MANILA, JULY 31, 2008 (STAR) By Paolo Romero - Malacañang is eyeing a P1.4-trillion national budget next year with frontline departments as well as agencies that are performing well getting significant allocations, officials said yesterday.

Socioeconomic Planning Secretary Ralph Recto and Cabinet Secretary Silvestre Bello III in separate interviews said the outlines of the proposed budget were the main agenda of the Cabinet meeting held in a private resort owned by Budget Secretary Rolando Andaya Jr. in Mabini, Batangas, a day after President Arroyo delivered her 8th State of the Nation Address (SONA).

It was also the first Cabinet meeting of Recto as chief of the National Economic and Development Authority and Bello as Secretary to the Cabinet. The meeting was held behind closed doors and the officials gave their interviews after meeting.

The next budget is about P170 billion or about 15 percent higher than the current P1.227-trillion General Appropriations Act (GAA).

Recto said the increase more or less reflected the inflation rate and the Arroyo administration requirements to spend more for infrastructure, social services and other growth inducing programs.

Bello said the Presidential Legislative Liaison Office is already coordinating with lawmakers to speed up approval of the budget by Congress, hopefully before the end of the year.

The executive department is required to submit its proposed budget for the following year 30 days after the President’s SONA.

He said the budget would be needed to provide the President the necessary funds to comply with her commitments in her SONA.

Among the administration’s commitments is the construction of more airports, ports, including those for Roll-on, Roll-off vessels, farm-to-market roads, irrigation facilities, hospitals and school buildings.

Bello and Recto said the departments of education; agriculture, public works and highways, and the Philippine Health Insurance are among the top recipients.

“These are initial allocations that will be fine-tuned as the budgeting process moves,” Bello said.

He said the Department of Public Works and Highways is also among the agencies that will be receiving one of the biggest increases in allocations compared to the previous years.

“Basically the budget will depend on the performance of the department in terms of implementing their projects,” Bello said. “It will be performance-based budgeting.”

He said the Department of Budget and Management would schedule the releases of their allocations based on the agencies’ performance.

Recto said the assumptions for the budget – which include inflation, exchange rate, and growth – have yet to be finalized.

Recto, however, said the planned budget would be benchmarked to the 2007 GAA.

He explained that in 2007, the country experienced its highest growth rate in the last 50 years.

Recto said the Arroyo administration wants to sustain the growth momentum despite the battering the country is receiving from the global food and oil crises.

“Of course we want the highest possible growth and the reason for that is simple – the faster you grow, the more jobs you create and the less poor there should be. But of course we live in a different environment today, you have high oil prices, you have inflation up there and that will also affect our ability to raise revenues,” he said.

“At the same time, we are looking as well at the possible deficit for 2009. If we are prepared to go on deficit spending, it should probably be a ballpark figure, of maybe P40 billion which is roughly half a percent of Gross Domestic Product,” he said.

When asked whether the government would try to balance the budget next year, he said: “It’s hard to say.”

“I think that we might be better off with a little deficit. But we prepare for the consequences of a deficit, we will be borrowing money,” Recto said.

He said under the Medium Term Philippine Development Plan, the target is to achieve a balanced budget by 2010 by reducing the deficit equivalent to one percent of the GDP this year to half a percent next year and wiping it out by 2010.

Recto said the government would not be passing any new revenue measures to fund the budget next year although it would be better if Congress approved the long-pending rationalization of fiscal incentives bill.

Mrs. Arroyo earlier said the bill could generate as much as P5 billion in revenues.

Palace: Text rate cut to be extended By Marvin Sy Thursday, July 31, 2008

The country’s three major telecommunications companies have committed to extend the reduced text messaging rate promotion beyond the three months approved by the National Telecommunications Commission (NTC).

Executive Secretary Eduardo Ermita presented to media the statements of Smart Communications Inc., Globe Telecom Inc. and Sun Cellular, all of which indicated support for an extension of the promotion period.

Last Monday, the three companies cut the rate of text messaging between different carriers from P1 to 50 centavos.

President Arroyo made the announcement during her State of the Nation Address, but the NTC was quick to clarify that the rate cut was only for three months and was being carried out as a promotion by the three companies.

Consumers have responded positively to the rate cut and called on the three firms to make it permanent.

In a statement, Smart Communications public affairs head Ramon Isberto said the company supports the government’s efforts to cushion the impact of rising prices, noting that the move of the company to cut its rate was in line with these efforts.

“We are committed to extending the effectivity of this offer, subject to the approval of the NTC,” Isberto said.

Globe Telecom Inc., through its regulatory affairs head Froilan Castelo, said that the company is one with the government’s program to ease the plight of the Filipinos in this time of rising prices.

“We hope that our offer as mentioned by the President in her State of the Nation Address will be of help. In this regard, we may extend the duration of the promo with the approval of the NTC,” Castelo said.

Sun Cellular senior vice president for legal services William Pamintuan said that subscribers received the firm’s promo warmly, based on the upsurge of inquiries regarding the offer.

Pamintuan said that early indications suggest that subscribers find great value in the promo.

The company informed the NTC that it is committed to continue the promo beyond the approved period.

“We stand by our corporate precepts of offering the best value for money products and services to the Filipino consumers,” Pamintuan said.

Press Secretary Jesus Dureza said the rate cut promo was made while the NTC was still deliberating on the proposal to reduce one of the components of the text messaging rates of the telecom firms.

Dureza explained that the cost of a single text message within the same carrier is just 12 centavos.

The privilege of crossing over to other carriers costs 35 centavos per text and this, coupled with the other costs, brings the total cost to P1 per message sent.

Dureza said that the NTC issued a memorandum to the telecom firms asking them to bring down the 35-centavo fee to somewhere around 15 centavos per text.

Dureza said that the 50 centavos reduction announced last Monday was done voluntarily by the three companies in response to “ moral suasion” of the government.

Chief News Editor: Sol Jose Vanzi

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