will institutionalize the PPP Center and its various mechanisms, and further strengthen the present processes in big-ticket project procurement.

Allow me now to move to the judiciary.

The Maguindanao massacre case has been ongoing for more than five years. I think this case is important in terms of maintaining our people’s faith in our justice system because if a crime as blatant as this is not successfully prosecuted and the perpetrators put to jail, how can we trust our judicial system? With this important trial proceeding at a sluggish pace, questions arise as to whether the government is exerting everything in its power to ensure a speedy and fair resolution.

While this complicated case involves powerful individuals with significant resources at their disposal, there are actionable steps that can be done to expedite the cases. For instance, a prominent law dean suggested that the cases against the Ampatuans be separated and prioritized, so that these will be resolved expeditiously.

Access to assets and outside communications of the accused can also be severely curtailed to prevent any further intimidation or elimination of witnesses. Certainly, innovative methods of legally and ethically speeding up the resolution of this case, as well as of the cases against former president Arroyo and the senators accused in the Napoles pork barrel scam, can be formulated.

In these cases, the defense strategy to delay the proceedings in anticipation of a friendlier administration in 2016 is clear. We implore government to urgently bring all of these to a quick resolution.

Moving now to the executive branch, the most critical priority area is accelerating infrastructure development. Since 2010, we have seen the Public-Private Partnership program steadily gain steam, with about 50 projects of varying sizes in the pipeline due for implementation.

By simple observation alone, the country faces a massive infrastructure gap.

These mass transportation projects, expressways, seaports, and airports must be rapidly constructed with little to no blockages present.

We are, nevertheless, aware that the awarding of a contract does not guarantee its full and immediate implementation.

Another set of challenges emerge after the bidding process which include right-of-way acquisition, imposition of temporary restraining orders by overly active courts, and appeals by losing bidders which are entertained by government.

The effective remedy to such concerns is to strengthen our PPP and procurement framework through further refinements of the processes of the various implementing agencies and the amendment of the BOT Law earlier mentioned.

Stability in policy is also important in ensuring adequate electricity supply and price competitiveness. We maintain our position that opening up the Electric Power Industry Reform Act to amendments will result in regulatory uncertainty that may cause the deferment or cancellation of power sector investments.

EPIRA aims to privatize the power industry, foster competition, and bring down power prices. The first goal has been achieved, but the critical bridge between the first and the third goal is missing. Thus, what is needed to solve our energy supply and pricing woes is the full and proper implementation of EPIRA.

Besides this, investments in more base load and peaking plants must be encouraged by formulating a clear energy security and price competitiveness roadmap with specific targets and timelines—the business community is still looking for such a genuine roadmap.

Just as an aside: You may be aware that we are facing a potential gap in power supply over the next few months. There is a continuing drive for more participants in the Interruptible Load Program being implemented by Meralco, as well as the Retail Electricity Suppliers Association. I encourage corporations with substantial self-generating facilities to sign-up in this program, as well as for government to support this with a well-designed and highly practical energy conservation program.

I believe the Department of Energy has already started a communications campaign on these energy conservation tips, and I hope that this will continue and gain more traction in the weeks to come.

In terms of other critical job generating sectors, we note that agriculture continues to perform below its potential. A third of our workforce is employed in agriculture, therefore it is imperative that roadmaps for specific agriculture subsectors be formulated and immediately implemented.

Possible models to follow are the roadmaps of the Department of Trade and Industry for certain manufacturing industries. In addition, these roadmaps must be supported by adequate investments that will focus on increasing the productivity and welfare of both our farmers and fisherfolk.

As a final point and challenge, in an opinion article I wrote for the Inquirer last January, I mentioned that what is perhaps the most critical test for this administration in terms of preserving its gains is the choice of the presidential candidate who will continue the good governance and development agenda, who will enjoy the endorsement of what I still believe is a respected and popular president, and who will have the support of the administration’s political party and machinery.

That challenge remains and is something that cannot be taken lightly.

We have already had previous experience where an incumbent president was unable to gather a consensus among his allies for a winnable and worthy successor and the result was ultimately more than a decade of lost opportunities for our country.

We must not let this come to pass again. I am sure that everyone in this room wants the Philippines to break away from our tendency to take two steps forward and three steps backward, and that effort to unchain ourselves from that trend must start right now.

Ladies and gentlemen, these are just a few of the unfinished priorities that the business community believes will greatly assist us in our shared goal of inclusive growth through job generation, poverty reduction, and global competitiveness.

The country is facing a great test brought about by the Mamasapano incident.

Nevertheless, this brings with it a choice that we must collectively make as a nation: to unite and work together towards our common aspiration of a progressive Philippines, with peace reigning in the conflict areas in the South, with institutions that are strong and politically mature, and with an inclusive economy that gives every Filipino a fair shot at improving his or her lot in life.

Four Arangkada Forums have already been held. It will definitely be a shame if we enter the fifth Arangkada Forum and a large number of these recommendations, which have garnered the consensus of almost all the major business groups in the country, remain unimplemented.

The time to vigorously pursue these reforms is now and we in the Philippine Business Groups and Joint Foreign Chambers are ready and willing to work more closely with government during the endgame phase of this administration.

Thank you very much, good morning once again, and mabuhay tayong lahat!


Chief News Editor: Sol Jose Vanzi

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