August 14,2014 Maxs Restaurant, QC Memorial Circle No improvement in poverty for the past seven years Source: 2012 Full Year Official Poverty Statistics; 2013 First Semester Official Poverty Statistics, PSA-NSCB Poverty Incidence (PI) and Subsistence Incidence among Population (%), 2006, 2009, 2012 and 2013 1 st sem Fiscal Program PARTICULARS 2013 Adjusted Program 2014 Program 2015 Proposed 2016 Proposed Levels in Billion Pesos Revenues Disbursements Surplus/(Deficit) Obligation Budget
Per cent of GDP Revenues Disbursements Surplus/(Deficit) Obligation Budget
9.0 91.0 Notes: *A positive growth rate indicates an improvement in the fiscal balance Source: DBM NBM 119 based on DBM, DOF, and NEDA data Sources of Revenue Sources of Tax Revenues, FY 2015 *Includes incremental revenues for BIR from Republic Act No. 10351 (Sin Tax Reform Law of 2012) Source: FY 2015 BESF, primarily from the Department of Finance Revenue Program
Amount (in million pesos) Net Income Taxes and Profits 1,032,120 Tax on Property 5,017 Taxes on Domestic Goods and Services 700,821 Taxes in International Trade and Transactions 456,468 Total 2,337,333
Amount (in million pesos) Growth rate (%) 2013 2014 2015 2013-2014 2014-2015 Tax Revenues 1,535,698 1,879,918 2,194,427 22.41 16.73 Non-tax Revenues 177,459 136,133 140,906 (23.29) 3.51 Privatization 2,936 2,000 2,000 (31.88) 0.0 Total 1,716,093 2,018,051 2,337,333 17.6 15.82 National Government Financing FY 2013 to FY 2015 (in million pesos) Particulars 2013 a/ 2014 2015 GROSS FOREIGN BORROWINGS 33,767 130,500 95,700 Net Foreign Borrowings (83,821) 4,236 20,898 GROSS DOMESTIC BORROWINGS 520,934 620,011 605,122 Net Domestic Borrowings 402,939 279,734 289,537 NET FINANCING 319,118 283,969 310,436 CHANGE IN CASH 65,933 16,002 24,978 TOTAL NET FINANCING REQUIREMENT 164,062 266,247 283,687 a/ Based on actual data reported in the Cash Operations Report (COR) Source: FY 2015 BESF, primarily from the Bureau of the Treasury Debt trap. While government is planning to borrow a total of P700.822 Billion, it will only receive P310.435 Billion for both peso and foreign borrowings due to costs of borrowing and other charges. Debt Servicing in the P2.606 T budget does not reflect Principal Amortization NG Debt Service Expenditures (in million pesos) 2013 2014 2015 Interest Payments 323,434 352,652 372,863 Domestic 222,317 255,970 277,565 Foreign 101,117 96,682 95,298 Principal Amortization 235,583 466,542 390,386 Domestic 117,995 340,277 315,585 Foreign 117,588 126,264 74,802 GRAND TOTAL 559,017 819,194 763,250 Source: FY 2015 BESF, primarily from the Bureau of the Treasury Source: FY 2015 Budget of Expenditure and Sources of Financing: DBM Note: Net Lending amounts to PhP16.626B in 2013, PhP24.95Bin 2014 and PhP26.5B for 2015. This is equivalent to percentage distribution of 0.83%, 1.1% and 1.02% in expenditure program by sector respectively. Allocation by Sector I n
B i l l i o n s
o f
P e s o s
I n
B i l l i o n s
o f
P e s o s
*Are Personal Services understated? Source: FY 2015 Budget of Expenditure and Sources of Financing: DBM Allocation By General Expense Class Allocation by Region Source: FY 2015 Budget of Expenditure and Sources of Financing: DBM In Billion Pesos Where are the poor? The 16 poorest provinces Province 2012 Poverty Inciden ce (%) Island Region Lanao del Sur 67.3 Mindanao Eastern Samar 55.4 Visayas Apayao 54.7 Luzon Maguindanao 54.5 Mindanao Zamboanga del Norte 48.0 Mindanao Sarangani 46.0 Mindanao North Cotabato 44.8 Mindanao Negros Oriental 43.9 Visayas Northern Samar 43.5 Visayas Source: 2012 Full Year Official Poverty Statistics, National Statistical Coordination Board *10 of the 16 poorest provinces are situated in Mindanao; 3 out of 4 in Visayas from the Samar provinces Province 2012 Poverty Inciden ce (%) Island Region Western Samar 43.5 Visayas Bukidnon 41.5 Mindanao Lanao del Norte 41.4 Mindanao Camiguin 41.0 Mindanao Masbate 40.6 Luzon Sultan Kudarat 40.4 Mindanao Sulu 40.2 Mindanao WHAT THE 2015 NATIONAL BUDGET LOOKS LIKE The Budget is like a huge, huge box. When it is opened, there are smaller boxes. National Expenditure Program Ph2.606 trillion draft General Appropriations Act Ph1.74 trillion
Automatic Appropriations Ph866.2 billion The first smaller box is composed of two even smaller boxes: the budgets of agencies and the special purpose funds. in the first of the two smaller boxes are the agencies with the ten highest budgets
General Appropriations Act PhP 1.74 trillion
Special Purpose Funds PhP 378.5 billion
Agency Budgets PhP 1.361 trillion
There are still items which are not listed in the expenditure program. still another box with a different color. Inside this box are two boxes: off budget items and direct remittances. the other box contains the unprogrammed expenditures.
