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It is often said that the budget is the most powerful public articulation of fiscal policy. The budget is considered as the development policy expressed in peso terms. And no less than the Constitution vests Congress the privilege and the responsibility to serve the people and provide for their development as the budget passes through legislative deliberation and approval. Every year, Congress goes through the process of holding public hearings and discussions on various aspects of the budget being proposed by the Executive. Budget items are scrutinized and heads of various departments and agencies are thoroughly questioned to justify the proposed budgets for their programs. Discussions on the specific and technical details of various allocations are certainly crucial and it is easy to get lost in the discussion of increases and decreases in budget items. As a development tool, the budget should always be viewed in light of prevailing social conditions and the pressing challenges being confronted by the people, especially the poor and the marginalized, who are supposed to ultimately reap the benefits of public spending. As Congress deliberates the proposed budget for the year 2010, the Alternative Budget Initiative (ABI) would like to reiterate critical social realities which, we believe, the present government and the proposed budgets should address. Poverty. Latest official data by the year 2006 reveal that 27.6 million Filipinos are living below the poverty line. The official poverty survey for the same year showed that the sectors with highest poverty incidence are the fishermen( 49.9 %), farmers (44.0 %), and children (40.8%). In terms of magnitude, the largest numbers of poor are among the following sectors: children with 14.4 million, women with 12.8 million and the urban poor with 6.9 million. Pending the release of the latest official poverty data, there are good reasons to believe that poverty incidence and magnitude would have increased by now. First, the food and fuel crisis which struck in 2008 saw the dramatic increase in the prices of food commodities (especially rice) and petroleum products. Second is the financial meltdown in the United States that led to the global economic recession. These developments can only have a debilitating effect on those who are already poor and those who are treading along the poverty line. Already, the Social Weather Stations’ (SWS) self-rated poverty survey for the second quarter of 2009 shows that 50% of families (approximately 9.8 million) consider themselves as poor. Hunger. According to official statistics, as of year 2006, 1.9 million families, approximately constituting 12.2 million individuals, are considered subsistence poor or

Alternative Budget Initiative 2010


Introduction those having incomes less than what is required to buy adequate food. The SWS hunger survey as of the second quarter of 2009 reveals that families experiencing involuntary hunger at least once in the past three months rose to 20.3% (estimated 3.7 million families) from 15.5% (estimated 2.9 million families) in the previous quarter. Unemployment. The anemic performance of the economy in the past two quarters leaves little hope for drastic reduction of joblessness in the country. SWS survey shows that unemployment rate is 25.9% as of second quarter of 2009. Historical data of SWS unemployment survey also reveals that, except for December 2007 when it was at 17.5%, adult unemployment in the SWS surveys has been 20% and above since May 2005. This means that job generation was inadequate for the population even during the periods of high growth. Poverty, hunger and unemployment remain at the crux of development challenges in the Philippines. They spawn a host of deprivation in human development conditions. This include poor health, lack of education, low or no skills, etc. which diminishes their productive capacities and creates economic and social insecurities. It is from this vantage point that we at the Alternative Budget Initiative invite the representatives of the people in Congress to assess the proposed budget and to pass an expenditure program that invests on inclusive and sustainable development. It is in this context that the Alternative Budget Initiative raises the need to pass a budget that will ensure the protection of the people who are most vulnerable in this time of crisis.

Alternative Budget Initiative 2010


Analysis of the GY 2010 Proposed National Budget


The proposed National Budget for Fiscal Year (FY) 2010 amounting to P1.541 trillion was submitted to Congress with lofty promises of what the budget will do for economic growth from the President. There is certainly a need to ensure that the proposed budget is able to address the dampening effect of the global financial crisis on the domestic economy. During the first six months of 2009, Gross Domestic Product (GDP) grew by 1.0 %, much slower than the 4.0 % growth posted during the same period last year. This anemic performance of the economy has already exacted its toll on the revenue program and pushed the government into higher deficits. Revenue collections from January to July of 2009 amounted to P644.1 billion, a decrease by P27 billion from the same period last year. Tax revenues in particular decreased from P601.689 billion to P569.17 during the same periods. Falling revenues prompted several revisions of the programmed deficit which now stands at P250 billion. As of July, the deficit has reached P188.043 billion. While the 1.0 % growth is well within the 0.8 % to 1.8 % official GDP growth target for the entire year, it is too modest to have a significant impact for 92 million Filipinos. Much more is needed to avert and reverse worsening problems of poverty, unemployment and the resulting deterioration in quality of life. As the country continues to reel over the effect of the global economic slowdown on the domestic economy and social development, government is faced with a tight fiscal space within which to craft the budget. A balancing act is required between increasing expenditures without plunging into a fiscal crisis. On the one hand, there is pressure to increase spending to pump-prime the economy and for more support to economic and social services. On the other hand, revenue collection cannot support increases in public spending and as it stands, the government has already accumulated a high level of deficit which is expected to reach P250 billion by year-end. A “maintenance” budget The proposed 2010 expenditure program is a “maintenance” budget and not likely to “lay the groundwork for a full-scale revving up of the economy in the coming years” as proclaimed in the President’s Budget Message. The total amount of P1.54 trillion is 8% or P114 billion more than what was programmed for 2009. The increase, however, is not due to greater spending for productive activities and programs that will have the greatest impact on economic and social development. The proposed budget is actually reining in on new expenditures and capital outlays even as government consumption has been shown to be a major driver of growth for the first

Alternative Budget Initiative 2010


Analysis of the GY 2010 Proposed National Budget semester of 2009. Figure 1 shows a comparison between the total FY 2009 program and FY 2010 proposed budget and by major classifications.

P114 Bn more

P3.774 Bn less

Total Obligations

New Appropriations

P659 Billion

P696 Billion

P51 Bn less

Automatic Appropriations



P882 Billion

P166 Bn more P123 Bn more

P914 Billion

P1.541 Trillion

1, 1, 1, 1, 1, 20 40 80 60 20 80 00 40 60 0, 0, 0, 0, 0, 0, 0, 0, 0, 00 00 00 00 00 00 00 00 00 0, 0, 0, 0, 0, 0, 0, 0, 0, 00 00 00 00 00 00 00 00 00 0 0 0 0 0 0 0 0 0 -

In thousand pesos

Figure 1. Comparative Figures of FY 2009 program and FY 2010 proposed budget



Lower level of New Appropriations. In terms of type of appropriations, New Appropriations is set at P914 billion. This is P3.77 billion less than last year’s amount, a development that is inconsistent with the avowed intent of “revving” up the economy. And since New Appropriations is the portion of the budget which is subject of Congressional approval, Congress effectively has Figure 2. New Appropriations, Programmed and fewer resources available to Unprogrammed Funds of FY 2010 Proposed Budget reallocate compared to last Unprog funds, year. P69B

New Appropriations of P914 billion is inclusive of P69 billion Unprogrammed Funds. (Figure 2) Unprogrammed Funds are stand-by authorization that can only be funded if revenues exceed target or

Alternative Budget Initiative 2010

Prog funds, P845B

New Appro 59%

Auto Appro 41%


Analysis of the GY 2010 Proposed National Budget there are new sources of financing. Thus, P845 billion are for Programmed Funds which include those budget items, the funding source of which has already been identified. The increase in the total obligations is due to the 21.47% increase in Automatic Appropriations. The P696 billion allocation represents a P123 billion increase from last year’s amount. This is largely composed of debt service-interest payments and Internal Revenue Allotment (IRA), among others. Decreasing share of Departments/Agencies. Figure 1 shows that the total budget for departments is P659 billion. This is P51 billion less than the previous year. Special Purpose Funds, on the other hand, increased by 23.22% to P881.879 billion. This has resulted to a smaller share of the Departments/Agencies over total budget, from 49.81% to 42.77%. Lower Capital Outlays and Infrastructure Spending. Capital Outlays (CO) was reduced from P221 billion to P168 billion. The P52.8 billion cut reduced the share of CO to total budget from 15.5% to only 10.9%. The decrease in CO is primarily due to Public Infrastructures getting P117.9 billion which is P31 billion less than last year. It should be noted however that increasing infrastructure spending per se, while having the potential to stimulate the economy, has its pitfalls. The quality and efficiency in the selection of projects and utilization of funds will determine the extent of its stimulating impact in the economy. Unfortunately, numerous cases of infrastructure projects being sabotaged as source of corruption have been reported. Leakage in infrastructure spending may not necessarily stimulate the economy if these are deposited in banks or spirited out of the country Debt service-interest payment gets the biggest increase. Distribution of the proposed budget would reveal that social and economic services will get higher share of total budget at 31% and 23%, respectively, while Debt Service-Interest Payments will get 22%. In absolute terms however, interest payments will actually have the biggest increase—P88 billion more than last year compared to the P27.7 billion Table 1. Variance of FY 2009 and FY 2010 increase in social services. Economic budget per sector services will actually be reduced by Increase/ P25 billion. Since debt service is Sector (Decrease) automatically appropriated, it will be (In million pesos) protected from cuts next year should Economic Services (25,182) there be a need to reduce Social Services 27,715 disbursements to contain deficit level. This means that actual spending for Defense 8,574 economic and social services can even General Public Services 12,784 be less than the proposed Net Lending 2,843 appropriation. Interest Payments 88,262 Source of basic data: BESF FY 2010

Alternative Budget Initiative 2010


Analysis of the GY 2010 Proposed National Budget Unstable fiscal position The Budget Message claims that the proposed expenditure program “stands on solid ground: a strong economy and a strong fiscal position.� It assumes an economic rebound for next year with GDP growing at 2.6% to 3.6% from the 0.8 % to 1.8 % target for this year. Official growth projections for 2010 are higher than those projected by the International Monetary Fund of 1.0%1 and World Bank of 2.4%2. Optimistic revenue projections. The revenue target of P1.336 billion for FY 2010 is 7.79% higher than programmed revenues for 2009. Tax revenues are expected to grow by 10.45% while nontax revenues will decline by 10.62%. There is cause for concern that the targets will not be met considering that government has a poor record in attaining revenue targets in the past two years. In 2008, revenue shortfall is P33.32 billion while in 2009, estimated government revenues will be P154 billion less than original target. (Table 2) The full implementation of four new laws3 which will yield P50 billion to P55 billion in forgone revenues according to government estimates will also weigh down revenue collections for next year.

Table 2. Growth and Revenue Performance vs. Targets, FY 2008-2009 Particulars Amounts FY 2008 BESF GDP Growth Target (%) 6.1-6.8 Actual GDP Growth (%) 3.8 Revenue Target (in P Mn) Actual Revenue (in P Mn) Variance (in P Mn) FY 2009 BESF Growth Target (%) Revised GDP Growth Target (%)

1,236,228 1,202,905 (33,323)

6.1-7.1 0.8-1.8

Revenue Target (in P Mn) Revised Revenue Target (in P Mn) Variance (in P Mn)

1,393,336 1,239,152 (154,184)

FY 2010 BESF GDP Growth Target Revenue Target (in P Mn)

2.6-3.6 1,335,629

If no new revenue enhancing measures Increase vs. 2009 (in P Mn) 96,477 are put in place, the increase in revenue % Increase vs. 2009 7.79% targets are expected to be propelled by Source of basic data: BESF FYs 2008, 2009 and 2010 economic growth targets which, in the last two years, have been proven to be unattainable.


World Economic Outlook, April 2009 Philippines Quarterly Update, July 2009 3 RA 9337 to lower corporate income tax rate from 35% to 30 %; RA 9504 which raises higher personal exemption for individual taxpayers and exemption of minimum wage earners from income tax; RA 9505 provides tax incentives to investors in Personal Equity and Retirement Account (PERA); and, the National Tourism Policy Act of 2009 which provides tourism-related tax incentives. 2

Alternative Budget Initiative 2010


Analysis of the GY 2010 Proposed National Budget Deficit treads on dangerous levels. The proposed expenditure program hinges on deficit spending of P233 billion, less than 2009 projected deficit of P250 billion. In the unlikely event that the revenue targets are not reached, the actual deficit could further increase. Government borrows more than the requirements to finance the deficit. In 2010, to finance the P233-billion deficit, gross borrowings will reach P660.359 billion. Out of these borrowings, over P405 billion or about two-thirds will go to pay principal amortization (Table 3). These borrowings will further increase the country’s outstanding debt stock which, as of May 2009, is P4.219 trillion. Combined debt service interest payments and principal amortization will increase by 6.20% to P746.175 billion for 2010. (Table 4) Without significant improvement in revenue generation, exceeding the debt ceiling will siphon more public resources from productive expenditures to debt service for 2010 and beyond.

