BY: Professor Emeritus Leonor Magtolis Briones U.P.

National College of Public Administration and Governance Lead Convenor, Social Watch Philippines Chair, People’s Public Finance Institute

Importance of the Budget in National Development

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The Philippines is facing many challenges, the most serious of which are poverty, climate change, health and education, and unemployment. The budget is the most powerful instrument of the government in responding to these problems. It can be an instrument for the redistribution of income groups to fund services and create jobs for the poor. The budget can be used to provide education and health services, as well as training and capacity building and fund projects to create employment. The budget can be used to stabilize the economy and control inflation.

Importance of the Role of the Congress in the Budget

The 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

Importance of the Role of the Congress in the Budget
The 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:

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Allocation function Distribution function Stabilization function To these three functions, I add the Development function

Basic Facts about the Budget
National Expenditure Program- the total amount of projected expenditures for 2014 PhP 2.268 trillion

the General Appropriations Act which will be approved by Congress the above amount is composed of the budget of departments and agencies - PhP 1.162 trillion Special Purpose Funds -PhP 310 billion 1.472 trillion

-PhP 1.472 trillion

• • • • • • •

the Special Purpose Funds includes the PDAF OR pork barrel -PhP 25.2 billion Automatic Appropriations which is composed of Debt Service-interest payments internal revenue allotment net lending retirement life insurance premiums special accounts in the general fund -Ph352.7 billion -PhP 341.5 billion -PhP 24.9 billion -PhP 28.9 biliion -PhP21.1 billion -PhP 796 billion

In addition to the National Expenditure Program, there is the Unprogrammed Fund---------------------PhP 139.9 billion

Furthermore, there are the “Off Budget funds" which are direct remittances.

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Examples :

PAGCOR remittances to the Office of the President (ph 2.6b) Malampaya Funds (ph 26b) Motor Vehicles Users Charge(ph12 b) (Members of Congress are alloted 10M each from MVUC)

of pork and lump sum appropriations...
lump sum for Congress--------------------------25.2 billion lump sums under the control of the President Special Purpose Fund ---------------310 billion Direct Remittances-------------------------------40.6 billion Unprogrammed Funds---------------------------139.9 billion Intelligence Funds-------------------------------846 million

Under the constitution as currently interpreted, the President can create savings, transfer expenditures from one agency to another. thus he can move items in the PhP 2.268 trillion expenditure program if he wishes. All presidents have done this. It is, of course, vulnerable to abuse.

Campaign Advocacy of Social Watch

Abolition of Special Purpose Funds which includes Pork Barrel 2. And transfer these amounts to the different frontline agencies 3. Revisit the interpretation of the constitutional provision which allows the President to transfer funds in the General Appropriations Act.The phrase “his Office” is interpreted as the entire government system. 4. Integrate Off Budget items with the General Appropriations Act

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