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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
Budget is an instrument of fiscal policy which includes policies on revenues, expenditures and borrowing The Budget as part of fiscal policy has three functions:
Allocation function Distribution function Stabilization function To these three functions, I add the Development function
Macroeconomic Assumptions
PARAMETERS
Real
GNI
Growth
%
Real
GDP
Growth
%
Ina3on
%
364-Day
T-bill
Rate
%
FOREX
(P/US
$)
Unemployment
Rate
%
2012
Actual
6.5
6.8
3.2
2.0
42.25
7.0
2013
Adjusted
5.9
6.9
6.0
7.0
3.0
5.0
1.0
3.0
41.0
-
43.0
6.8
2014
Projected
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
2012 (Actual)
Q2 0.6 Q3 4.4 Q4 4.9 FY 2.8
2013
Q1* 3.1 Q2 -0.3
*Revised Source: National Accounts of the Philippines, National Statistical Coordination Board (NSCB)
14.2 3.3
15.0 4.6
-4.3
-0.4
5.8
1.9
6.1
8.3
5.9
7.0
*Revised Other Services 5.6 7.7 Source: National Accounts of the Philippines, NSCB
5.3
7.4
6.4
Annual 201 1 Constructio n Public Private -6.2 -31.8 4.5 2012 Q1*
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
1ST TO 3RD FIRST SECOND THIRD 4TH TO 7TH FOURTH FIFTH SIXTH SEVENTH 8TH TO 10TH EIGHTH NINTH TENTH
6%
2.5 3.5 4.3 28.5 5.2 6.2 7.6 9.5 61.4 12.1
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
Ratio of Top 30% over Bottom 30% Ratio of Top 20% over Bottom 20% Ratio of Top 10% over Bottom 10%
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 Growth Rate Revenues Disbursements Surplus/(Deficit)* Obligation Budget GDP (DBCC-Approved as of Feb. 15) Deficit Financing Mix (%) Foreign Domestic Debt to GDP Ratio (%)
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 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
Sources of Tax Revenues, FY 2014 Amount (in million pesos) Net Income Taxes Tax on Property Taxes on Domestic Goods and Services Taxes in International Trade and Transactions Total
*Includes new measure for BIR Sin Tax Reforms 2012 Source: FY 2014 BESF, primarily from the Department of Finance
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 Domestic Foreign GRAND TOTAL 2012 312,800 201,215 115,585 416,974 330,401 86,573 729,774 2013 332,209 227,613 104,597 435,185 327,403 107,782 767,394 2014 352,652 248,396 104,256 440,931 350,937 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 PhP139,903,759,000 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 Apayao Eastern Samar Maguindana o Zamboanga del Norte Davao Oriental Ifugao Sarangani Negros Oriental
68.9 Mindanao 59.8 Luzon 59.4 Visayas 57.8 Mindanao 50.3 Mindanao 48 Mindanao 47.5 Luzon 46.5 Mindanao 45.3 Visayas
Masbate North Cotabato Northern Samar Bukidnon Lanao del Norte Sultan Kudarat Cotabato City
44.2 Luzon 43.9 Mindanao 43.7 Visayas 43.3 Mindanao 42.5 Mindanao 41.6 Mindanao 41.5 Mindanao
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 International Commitments Fund Miscellaneous Personnel Benefits Fund Pension and Gratuity Fund (formerly Retirement Benefits Fund)
Source: GAA 2012 & 2013; National Expenditure Program: DBM, 2014
Priority Development Assistance Fund PAMANA Fund Priority Social and Economic Projects Fund1 Feasibility Studies Fund Tax Expenditures Fund2 TOTAL
1
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
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
GAA 2012 333,107,000,000 273,309,592,000 9,969,209,000 331,000 1,094,084,000 33,043,000,000 23,000,000,000 23,270,917,000 26,834,442,000
723,628,575,000
GAA 2013 333,902,000,000 302,304,001,000 15,518,556,000 331,000 545,844,000 26,900,000,000 26,500,000,000 28,125,611,000 2,182,808,000 19,240,064,000
755,219,215,000
2014 Proposed 352,652,000,000 341,545,000,000 26,900,000,000 24,950,000,000 28.9 billion 21.1 billion
796,047,000,000
Source: GAA 2012 & 2013; National Expenditure Program: DBM, 2014
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.
issues raised on lump sum appropriations, specially special purpose funds remain the same lump sum appropriations are more vulnerable considering the huge amounts involved practices identified in 2008 have not changed at all
these
the
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 50
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.