Table 3. Financing Program FYs 2009 and 2010 2009 2010 Variance Particulars (In million pesos) Gross borrowings 660,396 660,359 -37 Total Amortization 391,363 405,373 14,010 Net Financing 269,033 254,986 -14,047 Total Net Financing 250,000 233,448 -16,552 Source: BESF FY 2010

Table 4. Debt Service FYs 2009 and 2010 2009 2010 % Programmed Particulars Increase (In million pesos) Total interest 311,237 340,812 9.50% Total principal 391,363 405,363 3.58% Total Debt Service 702,600 746,175 6.20%

A high deficit spending Source: BESF FY 2010 program with unstable revenue sources is a dangerous combination that can spell a full-blown fiscal crisis. Need for a viable fiscal program

A viable fiscal program is essential in ensuring economic recovery and providing social protection to the millions of poor Filipinos who have been adversely affected by the global recession. Unfortunately, the national budget, as proposed, is not tenable. Overly optimistic targets can only worsen government’s fiscal position to the detriment of all. It would be prudent for Congress to consider the folly of approving an expenditure program based on unrealistic fiscal targets as exemplified in the FY 2009 budget. Growth target for 2009 has been revised several times (Table 5) because the

Alternative Budget Initiative 2010

Table 5. Revisions in the 2009 growth rates GDP growth Particular projection May 2008 (2009 Budget Call) 6.5 to 7.3% August 2008 (2009 BESF) 6.1 to 7.1% February 2006 (NEDA) 3.7 to 4.4% April 2009 (DBCC) 3.1 to 4.1% June 2009 (DBCC) 0.8 to 1.8%


Analysis of the GY 2010 Proposed National Budget government’s economic managers have downplayed the impending effects of the global economic recession. From the original 6.5% to 7.3% GDP growth projection, the official estimate is now down to 0.8 % to 1.8 %. This also prompted the revision of the original revenue target of P1.393 trillion to only P1.239 trillion. FY 2009 deficit has breached the original deficit ceiling as aggressive public spending is pursued in an effort to ostensibly stimulate the economy. Latest figures from the Bureau of the Treasury show that from January to August 2009, deficit has already reached P210 billion. Analysts fear that the deficit could reach P300 billion by year-end. It should be noted however that the efficacy of the stimulus package remains suspect. From January to June, total disbursements reported by the Treasury amounted to P699.115 billion. For the same period, deficit reached P153.413 billion but GDP grew by a measly one percent.

Table 6. Revisions in the deficit targets for 2009 as of June 2009 Deficit Target 1 May 2008 0 August 20082 P40 billion November 20083 P102 billion 4 February 2009 P160 billion March 20095 P177.2 billion May 20096 P199.2 billion June 20097 P250 billion Sources: 1 Budget Call FY 2009 2 Budget of Expenditures and Sources of Financing FY 2009 3 “Gov’t jacks up borrowing ceiling” Philippine Daily Inquirer, November 14, 2008 4 “Budget deficit set at P160b” Manila Standard Today, February 21, 2009 5 “P177-B cap on budget deficit in 2009 stays” Manila Bulletin, March 26, 2009 6 Budget Call FY 2010 7 “Gov’t revamps targets” Business World, June 11, 2009

Implications It is imperative for the Legislature to engage as much as it can to address the pitfalls in the proposed 2010 budget. While the extent of Congressional intervention in the proposed budget is heavily compromised by the fact that New Appropriations is only 59% of the budget, it can still make significant improvement to ensure that an expenditure program which is viable and responsive to current economic conditions and social development needs of the country is adopted. The fiscal program should be vigorously scrutinized to assess the viability of revenue targets and financing requirements. Determination of realistic revenue targets is imperative to determine the appropriate level of government spending. Overestimation of revenue targets and underestimation of deficit and expenditure ceilings can lead to the worsening of the fiscal position. Budget items without clear, identifiable and useful purpose should be eliminated to reduce inefficiency, redundancy, and highly discretionary lump-sum funds which are prone to abuse and mismanagement. Greater scrutiny of Special Purpose Funds should be done as it constitutes 57% of the proposed budget with particular emphasis on lump-sum

Alternative Budget Initiative 2010


Analysis of the GY 2010 Proposed National Budget appropriations that are prone to frivolous spending. These items are particularly significant with the coming elections as discretionary funds may be used for political considerations. The Alternative Budget Initiative (ABI) has identified such items and is presented in the succeeding section. Infrastructure spending should be thoroughly reviewed and mechanisms for greater accountability and transparency in utilization of appropriated funds should be ensured through inclusion of appropriate special provisions on reporting and monitoring, etc. Adequate financing for social protection should be prioritized. ABI urges Congress to pursue a public expenditure program that promotes investment in inclusive and sustainable development. The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) provided recommendations in its Economic and Social Survey of Asia and the Pacific 2009 titled “Addressing the Triple Threats to Development� which was published in March 2009. The report underscored the need to ensure that expenditures should have the highest social returns, to expand social protection systems. It also emphasized that key to the quality of future economic growth and development is spending, not only for social infrastructure, but also on improving delivery of education and health systems. The UNESCAP report also pointed out that if the downturn is prolonged, longer-lasting public spending (ex. social infrastructure and services) may be more valuable than fastacting expenditures (ex. tax cuts and transfers). It also stressed the need to invest in environmentally sustainable development and innovation. There is a need to strengthen the exercise of oversight function of the legislature to curtail wastage in government spending. This can be done through the Joint Legislative Oversight Committee on the Budget, the creation of which was approved by the BiCameral Conference Committee on the 2009 Budget when it convened in January 2009. Congress can accelerate the initiatives towards budget reform which were already started early this year with the public hearing conducted by the Senate Committee on Finance on the impoundment control bills and the filing of similar and related bills at the House of Representatives.

Alternative Budget Initiative 2010


Alternative Budget for Education


FY 2010 is a critical year for education as it is for the other MDG sectors. The year marks the final stretch to Education for All (EFA) 2015. Nearly ten years back in Dakar Senegal, 182 countries adopted the Dakar Framework of Action which outlined six education goals:  Expanded early childhood care and education;  Universal completion of basic education;  Learning and life skills for young people and adults;  Increase in adult literacy by 50 percent;  Gender parity by 2005 and gender equality by 2015; and,  Improved quality of education. In 2010, countries will be conducting its End Decade Assessment (EDA) to check progress in meeting the six goals. Prior to this, a global UN Conference will take place in Belem, Brazil to assess the achievement in literacy and adult education which corresponds to EFA Goals 3 and 4. The Philippines will conduct its own assessment as part of the global review process. Unfortunately, the picture does not seem to be rosy at all for the country. Almost ten years after the Dakar conference, critical gaps in education remain. Reversals were noted in key target areas that threaten the goals related to universal basic education, literacy and quality. Based on the current rate of progress, key education targets will most likely be missed in 2015. The sad reality is that, historically, Filipinos have been recognized as one of the most literate and better educated people in the developing world. There was a time when the Philippines was next only to that of Japan in education performance and achievement. In recent years, however, the country’s international standing in education has been significantly eroded. UNESCO’s Education Development Index (EDI) for year 2008 ranked the Philippines 75th among 125 countries, falling behind most Asian countries such as China, Malaysia, Indonesia and Vietnam. What seems to be the problem? Many studies have actually been done which point to the same problems related to resources, efficiency and governance. A comprehensive report prepared by the Philippine Human Development Network noted sector-wide studies conducted since the mid 1920s have cited basically the same problems afflicting Philippine education. These are:1  High dropout rates;  Huge number of children outside the reach of schools;


Bautista et al., 2009

Alternative Budget Initiative 2010


Alternative Budget for Education

 Poor pupil performance;  Low functional literacy;  Poor teaching quality;  Disregard of the use of mother tongue in the early years of learning;  Excessive centralization; and,  Inadequate financial resources. Today, the same problems are felt. The country is way off target in its goal of achieving Education for All by 2015. The National Economic Development Authority (NEDA), in its mid-term review of the MDGs, noted that education is the most threatened among the MDG targets. The National Statistics Coordination Board (NSCB), likewise, stated that the country was far from achieving the EFA goals by 2015 particularly given the drop in net enrolment rate. Reviewing the six EFA goals shows the Philippines is scoring poorly in most goals. (Box 1)

Box 1. Philippine Performance on EFA Goals Goal 1: Coverage of ECCD at just one-third of preschoolers is far too low than the actual target. Goal 2: The country is moving back in terms of universal coverage of basic education with NER down to 84.8% compared to 96% in late 1990s; dropout rates remain alarmingly high; over two million school age children, 6-15 years old are out-of-school. Goal 3: On life skills, continuing adult education is virtually non existent in the country. Goal 4: On literacy, about 9.6 million Filipinos 10 years old and above are not functionally literate; there has been slow progress in literacy or no improvement at all over the years. Goal 5: Yes, there is gender parity in education but the curriculum, the school environment and education outcomes are far from being gender fair Goal 6: Official DepEd data shows that student performance in achievement test has been improving over time. However, many other measures of quality shows contrary results.

Equity remains a major concern which impacts on the achievement of the EFA goals. UNESCO, in its Global Monitoring Report launched in November 2008, cited the Philippines as among countries that are depriving children of basic literacy and numeracy skills because of failure to address “deep and persistent” inequalities in education. The UN agency said that governments must get more serious about tackling inequality which arose from, among others, income, gender, location, ethnicity, language and disability. Filipino children in the poorest 20 percent receive five years less education than children from the wealthiest families. The poor are pushed out of school due to financial constraints, employment and the high cost of schooling. UNESCO raised concerns about the quality of education delivered to Filipino schoolchildren. Many schools and classrooms are in need of repairs. Distance

Alternative Budget Initiative 2010


Alternative Budget for Education

discourages children in remote communities from attending school. UNESCO said teachers in the Philippines have reported one in seven children walking more than five kilometers to attend school. A significant number of schools suffer from acute shortage of seating. Many schools lack infrastructure and basic learning facilities such as libraries and science laboratories. The UNESCO report noted that schools in rural villages operate fewer days a year than town or city schools. A significant percentage of teachers manifest poor morale and weak motivation which impact on teaching effectiveness. The huge and still increasing number of out-of-school children and youth underscore the continuing problem of access in the Philippines, affecting most particularly the poor rural children. The social cost of missing out on these children will be tremendous. They must be urgently attended to and given a chance to complete basic education by returning back to school or participating in alternative learning programs. Overall, there is a need to address the key problems that impact on education access and quality. A fast track strategy must be developed and implemented accordingly to achieve the six EFA goals by 2015. The Arroyo Administration Proposed Budget for Education in FY2010 For FY2010, the proposed budget for Education, Culture and Manpower Development increased by 5.8% from the 2009 level to P235.2 billion representing 15.3% of the total proposed budget. Of this amount, the Department of Education (DepEd), including the School Building Program, gets the biggest allocation of P172.8 billion. As in previous years, the DepEd got the highest allocation among all government departments and agencies. The President’s budget message presents the highlights of the 2010 budget for basic education which includes the following:  P2.1 billion - Creation of 14,729 new teaching & non-teaching positions;  P1.0 billion - Training of teachers, school heads, mobile teachers and other nonteaching staff;  P6.4 billion - Construction of new classrooms particularly in areas experiencing severe shortage;  P500 million – School-based Management to empower schools/ communities;  P1.1 billion - School computerization program;  P2.1 billion – Textbooks/instructional materials to ensure a 1:1 ratio;  P1.8 billion - Pre-School Education Program; and,  P3.9 billion - GASTPE for 703,318 grantees. It is also important to note that the national budget under the DSWD allocation contains an allocation of P10 billion for the Pantawid Pamilya program to provide cash grants to

