2 ‘big elephants’ in 2019 budget — lawmaker

MANILA, Philippines — The Duterte administration will have to allocate funds to “two big elephants” in the 2019 budget: at least P110 billion for the implementation of the Bangsamoro Organic Law (BOL) and P50 billion more for Internal Revenue Allotment (IRA).

The appropriations committee of the House of Representatives will start tomorrow its deliberations on the proposed P3.767-trillion national budget for 2019. President Duterte submitted to Congress the proposed national budget after his State of the Nation Address last Monday.

House Deputy Speaker Rolando Andaya Jr. of Camarines Sur highlighted the need to allocate P110 billion to Muslims in Mindanao following Duterte’s approval of the BOL.

The BOL abolishes the Autonomous Region in Muslim Mindanao, paving the way for the new Bangamoro region that would be composed of the current ARMM region and the provinces of Tawi-Tawi, Sulu, Basilan, Maguindanao and Lanao del Sur.

The Supreme Court (SC) also ruled last July 4 that the national government must allocate prospectively a larger IRA to local government units, which may reach at least P50 billion more.

“It is not that easy to find funds for the two (BOL and IRA). If the fiscal space is tight, it will be a challenge. We have two big elephants in the room,” Andaya said.

Davao City Rep. Karlo Nograles, chair of the appropriations panel, announced that the deliberations for the proposed 2019 national budget will “begin as scheduled” on July 31 amid the change in House leadership last week. 

“As promised under Speaker Gloria Macapagal-Arroyo, the per-agency debates on the national budget for 2019 will start this week,” he said.

Among the first to be scrutinized by Nograles’ panel are the proposed budgets of the Department of Budget and Management (DBM), National Economic and Development Authority, Department of Finance and the Bangko Sentral ng Pilipinas.

Also scheduled to be tackled this week are the proposed budgets of the Philippine Charity Sweepstakes Office, Philippine Amusement and Gaming Corp., Department of Agriculture, National Food Authority, National Irrigation Administration, Philippine Coconut Authority, Fertilizer and Pesticide Authority and Department of Agrarian Reform. 

“The House recognizes the importance of the immediate passage of the national budget and we in the appropriations panel are bent on approving the best possible General Appropriations Act in a timely manner,” Nograles said.

Andaya said the national government needs at least P160 billion to finance the BOL and IRA and this is just a very conservative estimate. 

He said at least P38 billion more must be raised to augment the current P72 billion that the government has allotted to the ARMM to complete the P110 billion needed for BOL’s implementation in the “first year alone.” 

“There’s P32 billion for ARMM for 2019, plus P15 billion lodged with national government agencies and about P25 billion in IRA, then we must look for an additional P38 billion to P40 billion to finance the balance,” Andaya explained. 

“The important thing is to run the final numbers. Because some are saying that perhaps P60 billion more is needed. The DBM will have the final say,” he added.

Andaya also said the SC’s ruling that the share of LGUs should be sourced from “all national taxes and not only national internal revenue taxes,” must be complied with as well.

“The implication of this decision is that we must increase next year’s Internal Revenue Allotment by P120 billion, per one estimate, from the P575.5 billion proposed in the 2019 budget,” he explained. “The total amount to be funded represents all tax collections three years prior under the new formula.”

“The basis is prospective application of the decision. If retroactive, it will exceed P1 trillion,” he added.

The IRA represents the local governments’ 40 percent share from the national taxes collected.

Prior to the SC ruling, only collections of the Bureau of Internal Revenue were reckoned with in the computation, and excluded the Bureau of Customs’ collections. This meant that local governments were denied their share from the VAT and excise taxes paid on fuel and other imported goods. 

President’s office seeks P6.77 billion

The Office of the President (OP) is seeking a P6.77-billion budget for 2019, slightly higher than its P6.03-billion outlay this year.

The OP is proposing a higher budget as it expects to spend more on various items including operations and personnel services. 

