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SOURCE: Press and Public Affairs Bureau

House OKs 2010 Reform Budget on 2nd Reading
16 October 2010 09:02:18 AM

After a record ten session days of grueling marathon plenary debates, the House of Representatives passed on second reading the President's proposed 2011 P1.645-trillion "reform" budget.

"We lost sleep, but kept our word," Speaker Feliciano Belmonte, Jr. proudly declared at 3:00 a.m. Saturday.

The top ten departments receiving the biggest allocation in the proposed budget are: Department of Education (including Educational Facilities Fund), P207.3B; Department of Public Works and Highways, P110.6B; Department of National Defense (including Pension and AFPMP), P104.7B; Department of the Interior and Local Government (including pension), P88.2B; Department of Agriculture, P37.7B; Department of Social Welfare and Development, P34.3B; Department of Health - P33.3B; Department of Transportation and Communications, P32.3B; Department of Agrarian Reform, P16.7B; and the Judiciary, P14.3B.

Rough sail

Since its presentation to Congress on September 1st, the proposed budget faced tough public scrutiny.

First to protest was the Judiciary which decried its appropriation of P14.3B, P9B lower than what it requested from the DBM.

Some lawmakers also opposed the proposed allocation of P400M for contraceptives under the family health programs of the DOH budget. They argued the appropriation pre-empts Congressional action on the proposed reproductive health bill.

But the most ticklish issue that dragged plenary debates for days was the proposed direct subsidies of P29.2 billion for the Pantawid Pamilyang Pilipino Program (4Ps) under the DSWD budget. The 4Ps aims to provide conditional cash transfers amounting to P21.2B to 2.3M extremely poor households. Former President Arroyo, now Representative of the 2nd district of Pampanga, opposed the increased subsidies which were ironically initiated during her term, arguing the absorptive capacity for the program was presently low.

"The scrutiny of the budget was meticulous, down to the smallest but important detail. But the statesmanship of our legislators prevailed over partisan interests, that's why we passed the proposed budget, great stumbling blocks notwithstanding," the Speaker explained.

Macro-economic assumptions

The proposed P1.645 trillion budget represents 18.2 percent of the projected Gross Domestic Product (GDP) for 2011. The government projects a 5 percent GDP growth rate for next year.

The budget includes programmed new appropriations of P933.5B and P711.5B of automatic appropriations. The latter, the Department of Budget and Management (DBM) pointed out, includes debt service and interest payments of P357.1B; net lending of P15.0B; Internal Revenue Allotment (IRA) of P286.9B; and government contribution for employees' retirement and life insurance premiums of P22.4B. Other automatic appropriations are the special accounts in the general fund, grant proceeds and donations.

The government expects to generate P1.41 trillion revenues, P1.27 trillion or 90 percent comprising of taxes. The remaining P137.2B will be derived from non-tax sources such as fees and charges, income and foreign grants.

DBM predicted that deficit for 2011 will ease to P290B or 3.2 percent of GDP, lower than the 2010 budget deficit of P325B. The deficit will be financed by P257.3B of domestic borrowings and P49.5-B of foreign borrowings.

Swift approval

The Speaker expressed pleasure and deep gratitude to the members of Congress for their swift action on the President's proposed budget. "Every member - from the sponsors to interpellators - toiled through late nights, sometimes into the early mornings, to scrutinize the budget," the Speaker said.

Calling the budget "pivotal" in fulfilling the new government's fight against corruption and poverty, the Speaker appealed to the Senate to "act as swiftly" so that both Houses of Congress could ratify the budget measure before the December break.