Alternative Budget Initiative 2010


Alternative Budget for Education

poor households. The subsidy includes a cash transfer to the poorest households amounting to P300 per month per child who attends school. In absolute terms, the DepEd budget has Figure 3. DepEd Budget FYs 1999 - 2008 been increasing at a D E P E D B U D G ET respectable rate of B u d g e t in a bs o lu te te r m s in c r e as in g , bu t … . F Y2 01 0 6.9% per year for the P1 72 .8 B period 2002 to 2009. The increments were significant starting 2005. For 2010, while DepEd continues to get the highest allocation among all departments, its proposed allocation showed only a marginal increase of about one percent from the 2009 Figure 4. Share of DepEd Budget B u dg e t is fa llin g w ay sh ort in rela tiv e terms … budget. 15 0 14 0 13 0 12 0 11 0 10 0

90 80

B ud g e t ( in b illio n s)

P 4. 0 B*

1 99 9

2 0 00

20 0 1

2 00 2

2 00 3

20 04

2 0 05

2 00 6

2 0 07

20 0 8




10 5

1 06

1 10

11 2

1 22

13 7

14 9

P 0 .2 B * P 0. 4 B*

In relative terms, the situation looks even worse. DepEd’s share in the total budget for 2010 dips further to just 11.2% compared to the previous year’s 11.9%. This represents a consistent decline in the budget share of basic education in the total budget pie. Factoring inflation rate and projected increment in student enrolment, per pupil expenditure is expected to decline further as it did in the last years since 1998.

F a llin g sh ar e o f De pE d in N ation a l Bu dg et

2 0 10 B u dge t

11.22 %

D e pE d B udg et S hrin k in g s hare of t he bud get pie 199 8 200 6 200 7 200 8 200 9

– – – – –

15. 9 6% 12. 7 4% 12. 1 9% 11 . 90% 11 . 87%

S te ad y de c li n e th ro ug h th e y ear s

Figure 5. Education spending per Pupil Finally, the proposed budget for the entire education sector is expected to drop further from the estimated 2.36% of GDP for 2009. International benchmarks recommend a spending level for education of 6% of GDP and 20% of the total budget. Clearly, the Philippines is way off this benchmark. UNESCO’s monitoring report placed the Philippines among

Alternative Budget Initiative 2010

Spending Level Declining Per Pupil Spending Education Budget increasing only by 2% per year while Enrolment rate has been growing at 2.5% per year. Real Per Pupil Expenditure on Basic Education

Estimate 1997









Education Spending must grow faster than the combined effect of inflation and population growth


Alternative Budget for Education

the lowest spenders in Asia and among developing countries. The proposed budget speaks very little about addressing problems related to education access, efficiency and quality. Very little funds are allocated to programs designed to deliver education to the out-of-school children and youth, the IPs, Muslim children and other disadvantaged groups particularly those in poor and remote communities. Programs that address illiteracy are also poorly funded and badly implemented. Schools suffer from low operating funds which impact on quality of teaching and the learning environment. More trained and quality teachers are needed to improve learning in the classroom. Budget Proposals for Basic Education Responding to the key concerns that must be addressed in the education sector, the following proposals are submitted for consideration in finalizing the national budget. The proposals focus on:  Investing in Teachers for Quality Education;  Investing in programs to reach the “unreached”;  Investing to achieve functional literacy for all;  Addressing Equity; and,  Improving Governance.

Table 7. Alternative Budget Proposal for Basic Education Budget Item Department of Education Office of the Secretary 1. Funding requirement for the newly created teaching and non-teaching positions in 2010 subject to actual deployment to schools, schools division offices and newly-legislated/ established high schools (III. e. 17.a.2) 2. Human Resources Training and Development including Teacher's Training,

GAA 2009

NEP 2010

ABI Proposal 2010

Variance (ABI Proposal less NEP)


1,936,071,000 5,296,071,000



1,040,000,000 1,540,000,000


Alternative Budget Initiative 2010


Alternative Budget for Education

Budget Item

GAA 2009

NEP 2010

ABI Proposal 2010

Scholarship and Fellowship Grants (III.e.17.r.) 3. Medical/Dental and Optical Health and Nursing Services (III.c) Field operations of the Medical/Dental and Optical Health and Nursing Services including subsidy to Teachers Pavilion and Treatment of Teaching and Non-Teaching DepEd Personnel afflicted with Tuberculosis 40,952,000 40,952,000 583,029,000 4. MOOE - Regional Operations (III.e) [less GASTPE] 13,659,675,000 13,431,694,000 17,398,734,000 5. Alternative Learning Programs – Field operations of Alternative Learning Systems including Implementation of Accreditation and Equivalency System (III.a.1) (Includes an allocation for a National Literacy Campaign) 240,420,000 284,597,000 1,500,000,000 6. Indigenous Peoples New Item 100,000,000 Education DEPED OSEC 157,958,997,000 159,085,011,000 165,409,531,000 TOTAL (New Appropriations)

Alternative Budget Initiative 2010

Variance (ABI Proposal less NEP)



1,215,403,000 100,000,000 9,684,520,000


Alternative Budget for Education

Rationale/Explanatory Notes 1. Hiring of additional teachers on top of DepEd’s proposal PhP 3.36 billion for the hiring of additional teachers It is important to urgently cover the shortage of teachers to ensure better quality of education. DepEd had computed teaching requirements for school year 2010-2011 totaling to 64,060 teaching positions. However, DepEd’s proposed budget for teaching positions for SY 2010-11 covers only one fourth of these positions. As DepEd has noted in its presentation, there are 64,060 teachers required nationwide at the start of School Year 2010-2011 using 1:1 teacher-class ratio for Grades 1-4 and 5:3 for Grades V-VI and Secondary Schools based on the national enrolment. DepEd aims to address only 25% (17,669). This includes 14,297 for elementary school and regular secondary school and 3,372 for special groups for FY 2010. The ABI education cluster proposes to speed up the target in covering the teacher gap in just two years instead of the four years envisioned by DepEd. This means doubling up DepEd's proposed allocation for new teaching position. An increase of P3.36 billion for the creation of new teaching positions is therefore proposed. This is based on DepEd’s estimated P2.34 billion multiplied by two will yield P4.68 billion less the P1.32 billion in NEP amounts to P3.36 billion) 2. Teacher training for quality education Enhancing quality through teacher training is an important aspect of raising the quality of education. ABI Education cluster proposes an additional spending of P1,000 per teacher for 500,000 teachers amounting to P500M. (Total ABI proposal for 2009 - P1,540,000.00) (DepEd proposes P1,040,000.00 for 2010) 3. Additional health subsidy Additional 542 million for the annual x-ray and laboratory tests required of teachers and medicines for those afflicted with tuberculosis and other respiratory diseases at Php P1,000 for each teacher for 505,115 teachers, (including the proposed 10,372 additional teachers for 2010) and teaching-related personnel such as principals, supervisors and the like. Computation for Health Subsidy at 1000/Teaching and Teaching -Related Personnel Number of teachers (teaching personnel), as of 2009 Deped Q&A Number of Teaching related personnel (principals, supervisors, superintendents, etc), as of 2009 DepEd Q & A

Alternative Budget Initiative 2010

494,743 36,962


Alternative Budget for Education

Computation for Health Subsidy at 1000/Teaching and Teaching -Related Personnel Proposed additional teaching personnel, based on the President’s budget message 2010 Total Teaching personnel & teaching related personnel For proposed health subsidy at 1,000/teaching & teaching related personnel as health benefit (for TB etc.) [Php 1,000 x 542,077 Teaching & Teaching Related-Personnel]

10,372 542,077 542,077,000

4. Enhancing education quality through increased MOOE P 3.967 billion additional MOOE to improve education Quality Maintenance and Other Operating Expenses (MOOE) are used to cover the costs of running the schools, school materials and other expenses in maintaining a conducive learning environment. Based on DepEd Order 61 Series of 2007, DepEd spends P207 per student in the elementary and P507 per student in high school. This amount is very minimal, so much so that principals and teachers are pressured to generate funds. In turn, parents are, at times, forced to shell out money for these expenses. For School Year 2009-2010, DepEd budget estimates the MOOE for Elementary level at Php 680 per student and for high school at P1,104 per student. To ensure quality education and to ease the burden on poor parents to contribute, ABI believes that government should target at least P1,000 per student in the elementary and P1,500 per student in high school until 2015 with consideration of inflation. For 2010, ABI proposes at least P750 for elementary and P1,250 for high school or an estimated total of P17,398,734,000.00 billion for MOOE. Priority should be give to 30% poorest and low performing areas. Requirements: For Elem ( P750) For HS (P1,250) Total proposed MOOE

2010 enrollees (budget message 2010) 13,607,517.00 10,205,637,750.00 5,754,477.00 7,193,096,250.00 19,361,994.00 17,398,734,000.00

Available per 2010 NEP- Deped Regional Operations MOOE (less GASTPE): Regional operations Less: GASTPE

Total ABI proposed additional MOOE

Alternative Budget Initiative 2010

17,371,254,000 3,939,560,000 13,431,694,000 3,967,040,000.00


Alternative Budget for Education

5. Strengthen and expand the Alternative Learning System (ALS) through the following specific allocations: a) Php 1,250,000,000.00 for an additional 500,000 learners from among the outof-school youth at Php 2,500 per learner (based on the global benchmark cost as per commissioned study by the UNESCO Institute for Lifelong Learning (UIL and ASPBAE) out of the five million out-of-school children and youth, and the 5.2 million adult illiterates (2003 estimates). b) Php 150,000,000.00 to cover one additional mobile teacher for each DepEd district to effectively reach out to the out-of-school and the illiterates. c) Php 10,000,000.00 for an ALS summit. d) Php 40,000,000.00 for development of the ALS curriculum and an expanded monitoring and evaluation of ALS. e) Php 50,000,000.00 earmarked for a National Literacy Campaign to generate support for the six million Filipino illiterates in line with the EFA goal of reducing youth and adult illiteracy by at least half by 2015 (Some countries in Asia are targeting elimination of illiteracy by 2015). The allocation will consist of a sustained information campaign, the development of literacy courses and curriculum, the training of literacy facilitators, the implementation of a research program on literacy and policy development to improve youth and adult literacy. The Fifth International Conference on Adult Education (CONFINTEA V) in Hamburg in 1997 and the follow up meeting in Bangkok in 2003 argued for a minimum of three percent of government education budgets to go to adult learning, including literacy for the out-of-school youth. (Global Campaign on Education, 2006). In the case of the Philippines, this translates to about P5 billion annually to finance expanded programs on literacy, equivalency and other nonformal and informal education courses. This is consistent with costing models developed globally which estimate that the Philippines needs to spend between P2 to P5 billion annually to reach the out-of-school and illiterates and, thus, achieve the key EFA targets by 2015. The estimated cost represents about 1.5% to 3% of the annual outlay for basic education. This is not a huge sum and is affordable if government will give due priority, taking into account the huge number of target learners to be reached. In fact, the proposed outlay is modest compared to some of the existing and planned education projects such as the School Feeding Program, GASTPE, the Conditional Cash Transfer, various student scholarship and loan programs, and the school computerization program.

