Wednesday, 10 February 2010

GMA signs P1.54-trillion budget

Education, public works receive lion’s share
By GENALYN KABILING
Manila Bulletin
http://mb.com.ph/articles/242694/arroyo-signs-p154trillion-budget

CALAMBA, Laguna – President Arroyo has signed into law the proposed P1.54-trillion national budget for the year, with the education sector getting the lion's share.

In Republic Act 9970, the President also approved the P64-billion insertion made by lawmakers but on the condition new revenues should cover such expenditure.

Mrs. Arroyo inked her government's new operating budget for the year without fanfare last Monday but announced the signing of the law only last Tuesday during a visit at Real Elementary School in Calamba, Laguna.

In her budget message, the President hailed the P1.54-trillion spending measure as “culmination of the administration’s commitment to reform and responsible development.”

She said the 2010 national budget also marked “the end of years of hard work and fiscal reforms” but also “the beginning from which the next president can build on the accomplishments of this administration" since it matches scarce resources with growing requirements.”

“I signed the 2010 national budget with vetoes,” she later told reporters aboard bus tour along South Luzon Expressway to C-5 in Quezon City.

Budget Secretary Rolando Andaya Jr., however, explained that the President did not necessarily veto expenditure items but only “special provisions created special accounts or the debt cap.” “When we talk about absolute numbers, the President did not veto anything,” he said.

Andaya said the congressional earmarks worth P64.6 billion would only be released if Congress could identify new revenue measures that can support such spending. Lawmakers earlier imposed P64-billion realignment from debt service to social expenditure in the 2010 budget proposal which has not sit well on the executive branch.

“Applying fiscal discipline, the President decided that these items can only be spent or used when there are new revenue measures or available cash to support the P64 billion-expenditure,” Andaya said in a separate interview with reporters prior to the Cabinet meeting in Novaliches, Quezon City..

If Congress fails to come up with P64-billion revenue measure to cover the expenditure, Andaya said the country's deficit could expand from 3.5 to 4.2 percent of GDP “which is way beyond, way above the tolerable limit of around 3.9 of GDP.”

“At this ratio, the next administration will find it hard to balance the budget. It is also out of courtesy to the next president that we are doing this. We don’t want him to be saddled with a heavy load of unsupportable expenses right at the starting line,” Andaya said.

He said the President wants to keep the deficit level to around 3.5 percent to 3.6 percent of GDP.

Andaya said the 2010 national budget, which is 8 percent or P115 billion higher than last year’s P1.426 trillion budget, seeks to balance social responsibility with fiscal responsibility.” He acknowledged such level could prompt a deficit of P233.4 billion “but still within the manageable range of 2.8 percent of the GDP.”

“In this budget, we are saying that we will not break our vow to ramp up social spending, but in doing so we will not be breaking the bank,” he said.

By agency, the biggest recipient of this year’s budget is the Department of Education (DepEd) with a budget of P174. 9 billion.

Next is the Department of Public Works and Highways (DPWH) with P135.6 billion, followed by the Department of the Interior and Local Government (DILG) with P66.45 billion, and the Department of National Defense (DND), P57.84 billion. To sustain food security programs, the Department of Agriculture (DA) is fifth in the list of top recipients, with a budget of P41.17 billion.

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