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The Philippines is facing many challenges, the most serious of which are poverty, climate change, health and education, and unemployment. The budget is the most powerful instrument of the government in responding to these problems. It can be an instrument for the redistribution of income groups to fund services and create jobs for the poor. The budget can be used to provide education and health services, as well as training and capacity building and fund projects to create employment. The budget can be used to stabilize the economy and control inflation.
The need to ask questions on the analysis of the government on the performance of the economy, its policies, thrusts and priorities The need to ask questions on what is explicitly stated, and also the more implicit or what is not there The need to engage the executive on longstanding issues on citizens participation, special purpose funds, etc. The need to demand accountability from the government
Allocation function Distribution function Stabilization function To these three functions, I add the Development function
Macroeconomic Assumptions
PARAMETERS 2012 Actual 2013 Adjusted 2014 Projected
Real GNI Growth % Real GDP Growth % Inflation % 364-Day T-bill Rate % FOREX (P/US $) Unemployment Rate %
5.9 6.9 6.0 7.0 3.0 5.0 1.0 3.0 41.0 - 43.0 6.8
6.2-7.2 6.5 7.5 3.0 5.0 2.0 4.0 41.0 43.0 6.7
If attainable, will projected GDP and GNI growth rates beget job creation?
Source: DBM BESF based on BSP, NEDA, NSCB data
Q3
Q4
FY
Q1
Supply side
1.1
0.6
4.4
4.9
2.8
3.3
Demand side
Source: National Accounts of the Philippines, National Statistical Coordination Board (NSCB)
Palay
Corn Coconut/copra
-1.1
5.4 5.7
10.2
1.6 1.5
5.9
9.5 -1.7
8.0
6.3 3.9
4.5
11.4 0.3
Sugarcane Banana
-6.5 2.0
18.4 -3.0
59.7 0.7
-8.7 0.7
3.1 -6.2
Mango
Pineapple Coffee Cassava
-6.0
5.9 8.9 -2.7
3.4
11.2 -3.1 -0.3
-4.9
3.2 -5.7 5.1 7.5
-1.6
7.1 -0.8 -0.7 4.6
4.4
5.8 -10.8 0.1 -0.2
Annual
2011 2012 1.8 7.0 4.7 -9.8 6.8 2.2 5.4 15.7
2013
Q1 10.9 -17.0 9.7 32.5
8.5
3.4
0.6
5.1
0.1
4.5
8.2
1.9
6.1
8.0
Other Services
10.4
5.8
5.6
7.7
7.6
Household CFE
Govt CFE Construction Durable Equipment Breeding Stock & Orchard Dev't Intellectual Property Products Exports of Goods Exports of Services Imports of Goods Imports of Services
6.9
21.3 -1.2 4.5 1.3 31.7
6.2
9.5 30.4 14.1 1.0 31.4
6.3
1.0 -6.2 5.2 -0.3 11.8
6.1
11.8 13.7 5.7 1.4 16.9
5.1
13.2 33.7 9.4 2.0 10.4
2012
Q1 Construction Public Private -1.2 60.9 -9.7 Q4 30.4 16.2 35.2
Annual
2011 -6.2 -31.8 4.5 2012 13.7 32.4 8.6
2013
Q1 33.7 45.6 30.7
If we want the national budget to tackle problems of poverty, hunger and unemployment, it has to focus on the sectors where the poorest are and where unemployment is highest. While the GDP for the first quarter of the year is impressive and well within the macroeconomic assumptions, the distribution of such GDP deserves a closer look. The 2014 budget should address the gaps and distributional issues of the GDP to ensure that economic growth is enjoyed by all.
Poverty
SWS: On average, 5 out of 10 Filipinos consider themselves as poor (Q2 2013) NSCB: 2 out of 10 (22%) Filipino families are poor (NSCB Refined Poverty, 2012)
Source: Social Weather Stations, accessed at <http://www.sws.org.ph> on August 5, 2013
Hunger
Number of Filipinos suffering from hunger is on the rise despite robust growth
Source: Social Weather Stations, accessed at <http://www.sws.org.ph> on August 18, 2013
Unemployment
6%
FOURTH
FIFTH SIXTH SEVENTH 8TH TO 10TH EIGHTH NINTH TENTH
5.2
6.2 7.6 9.5 61.4 12.1
5.4
6.3 7.7 9.4 60.4 11.9 16.1 32.4
5.4
6.4 7.7 9.4 60.0 12.0 16.0 32.0
0.2
0.1 0.1 (0.1) (1.0) (0.2) (0.4) (0.3)
0.0
0.1 0.0 0.0 (0.3) 0.2 (0.1) (0.4)
50%
16.6 32.7
Total income of Top 20% is approx 8 times of total income of Bottom 20%
INCOME DECILE 1st Sem 2006 1st Sem 2009 1st Sem 2012 PERCENTAGE POINT CHANGE 1st Sem 2006-2009 1st Sem 2009-2012
5.97
5.45
5.50
(0.52)
0.05
8.21
7.44
7.50
(0.77)
0.06
8 times
13.12 12.06 12.07 (1.05) 0.01
While growth is expected in 2013 and 2014, risks and challenges remain. Social picture gives much cause for concern. Poverty, hunger and unemployment remain intractable problems. The national budget is a powerful tool to address these problems. Government and expenditure policies, if used to finance appropriate programs and projects to address these economic and social threats, can be a powerful tool for improving peoples lives.
