CIVIL-society groups have lauded last week’s announcement by the Senate of a P31-billion cut in the Malacañang-proposed P1.053-trillion national budget for 2006 in favor of additional allocations to basic social services, calling such efforts by the legislature’s upper chamber as particularly urgent in these times.

The Freedom from Debt Coalition (FDC), Social Watch Philippines, Global Call to Action Against Poverty (GCAP), Civil Society Network for Education Reforms (E-Net) and Kilusang Mangingisda also called on the senators to stand firm on the re-allocations promoting the country’s development needs in the face of an impending clash with the House of Representatives during the bicameral conference to reconcile differences in their budget versions, and a possible veto of the bill by the Executive.

Malacañang has already asked the Senate to reconsider its proposed budget cuts, which Press Secretary Ignacio Bunye said, may prejudice the government’s crucial grassroots programs meant to “(increase) the fruits of economic reforms flowing down to the poor.”

Affected by the announced cuts in the 2006 budget proposed by the Senate are the:

  • Kilos Asenso Support Fund amounting to P3 billion
  • Kalayaan Barangay Program Fund amounting to P3.69 billion
  • Compensation Adjustment Fund amounting to P13.1 billion
  • P10 billion for the incentive package for employees availing of the Rationalization Program under the Pension and Gratuity Fund
  • entire budget of the Presidential Commission on Good Government worth P65.53 million
  • P2.72 billion of the budget of the Department of Transportation and Communications (DOTC)

In turn, the Senate has proposed an increase in the budgetary allocations to health, education and the Agriculture and Fisheries Modernization Program (AFMP) in the following amounts:

  • additional P350 million to the Department of Health (DOH)
  • additional P100 million to the Commission on Higher Education (CHED)
  • additional P100 million to the University of the Philippines
  • additional P50 million under the AFMP for the Young Farmers Program

FDC shared the Senate’s apprehension that the 2006 national government budget, whose approval has been delayed for six months now, reeks of “dubious allocations meant only to fortify Gloria Macapagal-Arroyo’s political survival. Senators have raised suspicions about the Kalayaan Barangay Program Fund and Kilos Asenso Program Fund being used as pork barrel by Malacañang.

“Purportedly allotted for grassroots development, these are nothing but pork barrel funds for local government units (LGUs) to reward their loyalty and guarantee their support for the smooth operation of Arroyo’s charter change initiative,” said Ana Maria Nemenzo, FDC president.

Allocations to LGUs have in fact increased in the 2006 proposed budget, up from P155 billion last year to P181 billion for this year.

In contrast, the budgetary allocations to basic social services as health and education, the NGOs noted, have been “grossly insufficient and dangerously decreasing” under the Arroyo administration. (Even much earlier, Social Watch Philippines called the 2006 budget as “anti-poor.”) The education sector has suffered a decrease by 27.9 percent in its share in the fiscal pie within the last year. The Arroyo government is spending only 2.4 percent of the GDP (gross domestic product) on education compared to the average of 4.41 percent that countries within the medium human development bracket allocate, according to the United Nations Human Development Report.

The health sector, on the other hand, gets only a measly 0.27 percent of GDP, way below the average public spending of African countries like Nigeria and Ethiopia, which amounts to about two percent.

The share of the agriculture sector in the total expenditures of the government, meanwhile, has not gone beyond five percent. This inadequate government support, FDC said, explains why the sector has grown only by an average of two percent annually.

Prof. Leonor Briones of Social Watch Philippines, however, said that piecemeal re-allocation of certain budget allotments can only do so much. She urged the Senate to also “direct its lenses at other dubious funds which we believe will be used to advance certain political ends rather than developmental needs.”

Briones pointed to unprogrammed appropriations worth P57 billion proposed by Malacañang which constitute funds with no specific program that the Executive can tap should it exceed its revenue targets this year. She said the government is already dipping its hands into these funds, having declared that revenue projections have been met owing to the imposition of the reform value added tax (RVAT).

Also on the FDC watchlist are the Confidential and Intelligence Expenses amounting to P1.25 billion, P650 million of which is under the full discretion of the Office of the President. With the growing number of warrantless arrests, abductions and extra-judicial killings of known critics of the Arroyo government, the civil-society groups are wary that these funds will be used for political repression.

Briones, a former national treasurer who served under the Estrada administration, also said that the trillion-peso national budget should be seen in the proper perspective, saying that the effective budget up for approval is only P734 billion since P723 billion is automatically appropriated to pay for the country’s debt.

“This amount is already equivalent to 80 percent of the target tax revenues for the entire year, including projected collections from RVAT,” said Briones.

The Senate, she said, must confront the country’s growing debt problem as it is the “single biggest obstacle in coming up with a national budget that is geared towards genuine development and poverty reduction.”

In this light, FDC, Social Watch Philippines and the other groups are also challenging the senators to prioritize the approval of Senate Joint Resolution No. 1 caling for a comprehensive audit of public sector debt and contingent liabilities. The said resolution seeks the creation of a congressional commission to review, investigate and recommend policies and strategies to reduce the debt burden and ensure sound debt and fiscal management.

4 Responses to Senate challenged to craft budget for development


INSIDE PCIJ: Stories behind our stories » Impatient for education reforms? Check the education budget first

June 1st, 2006 at 10:35 am

[…] In line with the Senate’s budget cuts in favor of basic social services, he proposes the following additional allocation: […]


Juan Makabayan

June 1st, 2006 at 2:13 pm

“The fall of the house of finance”

“the world is in a financial mess. Worse, Anglo-American economies could be heading for the kind of prolonged period of debt deflation”

“In this light, FDC, Social Watch Philippines and the other groups are also challenging the senators to prioritize the approval of Senate Joint Resolution No. 1 calling for a comprehensive audit of public sector debt and contingent liabilities.”

We may not realise how crucial this Resolution is for the survival of millions of Filipinos, who are hard-pressed by the debt burden, until the inevitable happens, by then it would be too late.


INSIDE PCIJ: Stories behind our stories » The debt burden and Arroyo’s ‘borrowing addiction’

June 3rd, 2006 at 2:55 pm

[…] EVEN as the Senate has slashed billions of pesos in suspected Malacañang pork barrel funds in favor of additional funding for basic social services, the Freedom from Debt Coalition (FDC) thinks such efforts to introduce meaningful reallocations in the proposed 2006 national budget are piecemeal without the legislators seriously confronting the issue of the debt problem. […]


INSIDE PCIJ: Stories behind our stories » Arroyo dared to exercise veto power vs budget cuts

June 7th, 2006 at 7:29 pm

[…] Arroyo announced yesterday that she is considering a veto after the Senate slashed P31 billion in suspected pork barrel funds at her disposal in the lump-sum appropriations for the Kilos Asenso Support Fund amounting to P3 billion and Kalayaan Barangay Program Fund worth P3.69 billion. […]

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