Government eyeing budget cuts for non-essential spending

MANILA, Philippines — The President’s economic team is looking at slashing the budgets for “non-essential spending” in some agencies to augment the P27 billion in forgone revenues from suspending the P2 additional excise tax in January next year.

The Development Budget Coordination Committee (DBCC) will form a task force to address concerns, especially in retaining the Pantawid Pampasada Program for public utility drivers. 

The DBCC has proposed cuts on the allocations for foreign travel, procurement of new vehicles and non-filling of still vacant positions in certain agencies, Finance Assistant Secretary Anthony Lambino said yesterday.

“The DBCC also agreed to form a task force to look into where we can get the P27 billion, we can either postpone or cut from the budget,” he said.

Quoting Finance Secretary Carlos Dominguez III, Lambino said the DBCC cited non-essential international travel, replacement of vehicles and the possibility of “not filling positions that have been unfilled for a while.”

Lambino allayed fears that the foregone revenues from the suspension of increase in excise taxes might adversely affect the delivery of social services and infrastructure development.  

The foregone revenues were initially pegged at P47 billion, but Lambino said this was reduced to more or less P21 billion as the Department of Finance considered the computation of the projected revenues from the imposition of value added tax (VAT).

“So, it will not be the social programs per se that will be discussed; it will be non-essential spending,” Lambino said.

“We are looking at ways on how to get the P27 billion. That is the priority of the task force formed by the DBCC. We are looking into those non-essential spending,” he said.

Lambino said the economic team is keen on following the provisions of the TRAIN law that mandate 30 percent of incremental revenues from the additional excise taxes should be earmarked for social-mitigating measures.

Lambino has left it to the officials of the Department of Budget and Management (DBM) to explain further the details of the plan to cut non-essential spending.

The DBM has not yet explained fully how the agency will implement the budget cut and if there is a need to forward the proposal to Congress, which is currently deliberating on the P3.757-trillion budget for 2019.

Lambino also revealed the DBM is looking at increasing the subsidy given to jeepney drivers from P5,000 to P10,000 next year.

However, the P10,000 one-time distribution is short of the P20,000 projected by Duterte’s economic managers during deliberations on the first tranche of the TRAIN law.