Fiscal Program
PARTICULARS
Levels in Billion Pesos Revenues Disbursements Surplus/(Deficit) Obligation Budget Per cent of GDP Revenues Disbursements Surplus/(Deficit) Obligation Budget
2012 Actual
1,534.9 1,777.8 (242.8) 1,816.0 14.5 16.8 (2.3) 17.0 12.9 14.1 (19.0) 14.9 10,673.9 14.0** 86.0** 50.2***
2013 Adjusted
1,745.9 1,983.9 (238.0) 2,005.9 14.7 16.7 (2.0) 16.9 13.7 11.6 (1.1) 10.5 11,899.3 14.0 86.0 48.0
2014 Proposed
2,018.1 2,284.3 (266.2) 2,268.0 16.1 18.1 (2.0) 17.0 15.6 15.1 (11.9) 13.1 13,307.3 19.0 81.0 46.2
Notes: *A positive growth rate indicates an improvement in the fiscal balance **Actual as of Nov 2012 ***Actual as of Oct 2012 Source: DBM NBM116 & BESF 2014 based on DBM, DOF, and NEDA data
Revenue Program
Sources of Revenue
Amount (in million pesos) 2012 Tax Revenues Non-tax Revenues Privatization Total 1,361,073 165,511 8,348 1,534,932 2013 1,607,870 135,987 2,000 1,745,857 2014 1,879,918 136,133 2,000 2,018,051 Growth rate (%) 2012-2013 18.13 (17.84) (76.04) 13.74 2013-2014 16.92 0.11 0.0 15.59
a/ Based on actual data reported in the Cash Operations Report (COR) Source: FY 2014 BESF, primarily from the Bureau of the Treasury
Debt trap. While government is planning to borrow a total of P715.041 Billion, it will only receive P274.110 Billion for both peso and foreign borrowings due to costs of borrowing and other charges.
Debt Servicing in the P2.268 T budget does not reflect Principal Amortization
NG Debt Service Expenditures (in million pesos) Interest Payments Domestic Foreign Principal Amortization 2012 312,800 201,215 115,585 416,974 2013 332,209 227,613 104,597 435,185 2014 352,652 248,396 104,256 440,931
Domestic
Foreign GRAND TOTAL
330,401
86,573 729,774
327,403
107,782 767,394
350,937
89,994 793,583
Expenditure Program
Comparative Figures of 2012 and 2013 General Appropriations and the 2014 proposed budget (in Billion pesos)*
* Section 1 of the draft General Appropriations Act clearly appropriates only PhP1,471,970,825,000 and does not include the PhP139,903,759 unprogrammed funds. Which is the correct number for the "New General Appropriations"? PhP1.612 trillion as claimed by NEP or PhP1.472 trillion as provided for in the draft General Appropriations Act?
Sources: General Appropriations Act 2012 & 2013; National Expenditure Program (NEP): DBM, 2014; and BESF: DBM, 2014
Allocation by Sector
Note: Net Lending amounts to PhP27.42B in 2012, PhP26.5B in 2013 and PhP24.95B for 2014. This is equivalent to percentage distribution of 1.5%, 1.32% and 1.1% in expenditure program by sector respectively. Source: Budget of Expenditure and Sources of Financing: DBM, 20112-2014
Allocation by Region
Lanao del Sur - 68.9% Apayao - 59.8% Eastern Samar 59.4% Maguindanao - 57.8% Zamboanga del Norte - 50.3% Davao Oriental - 48% Ifugao - 47.5% Sarangani - 46.5% Negros Oriental 45.3%
Masbate - 44.2% North Cotabato - 43.9% Northern Samar 43.7% Bukidnon - 43.3% Lanao del Norte 42.5% Sultan Kudarat - 41.6% Cotabato City - 41.5%
Luzon getting the biggest share in the regionalized portion of the national budget has long been a debate, questioning government intervention in addressing poverty especially in Visayas and Mindanao.
