News

April 2009

Budget for social programs threatened
- Social Watch Philippines/Alternative Budget Initiative

Members of the Alternative Budget Initiative (ABI), a consortium of 60 nongovernment organizations whose alternative budget proposals were adopted into the National Budget for 2009, warned that there could be unreleased allocations for social development programs this year as the total new appropriations for debt service-interest became bloated by P49.8 billion; and the new policy directions on the budget threatened the release of new budget items of implementing agencies.

“Social Watch Philippines (SWP) and the ABI repeatedly warned of a ballooning net of debt service interest payments when the President expectedly vetoes the Bicameral Conference Committee’s proposed debt service cut,” said former national treasurer Leonor Magtolis Briones, lead conver of SWP which organized the ABI. “This has been happening every year,” she added.

Briones noted that the total new appropriations net of debt service-interest payments under the 2009 General Appropriations Act (GAA) is P917.769 billion, or P49.8 billion more than what was proposed by the Executive.

“Congress was able to make the increase by slashing debt service-interest payment by P50.1 billion . Per GAA 2009, debt service-interest payment is reduced to P252.55 billion from the P302.650 billion proposed by the executive to Congress.,” Briones explained. “As is very well expected, PGMA vetoed the entire item of appropriations under Debt Service-Interest Payment, ‘to uphold the rule of law’. The veto of the debt service-interest payments effectively reverted the interest payments amount to P302.65 billion as proposed,” she said.

“Principal amortization for 2009 is P378.866 billion; and since this is considered as an off-budget item, it is not part of the P1.41 trillion budget. Principal amortization is included in the GAA as annex,’ Briones explained.

According to Rene Raya of Action For Economic Reforms (AER), such increases are illegal and do not uphold the rule of law. “This does not promote progress. As expected, the social development programs supposedly financed through the funds from the debt service cut will be affected,” he said. “This could mean more unreleased funds for environment, health, agriculture and education,” he added.

Meanwhile, Hazel Tanchuling of Rice Watch Action Network said that the ABI is set to guard the release of funds for increases in the GAA that are in line with the ABI proposals for health, agriculture, environment and education. “The new policy directions set through the President’s veto message will threaten the release of these budget items,” she said.

Tanchuling explained that the ABI is referring to the section of the President’s veto message where PGMA said “…allow me to underscore that there were changes, increases, reductions and new budgetary items initiated by Congress in the FY 2009 GAA. I hereby declare that such changes, increases, realignments and new items shall be subject to the NG’s cash program and prudent observance of fiscal management, including Presidential approval pursuant to Section 25(5), Article VI of the 1987 Constitution, and in accordance with the requirements of Section 35, Chapter V, Book VI of E.O. No. 292.”

“We call on civil society groups and the media to help the ABI ensure that the funds for critical socioeconomic programs are released and report any abuse of funds in the communities,” Briones said.

“There are very large amounts of highly discretionary budget items, such as the P19.186 billion Special Purpose Funds where the biggest item is the P10.07 billion Economic Stimulus Fund. We call on legislators to exercise their power of the purse and conduct monthly legislative oversight on the budget to make sure that the funds go to the right beneficiaries and are not used for election and corruption,” Briones added.

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