Alternative Budget Initiative 2010


Alternative Budget for Education

6. Develop a national education program to reach out to children of Indigenous Peoples (IP) through both nonformal and informal education. a) Php 26,000,000.00 to cover 40 Learning Centers for Indigenous Peoples (IPs) at 650,000 each learning center In the indigenous communities in Davao Oriental, Agusan and South Cotabato there is high concentration of indigenous communities who are not able to finish high school or even elementary education. To meet the learning needs of these learners in remote and poor areas, learning centers must be conceptualized and constructed in partnership with local communities to cater to children, youth and adults who need functional literacy programs and continuing basic education. The learning center can be a venue where education is closely linked to livelihoods, culture, identity-self development and community empowerment. The proposed Community Learning Centers (CLC) in the community will make available education for children, youth and adults. Its curriculum and learning strategies are mostly learner and community-centered, with deliberate efforts to integrate local knowledge into the curriculum, include local elders/volunteers as teachers and develop learning materials in the local language. The proposed budget of P650,000 for each CLC will cover the construction of CLCs for IPs, production of learning materials, allowances for CLC teachers and volunteers and supplies and materials. Thirty-two CLCs for IPs need to be strategically located at indigenous areas, initially at the following: 4 – Kankana-ey and Ibaloi in Benguet 4 – Ayta in Pampanga and Zambales 8 – Mandaya, Mansaka & Lumad in Davao del Norte

6 – B’laan, T’boli in South Cotabato 6 – Sama and other lumad in Zamboanga 4– Manobo, Higaonon and other Lumad in Caraga

b) Php 24,000,000 for the development of IP curriculum and production of learning modules. c) Php 50,000,000 for reaching out to at least 20,000 IP learners.

Alternative Budget Initiative 2010


Alternative Budget for Agriculture


The poverty incidence in rural areas, at more than half of the rural population, is still highest, according to an Asian Development Bank study. It remains a significant contributor to employment at 35%. As such, spending in the agriculture sector must be targeted and cost effective. Add to that, our rural population is most vulnerable to climate change. Shifting weather patterns has wrought havoc in the agriculture sector’s planting patterns. As such, the proposals that are being put forward herein are geared toward climate-proofing farms by providing more extension work to farmers. We still raise the issue of addressing rice insecurity especially with the threat of greater liberalization of the rice sector. The rice crisis in 2008 continues to haunt us even as the level of government support increased tremendously a year after. However, this level of support should rightly go up if not maintained at 2009 levels considering that the government is facing a number of factors to possibly undermine its goal to attain rice selfsufficiency by 2013.

Table 8. Comparison of Wholesale Price of Rice with Price of Thailand and Vietnam Rice (25% Broken) at 50% Tariff Philippine Thai Rice Vietnamese Rice Year with 50% Rice with (Wholesale Tariff 50% Tariff Price) 2003 12.13 11.07 18.30 2004 17.21 16.22 19.12 2005 19.89 18.36 20.93 2006 21.49 19.89 21.39 2007 21.11 20.35 22.59 2008 42.75 40.88 29.81 Source: Rice and AFTA-CEPT Primer, Rice Watch and Action Network

The threat of liberalization Table 9. Comparison of Wholesale Price of Rice of continues to loom as rice is Thailand and Vietnam (25% Broken) at expected to be phased in by 40% Tariff 2010 in the ASEAN Free Year Thai Rice Vietnamese Philippine Rice Trade Agreement Common with 40% Rice with (Wholesale Economic Preferential Tariff 40% Tariff Price) Treatment (AFTA CEPT). 2003 11.32 10.33 18.30 We have to work hard at 2004 16.06 15.13 19.12 bringing our rice to 2005 18.57 17.13 20.93 competitive level the 2006 20.06 18.56 21.39 soonest possible time even 2007 19.71 18.99 22.59 before the 2013 target. 2008 39.90 38.16 29.81 Otherwise, all our efforts Source: Rice and AFTA CEPT Primer, Rice Watch and Action will be undermined by the Network influx of imported rice from Thailand and Vietnam, potentially binding us to the vagaries of the thin rice world market. Before the rice crisis happened in 2008, even at 50% tariff, the landed price of imported rice is still cheaper than the local produce.

Alternative Budget Initiative 2010


Alternative Budget for Agriculture On top of this is the real threat of climate change. Over time, we have seen more and more wasted palay after being submerged in flooded farms due to intense rains in many agriculture areas during the rainy months. Some experienced almost desertification during dry months subjecting the plants to heat stress. Farmers experienced crop losses, low yields and even greater pest infestations brought about by these extreme climatological events. As a consequence, we can see potential higher grain prices should this remain unattended. The figure below shows the study on temperature in the country. If you look at the map, our irrigated areas are located in the areas with highest temperature (>25 oC). International Rice Research Institute (IRRI) projected that one to two more degrees increase in temperature at night time in these areas with water will translate to 10 percent loss in rice production.

Alternative Budget Initiative 2010


Alternative Budget for Agriculture

In the light of all these, we will have to find ways on how to fast track the attainment of achieving food security bearing in mind the carrying capacity of the environment and available resources, especially water, and arming farmers with tools to deal with global warming. Budget Proposals for Agriculture Table 10. Alternative Budget Proposals for Agriculture Budget Item Objective 1- Optimizing rainwater for agriculture BSWM – water resources developpment, planning & management Objective 2 – Specific and directed fertilization: BSWM – soil conservation Objective 3- Climate change extension : Philrice

ABI Proposal

Variance (ABI Proposal less NEP)







New Item


250,000,000 830,000,000


TOTAL Objective 1. Optimizing Rain Water for Agriculture

In areas where water will most likely be a problem, the use of community-based rain harvesting techniques is crucial. We do not want to see a major irrigation project becoming useless for lack of water, such as the Balog Balog Irrigation project in Tarlac which is essentially without water during dry months and useful only during rainy season. Harvesting of rainwater will help save water that otherwise will just lay waste as runoff and will also help control flood. The estimated cost of cheapest small water impounding project (SWIP) is P50,000 per hectare. The ABI agriculture cluster is proposing an allocation of P500,000,000 that will support SWIP for 10,000 hectares of agricultural lands where they are most appropriate. As the Bureau of Soils and Water Management is responsible for water impounding projects, the fund should be lodged to their bureau for the said purpose. Objective 2. Specific Directed Fertilization To address the nutrient deficiency of rice farms, we recommend the testing of agriculture soils, particularly the major rice producing provinces. Farmers should not be indiscriminately feeding their farms with unnecessary inputs. As Roger Concepcion, former Bureau of Soils and Water Management (BSWM) Director and respected agriculture scientist said, our major rice farms are now suffering from nutrient deficiency as a result of intensive use of agriculture inputs. This objective will ensure that fertilization will be directed to the actual needs of the farms. Alternative Budget Initiative 2010


Alternative Budget for Agriculture

The use of organic materials will also be promoted along this directed fertilization objective. The costing of BSWM is at P40/hectare and the ABI agriculture cluster proposal is to allocate a budget for 2,000,000 hectares for a total amount of P80,000,000. Again, we propose the BSWM to receive and manage this additional fund for the said purpose. Objective 3. Reliable Extension Work to Educate Farmers on Some Climate Change Adjustments in the Farming System Initial studies conducted by Rice Watch and Action Network found that the effects of climate change can be neutralized by a simple change in the farming system. Experts recommended possible adjustment in the cropping calendar. This, among others, is necessarily taught to the farmers. Concepcion also suggested several inexpensive ways of nurturing and bringing back micro and macro soil nutrients such as the use of rice straws and other organic materials. Combining crop management, proper education and training contributes 25 percent 1 to the growth in rice production. If we combine these with seed adaptability techniques, then this growth percentage can increase by another 15 percent. The realization of such increase is highly dependent on a more pro-active extension work that will teach farmers simple technologies to increase their resiliency against the vagaries of the weather brought about by global warming and climate change. For this purpose, we would like to propose additional funding for PHILRICE which will create a Task Force Climate Change Extension. Its main role will be to bring these common technologies to farmers. Philrice has the capacity to undertake this major project as seen in their active role in the Hybrid Rice Commercialization Project. The additional budget will cover resource persons, module and training materials and the training cost of 30 rice producing provinces. Apart from the additionalities that we are proposing, we are urging our legislators to ensure the following: 1) Adequate funding for crop insurance and pushing for easier access to the facility by small farmers 2) Getting more details on the kind of fertilizer and seeds subsidy that DA will be giving out as this is not easily found in the General Appropriations Bill. We propose the total elimination of subsidies for hybrid seeds. 3) Ask the DA for an assessment of the devolution of agriculture extension services to the local governments. 1

15 percent for extension and 10 percent for crop management, “Balisacan, AM and LS Sebastian, 2006. Challenges and Policy Directions: Overview in Securing Rice, Reducing Poverty: Philippines; SEARCA, PHILRICE and BAR, p.14�

Alternative Budget Initiative 2010


Alternative Budget Proposal for Environment


The global environment discourse revolves around climate change as the run-up to the UN Climate Change Conference in Copenhagen for the Conference of Parties (COP) 15 on December 7-18 heightens. Preparatory international negotiations are underway and include activities in Bonn scheduled in April, June and August, in Bangkok on October and in Barcelona on November. At the global level, the main issues revolve around climate change mitigation activities and adaptation mechanisms and, more importantly, how to fund these. At the local level, the “heat” of the climate change discourse has landed, as evidenced by interlocking directorate of government agencies related to climate change. While traditionally, issues related to environment concerns have been lodged under the supervision of DENR apart from the Senate Committee on Climate Change and the House Committees related to environment, there are currently at least three other agencies/offices related to climate change concerns. These are: The Presidential Task Force on Climate Change (PTFCC) chaired by Sec. Angelo Reyes of DOE and vicechaired by Sec. Lito Atienza of DENR with DepEd, DA, CHED, DILG and DOST as members; The Office of the Presidential Adviser on Global Warming and Climate Change headed by Sec. Heherson Alvarez; and, The Inter-Agency Committee on Climate Change which is also composed of different line agencies. Whether this can be interpreted as a serious government priority or mere lip service to a hot issue remains to be seen. As a welcomed development, the Climate Change Act, which among others, creates the Climate Commission which will eventually integrate into one related government formations on climate change is slated to be passed by September 2009. By 2015, the MDGs are supposed to be achieved. The SWP report on the Philippines Midterm Progress on the MDGs reveals that the Philippines have missed and will probably miss on the targets it has set. Official reports stating that the country has made considerable gains in certain aspects such as environment sustainability remain contested. Since 2006, the ABI Environment Cluster has been pushing for financing for critical environment measures that can contribute to ensuring environment sustainability, one of the MDG targets. While advocacy on these proposals must be sustained, the issues related to environment sustainability can be summarized in two words: “Climate Change”. Financing proposals must therefore be focused on Climate Change mitigation and adaptation initiatives.

Alternative Budget Initiative 2010


Alternative Budget Proposal for Environment

The 2010 Environment Sector Budget Analysis Overview of Total Obligations to the Environment Sector (Table 12)  The proposed 2010 budget amounts to PhP 1.5 trillion with total obligations for the environment and natural resource sector only reaching PhP 13.3 billion or 0.86 percent of the proposed budget. Allocation for the sector fell by as much PhP 1.8 billion or 11.9 percent from obligations recorded in 2009. The environment and natural resource sector includes portions of the budget for the DENR, DOST, GOCCs and SPF.  The Department of Environment and Natural Resources (DENR) took bulk (80 percent) of the sector’s budget with total obligations amounting to PhP 11.3 billion. This, however, is 16.3 percent below obligations in the previous year.  The decline in obligations for the sector is accounted for by (a) the drop in allocation to the DENR by as much as PhP 2 billion; and, (b) the end of the economic stimulus fund for the Bantay Gubat and Bantay Kalikasan Program worth PhP 1 billion.  In 2007, the ABI-Environment cluster proposed that budget for the sector should, at the minimum, reach one percent of the total obligations of the national government. While this benchmark was reached in 2009, for the 2010 proposed budget the share of the sector dropped to 0.86 percent. Looking at the DENR

Chart One. DENR Budget Across Agencies Figure 6. Distribution Distributionofof DENR Budget Across Agencies (in(in %; %; 2010) 2010)

 New 0.4% 6.3% 5.4% appropriations to 5.1% the DENR amount 5.9% to PhP 10.7 billion representing 94.1 percent of total obligations to the 5.7% Department. PhP 71.2% 664 million of the obligations is automatically Office of the Secretary EMB LRA MGB NCIP NAMRIA PCSD appropriated. New appropriations to the DENR for 2010 represent a 17 percent drop from last year’s figures. A detailed distribution of new appropriations to DENR is in Table 13 and Figure 6.  The Office of the Secretary will receive PhP 7.7 billion or 71.2 percent of the total new appropriations for the Department and its attached agencies. This amount, however, is 16.8 percent lower that what was approved last year.