The proposed budget for maintenance and other operating expenses (MOOE) is P5.18 billion, higher than the actual budget of P4.66 billion this year.

Interestingly, the proposed travel expenses for next year, which is under MOOE, are P795.8 million, lower than the P884.9-million budget this year.

The OP proposed a P1.25 billion budget each for “confidential expenses” and “intelligence expenses,” the same amount as the actual allocation for the two items this year, both under MOOE. 

The OP is also seeking a P1.08-billion personnel services outlay for 2019, higher than this year’s budget of P1.03 billion.

The proposed capital outlay for 2019, including funds for infrastructure, land, machinery, furniture and transportation equipment, is P511.66 million, up from P370 million this year. 

Diokno: No PDAF, DAP

Meanwhile, Budget Secretary Benjamin Diokno has given assurance of safeguards under present laws that will prevent the repeat of the Priority Development Assistance Fund (PDAF) scam and the controversial Disbursement Acceleration Program (DAP).

“We have the Commission on Audit (COA) and the department secretaries responsible for their own budget,” Diokno said when asked how the Duterte administration would ensure it would not misuse the 2019 national budget.

“There is no more PDAF,” he said.

“The SC nullified all legal provisions of past and present congressional pork barrel laws, such as the previous PDAF and Countrywide Development Fund articles and the various congressional insertions, which authorized legislators – whether individually or collectively organized into committees – to intervene, assume or participate in any of the various post-enactment stages of the budget execution,” he added.

Presidential spokesman Harry Roque Jr. said the Palace is optimistic that Congress will pass the proposed national budget on time.

“Well, this is a test for the new Speaker. Nonetheless, we are confident that because this budget is intended to implement more projects for congressmen and legislators as well, it will be passed on time,” he said.

According to Diokno, social services remain as the administration’s top priority. He said 36.7 percent of the budget will be used to fund social programs, particularly on human capital development, such as education, healthcare and social protection. 

Education continues to get the lion’s share of the 2019 budget, with a total funding of P659.3 billion, a 12.3 percent increase from last year’s P587.1 billion. 

The Pantawid Pamilyang Pilipino Program, National Health Insurance Program, Universal Access to Quality Tertiary Education, Free Irrigation for Farmers, Basic Educational Facilities Program, and Rice Subsidy for Military and Uniformed Personnel will receive a total allocation of P283 billion. 

The funding for the Universal Access to Quality Tertiary Education has also sizeably increased from P40 billion in 2018 to P51 billion in 2019. 

A total of P9.958 billion will be allocated for farm-to-market roads, including repair, rehabilitation and construction.

The major infrastructure investments under the Build, Build, Build program include P25.2 billion for the 35-kilometer Metro Manila Subway Project Phase 1. The project is expected to lessen travel time from Mindanao Avenue to the Food Terminal Inc. in Taguig City by 35 minutes.

The government also incorporated P2 billion for the Pasig River Ferry Convergence Program, overseeing the construction of 17 additional stations from the current 12 and deployment of 24 50-seater boats to ferry 76,000 commuters daily.

The DBM also set aside P14.04 billion for the 38-kilometer PNR North I Project connecting Malolos, Bulacan to Tutuban, Manila; P4.6 billion for the 56-kilometer PNR South Commuter Project from Solis, Tondo in Manila to Los Baños, Laguna; and P1.7 billion for the construction of the Chico River Pump Irrigation System in Luzon.

In the Visayas, there is a plan for the P754-million New Bohol International Airport Development Project in Panglao as well as P450 million for the Catbalogan airport in Samar. 

About P282 million is set aside for the New Cebu International Container Port project in Consolacion, Cebu and P75 million for the rehabilitation of various ports and wharves.

A total of P2.9 billion is allocated for the Mindanao Railway project and P400 million for the Malitubog-Maridagao Irrigation Project Phase II in North Cotabato.  – With Alexis Romero, Christina Mendez