Not in the Expenditures/ Not in the Gen. Appropriations Act Unprogrammed Funds Ph 123 billion Off Budget items and Direct Remittances Ph 40.6 billion
OUTSIDE THE EXPENDITURES BOX Top 12 Agencies, FY 2013-2015 Dept. FY 2013 GAA
NEP 2015 Budgetary Support to Government Corporations
44,664,500
46,255,210 61,319,392 Allocation to Local Government Units
17,529,452
19,588,843 33,131,405 National Disaster Risk Reduction Management Fund
7,500,000
13,000,000 14,000,000 Contingent Fund 1,000,000 1,000,000 2,000,000 DepEd School Building Program
1,000,000
1,000,000
- E-Government Fund 1,000,000 2,478,900 1,000,000 International Commitments Fund
2,636,723
4,815,644 7,443,963 Miscellaneous Personnel Benefits Fund
69,089,206
53,535,086 118,142,443 Pension and Gratuity Fund (formerly Retirement Benefits Fund)
98,715,143
120,495,952 140,566,386 Source: GAA 2013-2014: DBM; FY 2015 National Expenditure Program
Proposed Special Purpose Funds for 2015 1 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. SPECIAL PURPOSE FUNDS (in 000) GAA 2013 GAA 2014 NEP 2015
Priority Development Assistance Fund
24,790,000
-
- Priority Social and Economic Projects Fund 1
- Feasibility Studies Fund -
400,000
- Rehabilitation & Reconstruction Program
20,000,000
1,000,000 TOTAL (in 000) 267,925,024 282,569,635 378,603,589 Source: GAA 2013-2014: DBM; FY 2015 National Expenditure Program
UNPROGRAMMED FUNDS (in 000) GAA 2013 GAA 2014 NEP 2015 Budgetary Support to GOCCs
16,826,406
3,036,268 5,060,762 Support to Foreign-Assisted Projects
2,226,655
6,124,491 3,095,319 General Fund Adjustments (for the Share of the ARMM pursuant to R.A.9054; NEP 2015)
1,000,000
1,000,000 800,000 Support for Infrastructure Projects and Social Programs 23,000,000
20,000,000 20,000,000 Disaster Relief & Mitigation Fund -
3,000,000 - Debt Management Program 60,363,130 1,000,000 - Proposed Unprogrammed Funds for 2015 Source: GAA 2013-2014: DBM; FY 2015 National Expenditure Program
UNPROGRAMMED FUNDS (in 000) GAA 2013 GAA 2014 NEP 2015
AFP Modernization Program
10,632,180
5,000,000 10,000,000 Risk Management Program -
20,000,000 30,000,000 Payment of Total Administrative Disability Pension
3,000,000
243,000 - Reconstruction and Rehabilitation Program -
80,000,000 - Peoples Survival Fund
500,000
500,000
- Equity Value Buy-out of the Metro Rail Transit Corporation 0
0 53,900,000
TOTAL (in 000)
117,548,371
139,903,759 123,056,081 Proposed Unprogrammed Funds for 2015 Source: GAA 2013-2014: DBM; FY 2015 National Expenditure Program
AUTOMATIC APPROPRIATIONS (in 000) GAA 2013 GAA 2014 NEP 2015 Interest Payments for Debt Service
331,000 331,000 Grant Proceeds 545,844 6,450 140,902 Custom duties and taxes, including Tax expenditures
26,900,000
26,900,000 25,475,000 Net Lending 26,500,000 24,950,000 26,500,000 Employees retirement and life insurance premiums
28,125,611
28,859,006 30,149,491 Rewards and Incentives Fund
2,182,808 - - Special accounts in the general fund
19,240,064
21,116,662 21,242,275 TOTAL
755,219,215
796,029,175 866,231,428 Proposed Automatic Appropriations for 2015 Source: GAA 2013-2014: DBM; FY 2015 National Expenditure Program
Issues on Special Purpose Funds, Automatic Appropriations and Unprogrammed Funds Lump sum appropriations have always been problematic
since these are not as detailed as regular appropriations, they tend to be vulnerable to abuse.
accountability is sometimes difficult to establish and documentation difficult
in the Philippines, lump sum appropriations include special purpose funds, overall savings and unprogrammed funds To Summarize
Total projected National Expenditures-Ph2.758 trillion General Appropriations - Ph1.740 trillion Unprogrammed Expenditures- 123 billion Off Budget Remittances- 29 billion Automatic appropriations- 866 billion
General Appropriations Act to be passed by Congress - Ph1.740 trillion Special Purpose Funds- 379 billion Agency Budgets to be examined 1.361 trillion, of which are Personnel Expenditures 761 billion free for detailed examination by Congress 600 billion WHO HAS THE REAL POWER OF THE PURSE? For the next four months, Congress will work on the budget and approve it by December.
If the Evardone bill will be passed the President can declare savings by January or any other time of the year.
Even now, the DBM has written to Malacanang changing the definition of savings and proposing a bill for approval by Congress.
WHO HAS THE POWER OF THE COIN PURSE? Congressmen and Senators are anxious to ensure their re-election. They are now under pressure to approve either of the proposed bills.