Alternative Budget Initiative 2010


Alternative Budget Proposal for Environment

 Allocation for Forest Management of PhP 3.4 billion account for 31.9 percent of the Department’s budget. This amount is actually 10 percent below its budget in 2009. Among the major budget item within forest management is the PhP 1.3 billion capital outlay budget for reforestation.  An almost 40 percent drop in the budget allocated for Protected Areas and Wildlife Management was posted in the 2010 NEP. Allocation for this particular budget item will drop to PhP 299.8 million in 2010 from PhP 479.6 million in 2009. The following protected areas which received budget allocations last year will not receive any allocation for their rehabilitation and development in 2010: Tubbataha Reef; Apo Reef; Mt. Banahaw and San Cristobal; Mt. Kitanglad; Northern Negros National Park; and, the Central Cebu National Park.  The budget remains to be tight with half allocated for personnel services, 32 percent going to maintenance and other operating expenses while less than 20 percent or a little over PhP 2 billion is allocated for capital outlay. For 2010, capital outlay fell by as much as 30 percent.

Chart Two. 2010 DENR Attached Agencies Figure 7. 2010 DENR &&Attached AgenciesBudget, Budget, ExpenseType Type (in%) (in %) ByBy Expense Capital Outlay 19.3%

Personal Services 48.7%

Maintenance & Other Operating Expenses 32.0%

 The biggest budget item within capital outlay is the reforestation program. A total of PhP 1.3 billion is budgeted for this activity accounting for more than half of the total capital outlay budget of the Department for the upcoming year. This amount actually represents a PhP 33.5 million increase for the same budget item in 2009. Urgent Actions for “Climate Change Initiatives” For the past three years the Alternative Budget Initiative on the Environment has been advocating for fund augmentation around five thematic areas to address the dire state of the country’s environment sector. (See Box 1 for summary of updates on financing around these items). There have been positive developments in terms of funding support to major items within the environment sector and within the ABI-Envi Green Bottomlines in 2009 in the arena of conservation and protection of natural resources. It would be good to pursue how improvements on the funding support for the environment sector have been utilized.

Alternative Budget Initiative 2010


Alternative Budget Proposal for Environment

Restore Budget Items on Protected Areas/National Parks and on the Implementation of the Clean Water Act. Budget trends for 2010, however, show that some of these positive developments are ‘one-time’ gains. For example, for 2010, many of the protected areas/ national parks including the implementation of the Clean Water Act will lose support. Protection of these budget items should be pursued. In consideration of the global and Philippine environment situation and considering the gains and lessons from the pursuit of the “Green Bottomlines”, the budget campaign for the environment sector will take on the context of financing initiatives on climate change. These initiatives are anchored around the following urgent alternatives:     

renewable/sustainable energy systems; biodiversity, sustainable agriculture, fisheries and forestry; clean and green industrial technology; ecological waste management; and, disaster response and risk reduction.

Table 11. Budget Proposals for Climate Change Actions

Budget Item

GAA 2009


ABI Proposal

RENEWABLE/SUSTAINABLE ENERGY SYSTEMS Department of Energy A. Programs III.b Direction and Control of Energy Utilization and Conservation for Nationwide IEC and Advocacy Campaign on Energy Conservation 61,227,000 67,529,000 117,529,000 III.e. Direction and Control of Renewable Energy Exploration, Development and Utilization (Allocate PhP 100 million each for the Conduct of Research, Development and Piloting of Alternative Sources of Energy: Geothermal, Wind, Solar, Micro-Hydro, Ocean, Biomass, Biofuels (on idle lands)) 58,000,000 17,789,000 617,789,000 TOTAL

Alternative Budget Initiative 2010

Variance (ABI Proposal less NEP)


600,000,000 650,000,000


Alternative Budget Proposal for Environment

Variance Budget Item GAA 2009 NEP ABI Proposal (ABI Proposal less NEP) BIODIVERSITY, SUSTAINABLE AGRICULTURE,FISHERIES AND FORESTRY Department of Agriculture III.a.11.a GMA – Rice Re-align amount for farmers' capability building on sustainable agriculture 3,131,602,000 2,631,602,000 (500,000,000) III.a.11.b Promotion and Development of Organic Fertilizer (For capacity building of farmers on Organic Agriculture, Biodynamic Farming) 500,000,000 1,000,000,000 500,000,000 III.e. Implementation of Various Agricultural Research Projects (Research, development and piloting of climate change resilient crops and livestock) 208,500,000 258,500,000 50,000,000 Research, development & piloting of alternative/sustainable farming systems New item 100,000,000 100,000,000 Department of Environment and Natural Resources – Office of the Secretary III.a.4 Community Based Forestry Management (CBFM) Programs 100,977,000 141,613,000 641,613,000 500,000,000 III.a.2 Re-align P500 M of Reforestation Project to CBFM 1,604,324,000 1,435,217,000 935,217,000 (500,000,000) III.c.9-14 P10 M each for Tubbataha Reef; Apo Reef; Mt. Banahaw and San Cristobal; Mt. Kitanglad; Northern Negros National Park; and, the Central Cebu National Park 95,000,000 60,000,000 60,000,000 Manila Bay and Coral Triangle Initiative New item 1,600,000,000 1,600,000,000 Mangrove Reforestation Nationwide New item 100,000,000 100,000,000 R&D on Up-Welling & Salt Intrusion Studies on New item 25,000,000 25,000,000

Alternative Budget Initiative 2010


Alternative Budget Proposal for Environment

Budget Item

GAA 2009


ABI Proposal

Coastal Areas Establishment of Marine Sanctuary and coastal resource management in six critical coastal habitats: Lingayen Gulf (Pangasinan), Tayabas Bay (Quezon), Visayan Sea (Panay-Masbate), Cebu Strait (Cebu-Bohol), Panguil Bay (Misamis Oriental) and Macalajar Bay New Item 60,000,000 Mines and Geo-Sciences Bureau 630,077,000 542,522,000 642,522,000 TOTAL CLEAN AND GREEN INDUSTRIAL TECHNOLOGY DOST: Phil Council for Industry and Energy 42,707,000 42,744,000 52,744,000 Research & Development ECOLOGICAL WASTE MANAGEMENT DENR: Environmental Management Bureau A.III Environment Management and Pollution Control for Industrial Pollution Laboratories for the Visayas and Mindanao 339,765,000 352,028,000 2,352,028,000 B.I. Projects: Locally Funded b. Implementation of Ecological Solid Waste Management Act 20,000,000 8,732,000 20,732,000 c. Implementation of the Clean Water Act 49,700,000 50,000,000 PhP 100 M per facility to study and pilot the construction of five waste disposal facilities that will convert garbage into alternative power or biodiesel New Item 500,000,000

Alternative Budget Initiative 2010

Variance (ABI Proposal less NEP)

60,000,000 100,000,000 3,095,000,000



12,000,000 50,000,000



Alternative Budget Proposal for Environment

Budget Item TOTAL

GAA 2009


ABI Proposal

Variance (ABI Proposal less NEP) 2,562,000,000

CLIMATE CHANGE ADAPTATION MEASURES (DISASTER RESPONSE) Office of the President Office of the Presidential Adviser on Global Warming and Climate Change 48,000,000 45,000,000 545,000,000 500,000,000 Nationwide IEC Campaign on Climate Change under OPACC New item 50,000,000 50,000,000 Department of Science and Technology Philippine Atmospheric, Geophysical and Astronomical Services Administration 746,886,000 596,422,000 996,422,000 400,000,000 2,000,000,000 2,000,000,000 6,000,000,000 4,000,000,000 Calamity Fund Community based Early Warning Systems under the Calamity Fund New item 100,000,000 100,000,000 5,050,000,000 TOTAL 11,367,000,000 OVERALL TOTAL  P500 million for the Climate Change Commission for the finalization of the Philippine climate change action framework and plan; and, for piloting of climate change initiatives in the top ten high risk provinces. The Climate Change Act is slated to be enacted by September 2009. In the proposed budget no allocation for the implementation of the Act is reflected. It is being assumed that it will integrate within the Climate Change Commission the existing Office of the Presidential Adviser on Global Warming and Climate Change which has a budget allocation of PhP 45 million. It is proposed that the Commission be given ample resources to: (1) initiate a nationwide multi-stakeholder consultative and consensus building process towards drafting and finalizing the Philippine climate change action framework and plan; (2) harmonization of existing government programs; and to (3) undertake piloting of climate change initiatives.  Harmonization of existing programs to a national climate change action framework and plan. There are existing programs already implemented across various department and agencies that can be viewed as “potential” climate change mitigation measures – initiatives that will lead to the reduction in green house gas emissions and to climate resilient low carbon growth and development. Programs and budgets for these measures are already available. Reviewing these and harmonizing them around

Alternative Budget Initiative 2010


Alternative Budget Proposal for Environment

the would be climate change action framework and plan will also be necessary. While not a comprehensive list, Table 15 presents “potential” climate change initiatives measures within the 2010 NEP amounting to PhP 18.3 billion.  Orient DENR programs, operations and activities towards climate change actions. There are significant budget allocations for initiatives related to Biodiversity, Sustainable Agriculture, Fisheries and Forestry estimated at PhP 11.5 billion largely due to the budget of the DENR. Among all government agencies, the DENR has the clear mandate to take the lead in this era of global warming and climate change. Support for land use mapping, reforestation, coastal resource management, coral reef protection and biodiversity areas must be continually improved.  Institute climate change actions within the agriculture sector. Considering that the Philippine economy remains rural and agriculture based, investments on both climate change mitigation and adaptation measures must be “climate sensitized” and enhanced. While the Department of Agriculture has budget allocations worth PhP 1.4 billion in “potential” climate change actions including a PhP 500 million allocation for the Promotion and Development of Organic Fertilizers, bulk of their funds still lie within non-climate sensitive investments; i.e., chemical fertilizers, hybrid seeds, highly water-dependent farming.  Intensify financing for renewable energy. Allocation for Renewable/ Sustainable Energy Systems, which responds to the top green house gas emitter, remains low and is estimated to reach only PhP 295.4 million with budget items limited to planning, policy formulation, monitoring and regulation. It is proposed that government take more pro-active steps in initiating research and piloting of alternative energy sources as well as energy conservation schemes.  Pro-Active, not just reactive, programs responding to climate related disasters. Government has also been investing on climate change mitigation programs, initiatives related to disaster responsiveness and risk reduction. For 2010, investments along this budget item are estimated at PhP 6 billion. Clearly needed considering recent events of flash floods that destroy private, commercial and public properties around the country, funding support for disaster preparedness and risk reduction measures must also be improved.  In total it is proposed that an additional PhP 11.4 billion for climate change actions be included in the proposed 2010 budget.

Sources: 1. Mapping Philippine Vulnerability to Environmental Disasters, Manila Observatory, 2005. 2. EM-DAT: The OFDA/CRED International Disaster Database, - Université catholique de Louvain - Brussels – Belgium, September 2009. 3. Assessment Report 4, Intergovernmental Panel on Climate Change, 2007. 4. Global Problems, Local Solutions, Climate Change and Us by Isagani Serrano, Philippine Rural Reconstruction Movement, September 2009.

Alternative Budget Initiative 2010


Alternative Budget Proposal for Environment 5. 6. 7. 8.

Justice to Cool the Planet by Isagani Serrano, Philippine Rural Reconstruction Movement and Social Watch. National Expenditure Program, Fiscal Year 2010. Powerpoint presentation material by Tony Oposa, Ramon Magsaysay Awards Foundation, September 2009. S&T Intervention on Climate Change by DOST-PCIERD, May 2009.