Source: Social Weather Stations, accessed at <http://www.sws.org.ph> on April 27 & August 5, 2013
Province Apayao Bukidnon Cotabato City Eastern Samar Ifugao Lanao del Sur Manguindanao North Cotabato
While the chart shows that the hungry are in Balanced Luzon & NCR for the second quarter, the highest incidence of hunger for the first semester still points to Mindanao with 23.1%. Mindanao has averaged 26.3% hunger incidence the previous year, has peaked 30.3% during the third quarter of 2012 and holds the highest average hunger of 16.8% for the past 15 years.
Source: Social Weather Stations, accessed at <http://www.sws.org.ph> on August 18, 2013
DOTC
SUCs DENR DAR DFA
33,242,378
22,097,645
8
9
34,185,121
32,770,703
8
9
45,161,306
34,650,625
8
9
Budgets for Departments/Agencies account for around one-half of the budget. Source: GAA 2012 & 2013; NEP & BESF: DBM, 2014
Budgetary Support to Government Corporations Allocation to Local Government Units Calamity Fund Contingent Fund DepEd School Building Program E-Government Fund
2,683,248,000
109,296,738,000 34,437,891,000
2,636,723,000
69,089,206,000 98,715,143,000
4,815,644,000
80,713,614,000 120,495,952,000
Source: GAA 2012 & 2013; National Expenditure Program: DBM, 2014
24,890,000,000
24,790,000,000
25,240,000,000
1,764,300,000
400,000,000
223,452,270,000
267,925,024,000
310,047,901,0003
The PhP22.4 Billion Priority Social and Economic Projects Fund proposed in the 2013 National Expenditure Program was later realigned to concerned agencies as a result of the campaign of ABI for the 2013 Budget. 2 Tax Expenditures Fund of PhP26.9 Billion was NOT a budget item appropriated in the 2013 GAA but placed under the SPFs for 2013. However, this was only indicated in the 2014 Proposed Budget. 3 Inclusive of PhP2.072 Million Retirement and Life Insurance Premium Source: GAA 2012 & 2013; National Expenditure Program: DBM, 2014
25,214,549,000
16,826,406,000
36,268,000
1,224,790,000 1,000,000,000
2,226,655,000 1,000,000,000
16,124,491,000 1,000,000,000
26,000,000,000
23,000,000,000
56,349,000,000
14,200,000,000 85,182,506,000
60,363,130,000
25,000,000,000
Source: GAA 2012 & 2013; National Expenditure Program: DBM, 2014
10,632,180,000
10,894,000,000
30,000,000,000
3,000,000,000
152,821,845,000
500,000,000 117,548,371,000
500,000,000 139,903,759,000*
Details of the proposed amount for Unprogrammed Fund (UF) are not completely disclosed in 2014 National Expenditure Program. Special provisions would only identify Debt Management Program, Recording of Relent Loans and Risk Management Program. The complete listing of line items are instead indicated in the Details of Selected Programs/Projects for 2014.
*
Source: GAA 2012 & 2013; National Expenditure Program: DBM, 2014
c. pooled savings for 2007- Ph106.11 billion (net of transfer from one agency to another and from one Special Purpose Fund to another cannot be verified due to lack of supporting documents
DBM refrain from transferring one lumpsum fund/special purpose fund (SPF) to another, or utilizing the appropriation of one Fund for purposes of another Fund, otherwise, the intentions of the appropriation law would be circumvented.
the issues raised on lump sum appropriations, specially special purpose funds remain the same these lump sum appropriations are more vulnerable considering the huge amounts involved the practices identified in 2008 have not changed at all
More Transparency!
There is a need for the public to scrutinize the other side of the budget: the Special Purpose Funds and Unprogrammed Funds.
Commissioned by DSWD and with support from the World Bank and AusAid No overall increase in per capita consumption among HH beneficiaries. The estimated per capita consumption per day was P46 in both program and non-program barangays Contrary to the design of the program in which the maximum benefit amount beneficiary HHs could receive is 23% of poor HHs per capita income, in reality the beneficiaries are receiving considerably smaller amounts (an average of P1,740 for the last bimonthly payment). Although Pantawid areas seemed to have higher estimated per capita incomes and lower poverty rates in 2011 compared to non-Pantawid areas, these differences were not significant . No significant evidence of lowered poverty rates among HH beneficiaries 51
1.
The first world boasting of a 7.8 % GDP growth and considered the fastest growing economy in Asia
2.
and the other world suffering from disasters, serious problems of hunger and rising criminality, etc.
We in public administration are challenged to bridge the gap between these two worlds by using the budget as an instrumentality for reforms and not for partisan political gain.