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July 23, 2010
MANILA -– The national government (NG) plans to have a P1.757-trillion budget for 2011, the highest ever budget in Philippine history. Budget and Management Secretary Florencio “Butch” Abad said next year’s revenues are projected to reach P1.46 trillion, resulting to a deficit of P298.6 billion, which is 3.3 percent of the gross domestic product (GDP). Including carry-over fund, or unused expenditure budget from this year, Abad said next year’s disbursement program would reach P1.757 trillion. Next year’s proposed spending program is 14 percent or P216.4 billion higher than this year’s P1.45 trillion budget.
On the other hand, next year’s budget gap is lower than the P325-billion ceiling for this year, which is about 3.9 percent of GDP. Abad said the budget proposal for next year will be submitted to Congress on August 24, 2010. Growth target for 2011 is at a range of seven to eight percent, but Abad pointed out that for budgetary purposes, economic managers use five to eight percent as their growth target for next year. Output gap target this year is between five and six percent. “We’re hoping that after the transition, we will attract more private investments,” the DBM secretary said. Abad said the Department of Education (DepEd) would remain to have the highest budget among government offices, but the Department of Social Welfare and Development (DSWD) would be given a “significant increase” in fund because of the planned realignment in the budget for conditional cash transfer (CCT) program.
The CCT program benefits around one million Filipino families this year. The Budget and Management chief said they want to increase these beneficiaries to 2.3 million families next year. The government allocated P10 billion for this program this year but Abad said they want to almost triple it next year to P29 billion as part of the government’s poverty alleviation program.
Abad said they will also terminate or redesign some existing programs of the government so as not to waste government funds.
The rice-to-school program, for one, has to be redesigned since DepEd is not structured to implement this job because this is more of a job of the DSWD, he said. Abad said they also found out leakages on the supply of rice in the warehouses as well as those that were distributed to the students.
“There are also beneficiaries who shouldn’t be given this benefit because they are not qualified,” he added. Aside from the CCT program, others that would be redesigned or realigned would be the funds for network plans for projects like farm-to-market roads. Abad said “releases must be based on Department of Agriculture’s determination of critical primary and secondary artery roads.” “Roads should be paved, unlike in the present situation since the Philippines is one of the countries with paved roads,” he added. The new administration would also redesign support to bleeding governmentowned and controlled corporations (GOCCs) like the National Food Authority (NFA) as well as the subsidy for the Light Rail Transit (LRT) transport system. Abad said NFA’s debt and accounts payable already reached P177 billion as of end-2009, a far cry from the P45 billion at end-2004.
“It’s huge. It’s like the Napocor (National Power Corporation) of the 20th century,” he said. The Napocor used to have the biggest debt among GOCCs due to the need to take loans for needed power-related infrastructure, but after the government privatized power distribution, the burden of supplying power is not the government’s sole responsibility anymore. Abad said the team formed to study how the new administration would implement and start from zero-based budget (ZBB) is still determining the critical programs and projects to enable the government to keep within its fiscal targets.