Alternative Budget Initiative 2010


Alternative Budget Proposal for Environment

Table I2. 2010 Budget Obligations for the Natural Resources and Environment Sector (in PhP '000) 2005 Actual 173,874,983 7,266,226

2006 Actual 196,945,207 7,570,118

2007 Actual 223,173,094 8,899,400

2008 Actual 359,090,648 10,275,344

2009 Adjusted 381,706,896 15,118,855

2010 Proposed 356,525,447 13,317,402







DENR Office of the Secretary Environment Management Bureau LRA Mines and Geo-Sciences Bureau National Mapping and Resource Info Authority DOST Forest Products Research & Devt Institute Budgetary Support to Government Corporations Laguna Lake Development Authority Natural Resources Devt Corporations Other Special Purpose Funds Agrarian Reform (DENR) AFMA Miscellaneous Personnel Benefits Fund Pasig River Rehab Commission Priority Development Assistance Fund Economic Stimulus Fund Compensation Adjustment Fund TOTAL Budget Sub-Sector: Natural Resource & Environment As percent of the Total Budget

6,240,072 5,191,945 286,547 450,253

6,282,798 5,146,430 337,646 484,060

7,457,216 5,616,223 395,321 544,329

9,918,138 7,014,662 434,077 772,872 568,148

12,758,388 9,629,651 698,561 707,400 661,439

10,753,134 1 10,666,342 8,063,788 640,814 673,172 573,409

311,327 64,349 64,349

314,662 65,568 65,568

901,343 73,910 73,910

1,128,379 106,637 106,637

1,061,337 85,315 85,315

715,159 86,792 86,792

121,135 51,135 70,000 840,670 840,670 947,553,728 7,266,226 0.77

1,221,752 355,742 166,707 450,403 248,900 1,053,277,000 7,570,118 0.72

1,368,274 570,790 30,000 224,264 543,220 1,126,339,000 8,899,400 0.79

28,251 18,251 10,000 222,318 222,318 1,314,613,561 10,275,344 0.78

2,275,152 495,546 769,941 9,665 1,000,000 1,426,001,790 15,118,855 1.06

2,714,268 150,000 1,376,932 1,180,396 6,940 1,541,000,000 13,317,402 0.86

Economic Services Sub-Sector: Natural Resource and Environment

Notes: 1. From NEP 2010 Table B.7a merged with Table B.12 2. Table B.12 identifies a Php 30 million fund under AFMA to be allocated to the DENR (2007) 3. Table B.12 identifies a Php 150 million fund under AFMA to be allocated to the DENR (2010)


Does not include obligations to the National Commission on Indigenous Peoples and to the Palawan Sustainable Council for Development.

Alternative Budget Initiative 2010


Alternative Budget Proposal for Environment

Table I3. 2010 Budget Summary - DENR (in PhP '000)

New and General Appropriations Automatic Appropriations Continuing Appropriations Budgetary Adjustments Total Available Appropriations/ Total Obligations


Office of the Secretary







10,660,229 664,050 -

7,744,903 318,885 -

589,849 50,965 -

454,450 218,722 -

542,522 30,887 -

579,874 30,801 -

703,350 11,809 -

45,281 1,981 -









Table 14. 2010 Capital Outlay Budget for DENR; in terms of Total Obligations; (in '000) Environmental Management Bureau -

Mines and Geo-Sciences Bureau -




Investment Outlay


Office of the Secretary -

Land and Land Improvements Outlay Buildings and Structures outlay

17,000 19,785

17,000 -






Office Equipment Furniture and Fixtures Transportation Equipment Machineries Equipment Public Infrastructures Reforestation Projects

540,300 185,021 1,326,847

534,500 1,326,847

159,146 -

25,875 -


5,800 -


TOTAL 2010 (fell by 30.2%)








2009 (grew by 145.7%)
















Alternative Budget Initiative 2010


Alternative Budget Proposal for Environment

Box 1. Summary of Updates on Financing “Green Bottomlines” ABI-Environment Thematic Areas Fast-tracking of delineation and demarcation activities towards instituting a national land use plan by 2010

Status/Updates In 2008  Additional P30 M Forest Boundary Delineation and Land Use Allocation  Additional P10 M Land Surveys In 2009  Additional P5 M for Land Surveys  Additional P40 M for map production and remote sensing surveys

Conservation and Protection of Natural Resources and Biodiversity Hotspots

In 2008  Additional P115 M for community based forest management from PDAP of Cong. Lagman  Additional P2 M Protected Area Management  Additional P5 M Ecosystems Research and Development for Coastal Resource Management  Additional P9 M Rehabilitation of Lakes Laguna, Sebu, Sampaloc  Additional P5 M Environmental Education and Information under Environment Management Bureau In 2009  Adopted P1.3 B reforestation project in 2009  Adopted P1 B the Bantay Gubat and Bantay Kalikasan fund from the economic stimulus fund  Adopted P70 M Recycling of Agriculture and Forest Products from the economic stimulus fund  Adopted P20 M each for Tubbataha Reef and Apo Reef  Adopted P15 M each for Mt. Banahaw/Cristobal, Northern Negros National Park, Central Cebu National Park  Adopted P10 M for Mt. Kitanglad  Adopted P3 M for Ecosystems Studies in Palawan  Adopted P7 M for CRM Learning Sites  Additional P250 M for Soil and Watershed Management  Additional P10 M for Protected Area Management  Additional P15 M for Mt. Apo National Park  Additional P4 M for Pawikan Conservation Project  Additional P20 M for Tamaraw Conservation Project For 2010  Adopted P1.3 B for reforestation

Strengthening monitoring and regulation on environmentally critical activities such as mining

Alternative Budget Initiative 2010

There has not been any financing support provided for this item.


Alternative Budget Proposal for Environment

Review, revitalization & strengthening of the Philippine Council for Sustainable Development (PCSD)

There has not been any financing support provided for the PCSD.

Allocation for un/ill-funded critical laws on the environment such as laws on clean air, clean water, management of ecological waste, toxic wastes and other bio-hazards

In 2009  Adopted P20 M for the implementation of the Ecological Solid Waste Management  Adopted P49.7 M for the implementation of the Clean Water Act  Additional P15 M for the Pollution Adjudication Board

In 2010  P8.7 M for Ecological Solid Waste Management *additional – increase/augmentation in funding support *adopted – new budget items included in the GAA

Table 15. Potential Climate Change Action Measures (in PhP ‘000)2 Renewable/Sustainable Energy Systems Department of Energy A. Programs II.b.1. Formulation of policies on energy information technology and data management II.c.1. Formulation of short, medium and long term national and regional energy plans II.d.1. Formulation of programs in support of exploration and development of energy resources through research and scientific, physical and calibration testing III.a. Direction and Control of Energy Resources Development III.b Direction and Control of Energy Utilization and Conservation III.d Electric Power Industry Management and Control III.e. Direction and Control of Renewable Energy Exploration, Development and Utilization III.h National Biofuels Board III.i National Renewable Energy Board

Biodiversity, Sustainable Agriculture, Fisheries and Forestry Office of the President o. Bicol River Basin Watershed Management Project Department of Agriculture: Office of the Secretary A. Programs I.a.1.g. Water Management & Soil Conservation & Development II.a.2 Formulation of programs, standards and guidelines for soil and water resources conservation, management and development (BSWM) II.a.3 Isolation, production & quality testing of soil inoculants (BSWM) II.a.4 Water resources planning, development and management incl. the repair and maintenance of water impounding systems and the operation and establishment of Agro-Hydro Meteorological stations


14,436 46,736

16,559 17,607 67,529 55,336 17,789 22,407 5,362

11,477,700 21,314 11,548 28,288 215



This Table is a result of a cursory review of the 2010 NEP. It is not necessarily a comprehensive list but provides indicative elements related to financing climate change initiatives.

Alternative Budget Initiative 2010


Alternative Budget Proposal for Environment (BSWM) II.a.5 Water management and soil conservation (BSWM) III.a.11.b Promotion and Devt of Organic Fertilizer III.e. Implementation of Various Agricultural Research Projects B. Projects: Locally Funded I.a.3. Small Reservoir Irrigation Projects, Nationwide I.a.4. Repair, Rehab, Establishment of Groundwater/IP Project Agricultural Production and Improvement and Environmental I.a.16. Conservation in Lubang

60,772 500,000 208,500 350,000 30,000 Subtotal

DA Bureau of Fisheries and Aquatic Resources A. Programs II.a.1 Legal, advisory and technical services on aquaculture, fishing technology, post harvest, fisheries resource studies and management II.a.2 Economic studies, policy formulation, and planning services II.a.4 Support to the observance of Fish Conservation Week III.a.1 Development of fisheries and aquatic resources III.a.2 Conservation, regulation and protection of fisheries and aquatic resources III.b.16 National Fisheries Research and Development Institute Subtotal Department of Environment and Natural Resources DENR Office of the Secretary Mines and Geo-Sciences Bureau National Commission on Indigenous Peoples National Mapping and Resource Information Authority Palawan Council For Sustainable Development Subtotal Department of Science and Technology Forest Products Research & Development Institute Philippine Council for Agriculture, Forestry and Natural Resources Research and Development Philippine Council for Aquatic and Marine Research and Development Subtotal Other Executive Offices: National Water Resources Board

Clean and Green Industrial Technology DOST: Philippine Council for Industry and Energy Research & Development

Ecological Waste Management DENR: Environmental Management Bureau A.II. Support to Operations Planning and Policy Formulation Environmental Education and Information Pollution Adjudication Board Pollution Research and Lab Services A.III. Operations Environmental Management and Pollution Control Toxic Substance & Waste Management B. Projects: Locally Funded Water Quality Monitoring and Community Based Waste Management Project - Pasig River Rehab Implementation of Ecological Solid Waste Management Act

Climate Change Adaptation Measures (Disaster Response) Office of the President q. Off of the Presidential Adviser on Global Warming and Climate Change Department of Science and Technology

Alternative Budget Initiative 2010

24,000 1,221,600

8,940 5,597 236 134,353 10,425 64,130 223,681 7,744,903 542,522 579,874 703,350 45,281 9,615,930 81,921 263,976 34,611 380,508 35,981

42,744 42,744

518,312 1,930 12,926 7,826 68,503 352,028 65,767 600 8,732

6,033,981 45,000


Alternative Budget Proposal for Environment Philippine Atmospheric, Geophysical and Astronomical Services Administration Allocations to LGUs: Metro Manila Development Authority A.I.a. Metro-wide Services as stipulated under Section 3 of R.A. No. 7924: Solid Waste Disposal & Management A.I.c. Operational Support, Maintenance, Repair and Rehab of Flood Control & Drainage Systems, Structures and Related Facilities B.I.b. Urgent Disaster Flood Control Works under the Pasig-San JuanMarikina River System & Other Areas in Metro Manila B.I.c. Flood Control and Drainage Projects – NCR B.I.d Mitigating flooding at Buendia/South Superhighway area & vicinity Subtotal Allocations to LGUs: Pasig River Rehabilitation Commission Calamity Fund



846,599 51,750 50,000 58,000 100,000 1,106,349 1,179,861 2,000,000


Working Towards Renewal and Reform in Governance, Economy, Living Environments and Global Relationships

Alternative Budget Initiative 2010


Alternative Budget for Health


There are a lot of challenges in the Philippine public health sector. Some of the outstanding features of these include combating various illnesses, poor quality of health facilities, exodus of medical professionals abroad, geographic maldistribution of health resources, and a health system dominated by out-of pocket payments. The continued failure to improve on health delivery has both economic and social implications. For one, an unhealthy population deprives the individual in achieving optimum productivity which could have been contributed in achieving the country's development goals. On the social side, these have caused hundreds of thousands trapped in poverty and resulted in loss of lives. Further, this dismal performance even compromised its compliance to international commitments such as the Millennium Development Goals. Latest MDG Philippine Progress Report acknowledges that among the MDG targets, those directly related to health are the least likely to be met. Progress has been either slow or stagnating, while gains run the risk of reversal. The Philippines has the worst health performance in Asia, with infant mortality rate (IMR) and maternal mortality rate (MMR) being among the highest in the region. Infant and Maternal Mortality. The country's state of maternal health is alarming, with MMR barely moving in the last five years and worsening in many poor provinces. Key maternal interventions have not improved across the years, with eleven mothers dying each day because of childbirth and pregnancy complications. Many women still deliver without skilled birth attendant. Of the total 87.6% of pregnant women who sought prenatal care from a health professional (NDHS, 2003), only 59.8% of all births were attended by a health professional during delivery. Considering that most deaths occur during the first 72 hours postpartum, 2003 NDHS reported that 34% did not receive post natal check-up at all. Delivery in a health facility is only at 38% of live births. While there is a decline in the percentage of births delivered at home at 66 percent (1998 NDHS), still a large 61% represents delivery at home. Only half of the Filipino mothers are aware of danger signs of complications and where to go in case of complications. About 3.1 million pregnancies occur each year and nearly half of these are unintended and about one-third ends up in abortion. Abortion reached a total of 473,000 cases majority of whom are married women who have 2-3 children. Teenagers account for 17 % of these cases. Abortion resulting from complications remains the third leading cause of hospital discharges and has become the fourth leading cause of maternal mortality, representing 12% of all maternal deaths.

