Wednesday, August 25, 2010

PNoy Submits 2011 Proposed P1.645T Reform Budget to Congress

Speaker Feliciano Belmonte, Jr. formally receives President Benigno "Noynoy" Aquino III government's proposed 2011 P1.645T reform budget from Budget Secretary Florencio Abad in a simple turnover at the Speaker's office on March 24, 2010. Subsequently, the Speaker turned over the voluminous documents to House appropriations Chairman Joseph Emilio Abaya who vowed to work hard to pass the national budget before the year ends to avoid a reenacted budget. Witnessing the transmittal of the 2011 proposed General Appropriations act are Reps. Pangalian Balindong, Anna York Bondoc, Oscar Malapitan, Roberto Puno, Josephine Lacson-Noel, Gilbert Violago, Josefina Joson, Dakila Carlo Cua, Jocelyn Sy-Limkaichong, Thelma Almario, Zenaida Angping, Arturo Robes, Narciso Bravo, Nur Jaafar, Tomas Osmena and Edgar San Luis, among others (Source: http://www.dbm.gov.ph/index.php?pid=3&nid=2065).

DBM Press Release, Wednesday, August 25, 2010

President Benigno Simeon “Noynoy” C. Aquino III yesterday submitted to Congress the proposed National Budget of P1.645 trillion for 2011: the “Reform Budget,” which mirrors his commitment to lift the nation from poverty through honest and effective governance.

On behalf of the President, DBM Secretary Florencio B. Abad on August 24, 2010 delivered the 2011 Budget of Expenditures and Sources of Financing and details of the spending plan to House Speaker Feliciano Belmonte, ahead of the constitutionally set deadline of August 25.

In his budget message, President Aquino stressed that the spending plan was crafted after a thorough review of the government’s programs and projects, and after he and the Cabinet have arrived at priorities to address critical gaps in social services for the poorest of the poor.

“The 2011 National Budget focuses funds where they are most needed and where these will yield the most benefits. We have redesigned the budget to ensure that every centavo will be put to good use,” he said, noting that the budgetary increase from 2010 is a meager 6.8%.

The President said that the 2011 budget is anchored on these basic governance principles: transparency and accountability to make government productive; bias in allocating resources for the poor and the vulnerable; fiscal responsibility to reduce debt; public-private partnerships to spur growth despite lack of funds; and zero-based budgeting to prioritize activities with impact.

Secretary Abad pointed out that P1.645 trillion, which represents 18.2% of gross domestic product (GDP), is a prudent level consistent with these governance principles the President set. He said a conservative 5% GDP growth rate is assumed even as government targets 7 to 8% growth.

He said the budget deficit is expected to be reduced by 10.8% to P290 billion, or 3.2% of GDP as against 3.9% in 2010. This is in line with the goal to significantly reduce not only the budget deficit but also the public debt.

“It would seem that we are reducing the size of the government, but what we are doing is to make government more relevant and responsive to the people,” he said.

“Through the zero-based budgeting system, we were able to focus allocations on programs that are really intended to lift the lives and empower the poor. We are trimming the fat by phasing down programs where we think government has no business in doing or is bad at doing, including subsidy programs which apparently benefitted the rich instead of the poor,” the Budget Chief said.

He explained that consistent with the goal to ensure ample education, public health, social protection, housing and land distribution for the poor, spending on the social services sector receives a significant share of P560.8 billion (34.1%) of the budget. Shares of other sectors are: debt burden (22.6%), economic services (22%), general public services (16.6%) and defense (4.7%)

For instance, the budget of the Department of Education (DepEd), which continues to receive the highest budgetary allocation among all agencies, increases by 18.4% or P32.3 billion to P207.3 billion (12.6% of total budget). The increase—the largest in over a decade—is attributed to the construction of 13,147 classrooms and the creation of 10,000 teaching positions, among others.

Meanwhile, the budget of the Department of Social Welfare and Development increased by 122.7% to P34.3 billion, primarily due to the increased provision for Conditional Cash Transfer (CCT) to benefit 2.3 million households by the end of 2011.

Relative to this, reforms in other subsidies were made: the DepEd’s food-for-school program was transferred to DSWD as it can better target beneficiaries; the Department of Agriculture’s input subsidies was reduced as it was found to have benefitted the rich; and the Kalayaan Barangay Program was eliminated as it is no longer effective. Savings were instead directed to the CCT, the DepEd scholarship program and the National Health Insurance Program.

Aside from these reform-oriented decisions, other public finance reform measures were put in place in the 2011 budget. For one, some Special Purpose Funds have been gradually transferred back to the departments while others have been deactivated.

Also, support for government operated and controlled corporations (GOCCs) has been reduced significantly to P23.3 billion (to 1.4% of the budget from 2.6% in 2010). This, while national government support to programs of problematic GOCCs like the National Food Administration, the Light Rail Transit and Metro Rail Transit Corporations, etc. are being studied.

Responsible and prudent expenditure policies were also put in place in the 2011 proposed budget, such as: no creation of new positions except population-related positions such as teachers, uniformed and medical personnel; rationalization of allowances; a more limited increase for utilities, communications and supplies; no new building construction to prioritize completing construction; no acquisition of motor vehicles, among others.

“This 2011 Reform Budget shows how President Aquino intends to pursue the fight he started during the campaign: Kung walang corrupt, walang mahirap (There is no poverty if corruption is eliminated),” Abad stressed.

(Source: http://www.dbm.gov.ph/index.php?pid=3&nid=2065)

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