Alternative Budget Initiative 2010


Alternative Budget for Health

Efforts to significantly reduce maternal mortality should be doubled in order to hit the target of reducing maternal deaths to 52 deaths by 2015 from 162 deaths per 100,000 births. Unmet Family Planning Needs. Family planning will reduce unintended pregnancies, therefore lowering chances for women resorting to induced abortion. Filipino women have consistently had one more child than they wanted (NDHS 2003). An average Filipino woman wanted 2.5 children but had actually 3.5 children, higher among rural women at 4.3 compared to urban women at 3.0. The difference between the desired and actual number of children translates to about 800,000 unintended births. There is an unmet need for family planning and is even higher among the poor. The total unmet need for family planning is 15.7%. The unmet need among those from the lowest quintile is 26.7% almost doubled the 12.4% among the highest quintile. Until 2006, USAID had been shouldering 80% of the total requirements for family planning commodities, with an estimated amount of U$3M annually for 36 years. National government counterpart came in the form of payments for freight and shipment from the international source to Metro Manila and then to the provinces and cities. The LGUs, until now, shoulders the transport down to the municipal level. Maternal mortality could drop by 20-35 percent given access to full information, options and effective contraception. Child Mortality. The Philippines is reportedly on track to meeting the goal of reducing under-five mortality, claiming a likelihood of meeting the target of 26.7 deaths per 1,000 live births by 2015. Deaths among young children have continued to decline. Under-five mortality rate (UFMR) dropped from 48 per 1,000 live births (LB) in1998 to 42 deaths in 2003 and falling further to 32 deaths per 1,000 LB in 2006. Of the total under-five deaths (42/1,000LB), more than two thirds (29/1,000 LB) occur before the children turn one year old. Of these, majority (17/1,000) die within 28 days upon birth, occurring mostly within the first week. Neonatal and post-neonatal death, which makes up 71.4 % of under-five mortality, registered the barest improvements over the past two decades. The combined number of deaths during the neonatal and postneonatal period is almost thrice the number of deaths among 1-4 years old (12/1,000LB). The improvement in the national averages of child health outcomes—in terms of lower infant and child mortality rates—has been attributed to the immunization program of the government. However, the proportion of fully-immunized children dipped from 71.5% in 1993, to 72.8% in 1998 to 69.8 % in 2003. This figure is still lower than the 95% target for the year.

Alternative Budget Initiative 2010


Alternative Budget for Health

Under-five mortality, maternal death and the slow decline in MMR are consequences of wide disparities in access to essential social services. Acute disparities, which tended to be hidden in national averages, manifest across regions. ARMM, Mimaropa, Eastern Visayas, Bicol and the Zamboanga islands have very high maternal and child mortality rates and the highest malnutrition rate in the country. Rich areas pull up national averages, failing to capture the reality of poverty, inequity and the poor health conditions in these areas. Tuberculosis. In its 2008 Tuberculosis Control report, the World Health Organization (WHO) recorded that the Philippines ranked ninth globally for incidences of TB while it was ranked fourth in the Western Pacific Region. The country is second in the region for Multi-Drug Resistant cases. TB is the country’s sixth leading cause of mortality.

Table 16. 2010 Proposed Budget, DOH and Attached Agencies (in thousand pesos) Department of Health DOH Proper 23,737,695 Commission on Population 267,368 National Nutrition Council 3,868,950 Attached Corporations Lung Center of the Philippines 157,560 National Kidney and Transplant Institute 185,000 Philippine Children’s Medical Center 237,000 Philippine Heart Center 185,000 Philippine Institute of Traditional and Alternative Health Care 40,000 Allocation to Local Government Units Premium Subsidy to indigents under the NHIP 5,000,000 Total 33,678,483

Tuberculosis remains as one of the top ten killer diseases in the Philippines today. Yearly, some 70,000 Filipinos die from this infectious and communicable disease. It is a disease that is said to infect 6 in every 10 Filipinos and claims one life every 20 minutes. NEDA report noted that achieving the target by 2015 to halt the incidence of TB has a low probability. Rabies. The Philippines ranked number six among the countries with the highest reported incidence of rabies in the world. DOH recognizes that although rabies is not among the leading causes of disease and death in the country, it has become a considerable public health problem since it has been the cause of death for 200 to 500 Filipinos annually due to acute fatal infection. While exposure to rabies is extremely fatal, it is also preventable by providing immediate post-exposure prophylaxis (PEP) to all animal bite patients. Hazardous Hospital/Medical Wastes. The proper disposal of waste generated by health care facilities is of special public health concern. Significant portion of these wastes is considered hazardous requiring special treatment and disposal procedures. Because of the harm infectious medical waste pose to public health, it is legally required of health care facilities in the Philippines to first treat their waste prior to disposal in a landfill.

Alternative Budget Initiative 2010


Alternative Budget for Health

Most of the hazardous waste produced by hospitals are infectious medical waste containing pathogens (bacteria, viruses, parasites or fungi) that are direct byproducts of health care activities that protect and save lives, i.e., immunization, laboratory examinations, amputations, and diagnostic tests. Infectious medical waste include discarded syringes, disposable scalpels, anatomic waste, and wound dressings. If improperly disposed, these may expose health care workers and the larger community to infectious diseases. Until recently, Philippine hospitals dealt with infectious medical waste primarily through incineration. The suitability of incineration has been challenged since it has been identified as the single largest source of dioxin air pollution. They also generate highly contaminated ash. It is scientifically acknowledged that these pollutants have serious negative impacts on the health of incineration plant personnel, the public and the environment. In 1999, the Philippine Congress passed Republic Act 8749 or the Philippine Clean Air Act of 1999 banning incineration of medical waste and to shift to non-incineration treatment technologies. Phase out of Mercury in all Government Hospitals. Keeping abreast with the global health care sector call, as articulated by the World Health Organization (WHO), which called for short, medium and long term measures to substitute mercury-based medical devices with safer alternatives to replace mercury-based medical devices with affordable, accurate and safer alternatives, the Department of Health (DOH) issued DOH Administrative Order No 2008-0021 ordering the “Gradual Phase-out of Mercury in all Philippine Health Care Facilities and Institutions. The Philippines in 2008 is calling for the phase-out of mercury based medical devices across the country by 2010. Likewise, the Philippine Health Insurance Corporation (PhilHealth) revised its accreditation policy and ordered non-accreditation of non-mercury free hospitals. Mercury, one of the world’s ubiquitous heavy metal neurotoxicants, has been an integral part of many medical devices, most prominently thermometers and sphygmomanometers. These devices break or leak with regularity, adding to the global burden of mercury in the environment and exposing health care workers to the acute effects of the metal. Human Resource Issues in the Public Health Sector. The exodus of health workers abroad has caused unspeakable impacts to the delivery of health services especially to remote areas. To mitigate this trend the DOH has initiated various deployment and placement programs to promote a more equitable distribution of human resources in the country such as the Doctors to the Barrios Program, the Medical Pool Placement and Utilization Program, Specialist to the Province and more recently the Midwifery Deployment Program. These initiatives however have not taken off significantly due to budgetary limitations which do not allow for competitive employment packages for health professionals.

Alternative Budget Initiative 2010


Alternative Budget for Health

Further, Republic Act 7305 or the Magna Carta for Health Workers mandating a host of benefits, including hazard pay, laundry allowance, subsistence allowance, holiday pay, and even remote allowance or medico-legal allowance for government doctors remain meaningless as financial resources for its implementation remain wanting. Highlights and Salient Features of Proposed 2010 Budget The Department of Health (DOH) and its attached agency is proposing for a total budget of P33.7 billion for 2010 (see Table 16). From this, P23.74 billion is allocated to the DOH Office of the Secretary. The P33.68 billion proposed health budget accounts for only 2% of the total government budget of P1.54 trillion. While the proposed 2010 budget for health increased by almost P70.95M compared to 2009, its share of the national budget has actually shrunk to 2.0 % compared to this year’s share of 2.2%. Table 17. Priority Programs in 2010 Proposed Budget With the projected increase in population, the proposed DOH Proper budget of P23.7 billion is translated to about P252.49 per person. Factoring inflation rate, the meager increase is still not enough.

Activity Attainment of the MDGs in terms of the reduction in MMR, IMR, TB/Malaria/HIV-AIDS cases and increase access to safe drinking water Complete requirements for upgrading of primary, Secondary hospitals Additional requirements for BEmONC/CEmONC Increasing access to cheap quality medicines Increasing human resource Response to AHINI and other emerging/reemerging Support for the roll out implementation of F1 nationwide Upgrade of DOH hospitals, laboratory and drug Renovation of central office and CHD facilities Upgrade of ICT Upgrade of FAPs

Budget (in P Bn) 4.998 3.202 0.503 1.000 0.153 0.544 0.659

The level of 0.605 government health 0.127 expenditure has not 0.150 changed. DOH 0.418 budget as a portion of the total government appropriation fell from 2.5 percent in 1999 to 1.1 percent in 2006, one percent in 2007, 1.3 percent in 2008, 2.2 in 2009 and 2.0 percent in 2010. There is a decrease of 0.2 percent from 2.2 percent in 2009. The DOH health budget in 2009 ranked 5th among all the executive departments but slid to sixth in 2010. The proposed budget will essentially finance the following priority thrusts and activities listed in Table 17.

Alternative Budget Initiative 2010


Alternative Budget for Health

In terms of function, the pattern of DOH budget distribution has not changed over the years. Hospital services consistently account for the biggest share of 50 percent followed by public health service allocation at 36 percent.

Table 18. Allocation by Function Function Amount Hospitals Public Health Governance Regulation

P11.61 B P 8.65 B P 8.65 B P1.52 B

% Share 50% 36% 8% 6%

Putting more allocations for public health service delivery is believed to directly bring upon an improvement in the health status of the poor and low-income groups. In addition, better public health programs will reduce hospital workloads. Expenditures on public health interventions is deemed critical in ensuring that the MDG health targets are met, as well as that the equity considerations in health care delivery are fulfilled. In terms of geographic allocation, NCR and Luzon still gets the higher share. The country’s share of health spending is nowhere near the recommended spending for healthcare sector, which is five percent of the GDP. The government should be made to cover a much larger share in the total health expenditure. More than fifty percent of health spending of Filipinos today is mainly financed through out-of-pocket. Government health spending remained far from the health Sector Reform Agenda (HSRA) target. The share of government on health expenditure declined to 30 percent (16 % national and 14% local) which is below the target of 40 percent based on the HSRA. Also, the government’s target to depend less on out-of-pocket payments and provide more social health insurance is still far from being realized as the share of out-ofpocket payments even increased to fifty percent while the share of social insurance increased slightly to 11 percent. Based on the HSRA, the target for out-of-pocket is 20 percent while the target for social insurance is 30 percent. The high out-of-pocket expenditures and the overall low-level of health spending is the most undesirable mixed source of financing health. Underinvestment in health deny vulnerable sectors’ access to quality services, makes poorer people more ill, heightens lack of financial protection and drive impoverished households to catastrophic poverty. The success of the immunization program is expected to accelerate once the country is vaccine self-sufficient. According to the RITM, if the country could manage to locallyproduce its own vaccine, a cost reduction of 20 to 30 percent is projected to be attained since it will significantly reduce the cost of procuring vaccines. Moreover, it would also help ensure adequate supply of vaccines by stimulating local manufacturing of vaccines.

Alternative Budget Initiative 2010


Alternative Budget for Health

FY 2010 Alternative Budget Proposal for Health In light of the current health situation and the limitation of the Philippine health delivery system to service the increasing health needs of the population, the ABI proposes the following alternative budget that seeks to better equip the public health system to respond to people’s needs. Table 19. Alternative Budget Proposal for Health

Budget Item

GAA 2009


ABI Proposal

Variance (ABI Proposal less NEP)

1. Environmental and Occupational Health





2. Expanded Program on Immunization/EPI





3. Rabies Control





4. TB Control





5. Family Health including Family Planning





6.Elimination of Diseases as Public Health Threat e.g. malaria, schistosomiasis, leprosy, Filiariasis 7. National Epidemiological and Disease Surveillance



8. Autoclaves Non-mercurial sphygmomanomet er & thermometers

Alternative Budget Initiative 2010







100,000,000 28,050,000

100,000,000 28,050,000


Alternative Budget for Health

Budget Item

GAA 2009

9. Research Institute for Tropical medicine 10. Health Human Resource Development/Impl ementation of the Rural Health Practice Program to the Barrios 11.Magna Carta for New Line Health Workers Item 12.Implementation New line item of the Philippine Nurses Act


ABI Proposal

Variance (ABI Proposal less NEP)













Explanatory Notes: 1. Environmental and Occupational Health. Additional Php 50M for capital outlay for upgrading of water laboratories at regional and provincial levels, and to capacitate regions to run toxicology centers monitoring mining and aerial spraying activities. This amount will capacitate the following hospitals: (Davao Medical Center, East Avenue Medical Center, Baguio General & Medical Center and Vicente Sotto Sr. Memorial Medical Center. 2. Additional amount of PhP 300,000.00 for the introduction of new vaccines such as MMR, HIB and booster dose of DPT, and purchase of syringes for the 5th and 6th class LGUs. 3. The amount of PhP 50 Million to provide additional 40% of the needed anti rabies vaccine for rabies victims projected at 146,000 for 2010. The 2010 NEP allocation for this is only at 55%. ABI further proposes that dog vaccination shall constitute as LGU counterpart in this area. 4. This PhP 187,015,000 for TB control would also allow for a critical shift from facility-based approach to an active case finding strategy. 5. Family Health including Family Planning. Pregnancy and childbirth continue to pose risks to Filipino mothers and their newborns. Rapid reduction in these risks

Alternative Budget Initiative 2010


Alternative Budget for Health

must be realized as quickly as possible. Variations in health outcomes and program performance across localities and population groups warrant targeted and locally-customized interventions in order to meet the rapid reduction goal. The risk of maternal and neonatal deaths for a given population group is magnified with critical accumulation of the following four risks: (1) risk of having mistimed, unplanned and unsupported pregnancy; (2) having become pregnant exposes the mother and the fetus to the risk of not securing adequate care during the course of the pregnancy; (3) risk of delivering without being attended to by skilled midwives, nurses and physicians, and of not having access to emergency obstetrics and neonatal care services; and (4) risk of not securing proper postpartum and postnatal care for the mother and the neonate, respectively. 6. Elimination of diseases as public health threat. Restoration of the budget to 2009 level, or an increase of P40M vis-Ă -vis NEP for capital outlay to be used for procurement of stereoscopes and microscopes. These equipments are needed in the surveillance and evaluation as well as validation of areas targeted for the elimination of the four diseases namely: Malaria, Filariasis, Schistosiamsis and Leprosy. 7. Restoration of the budget to 2009 level or an additional Php20 Million vis-Ă -vis NEP to be used for high quality and multi-disciplinary research programs to contribute significantly to the control of infectious and tropical diseases. 8. ABI proposes an increase of PhP 128,050,000.00 for the procurement of autoclaves (PhP 100 million) and mercury-free thermometers (PhP28.05 million). 9. Additional PhP250 million in support of the Research Institute for Tropical Medicine's Vaccine Self-Sufficiency Project. Support local production of vaccines for diphtheria, pertussis, polio, BCG anti-rabies, antivenin, anti-tetanus serum, tetanus toxoid among other vaccine for preventable diseases that usually affect children. 10. Additional PhP160 Million for the Implementation of Rural Health Practice Program. Integral aspect of this program is providing scholarships for doctors & midwives (return service) and employment. Despite 80 items for Doctors to the Barrios, 121 municipalities are still without doctors. This is to promote equitable distribution of health workforce all over the Philippines; and to fast track the achievement of reducing maternal and infant mortality rates. Deployment of midwives and doctors will be targeting the lowest performing municipalities. 11. Creation of a new budget line item for the implementation of Magna Carta for Health Workers amounting to PhP 1,011,534,996.00. The Magna Carta for Health Workers or Republic Act 7305 was passed in 1992. It mandates a host of benefits including hazard pay, laundry allowance, subsistence allowance, holiday pay, and even remote allowance or medico-legal allowance for government doctors. 12. The proposed PhP 586,438,132 is to fund a new item for the implementation of the Philippine Nurses Act of 2002. It will cover the 12,210 nursing positions in the National Government amounting to PhP 545,644,323 and the 1079 nursing positions in Specialty Hospitals amounting to PhP40,793,809.

Alternative Budget Initiative 2010


Summary of Alternative Budget Proposals




Amount 9,684,520,000 3,348,405,128

Sub-Total Social Services






Sub-Total Economic Services



Alternative Budget Initiative 2010




Summary of Alternative Budget Proposals

Alternative Budget Initiative 2010


Details Office Of the President Presidential Anti-Organized Crime Commission Proper which includes P500 million for confidential and intelligence expenses to be released upon "approval of the President" B.I.g.1 General Management and Supervision, including P150 million for confidential and intelligence expenses to be released upon approval of the President I.a.1 Conduct of special missions as may be directed by the President II.c.1 Office of the Vice President Ceremonial functions and technical services, including P6 million for confidential and intelligence expenses to be released upon approval of the President II.a.1 Department of Agriculture III.a.11.a GMA Rice-OSEC III.a.12


III.a.16.a GMA High Value Commercial Crops--OSEC III.b.6.a GMA Livestock - OSEC Department of Budget and Management Completion of DBM Buildings I and II B.I.a.2 Kalayaan Barangay Program Fund For the Requirements of the Kalayaan Barangay Program A.1 Kilos Asenso Support Fund For NG counterpart fund to support the programs and projects of LGUs under the Kilos Asenso Movement A.1 Contingent Fund

Fund subsidies for contingencies A.1 E-Government Fund For major information and communication technology projections A.1 Priority Development Assistance Fund Support for Priority Programs and Projects A.1 Unprogrammed Fund A.2


NEP Amount


NEP Page

Cut at least P500 million intellignece fund from the 521,190,000 MOOE Cut at least P150 million of intelligence fund and P350 million from the P923.166 million MOOE which is very 1,302,235,000 high 6,762,000 Cut from MOOE

33 highly 33 highly 33 highly 34 66


Discretionary/ presidential 1,000,000,000 pork Delete special provision which includes cost of local and foreign travels of the 800,000 President








No clear mechanism on use; 2,000,000,000 highly discretionary; No clear mechanism on use; highly discretionary; no details of projects; no special Support to Infrastructure Projects and Social provisions to govern release Programs 30,500,000,000 and use; TOTAL 50,558,509,000 Strategic Government Reforms



120,000,000 Defer for succeeding years Discretionary/ 1,000,000,000 pork

11 11

Cut at least P6 million 147,776,000 intelligence fund from MOOE Lumpsum; 3,131,602,000 discretionary Lumpsum; 658,422,000 discretionary Lumpsum; 1,754,011,000 discretionary Lumpsum; 475,711,000 discretionary




Annex: Fast Facts on the Environment

ANNEX A. FAST FACTS ON THE ENVIRONMENT Risks and Disasters In 2005, the Manila Observatory in cooperation with the DENR conducted a study titled Mapping Philippine Vulnerability to Environmental Disasters. This study produced two sets of Risk Maps, Climate and Weather-related risk maps and Geophysical risk maps related to earthquakes, induced landslides, volcanic eruptions and tsunamis. The “Philippine Climate and Weather-related Risk Map” presented in the first page of the report shows the combined risks to disaster in terms of projected rainfall change, temperature increase, typhoons and El Niñoinduced drought. This map represents the sum of the normalized, provincial-level risks to typhoons, (super typhoons, typhoons, tropical storms and tropical depressions) drought caused by El Niño, projected rainfall change and projected temperature increase. The top ten provinces in terms of risk are: Albay, Pampanga, Ifugao, Sorsogon, Biliran, Rizal, Northern Samar, Cavite, Masbate, and Laguna. In general, the regions of Central Luzon and Bicol rank high to very-high on the risk scale. Reports of environmentrelated disasters often provide a wake-up call for government. However, focus is understandably given only to current disasters and responses to these are almost always reactive in nature. Below is a listing of the Top 10 disasters in the country from 1999-2009.1 The next two Tables show that in the past ten years a total of 32.6 million Filipinos have been affected by

Top 10 RP disasters 1999-2009, sorted by total number of affected people Disaster Date Total Affected Storm 12/11/1990 6,159,569 Storm 21/06/2008 4,785,460 Storm 21/10/1998 3,902,424 Storm 27/09/2006 3,842,406 Drought Apr-98 2,600,000 Storm 30/11/2006 2,562,517 Storm 28/10/2000 2,436,256 Storm 28/06/2002 2,278,386 Flood 30/07/1999 2,099,763 Storm 4/10/1993 1,941,566 TOTAL 32,608,347

Top 10 RP disasters 1999-2009, sorted by economic damage cost Damage (in Disaster Date `000 US$) Flood 4/9/1995 700,300 Storm 12/11/1990 388,500 Earthquake (seismic activity) 16/07/1990 369,600 Storm 21/06/2008 284,694 Storm 3/11/1995 244,000 Volcano 9/6/1991 211,000 Storm 4/10/1993 188,000 Storm 2/8/2006 135,000 Storm 27/09/2006 113,000 Storm 5/11/1991 100,000 TOTAL 2,734,094


From EM-DAT: The OFDA/CRED International Disaster Database, - Université catholique de Louvain - Brussels - Belgium

Alternative Budget Initiative 2010


Annex: Fast Facts on the Environment

environment-related disasters with an economic damage cost estimated at UsD 2.7 billion or PhP 131.2 billion. Green House Gas (GHG) Emissions2 The Kyoto Protocol lists six green house gasses that must be reduced dramatically. These are Carbon dioxide (C02), Methane (CH4), Nitrous oxide (N20), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs) and Sulphur hexafluoride (SF6). It also lists the sectors\source categories of these GHGs. These are energy, industrial processes, solvent and other product use, agriculture and waste. Below are charts representing the Global Anthropogenic GHG emissions by gas and by sector.

PHILIPPINE GHG EMISSION (1994) This chart is the Philippines’ GHG Waste inventory in 1994.3 Industry 9% The chart shows 10% that the energy Energy sector accounts for 49% 49 percent of the total GHG emission Agriculture of the country while 32% agriculture accounts for 32 percent. Creating alternatives for climate change actions, thus revolves around shifting to environmentally sustainable, climate resilient and low carbon development within these sectors. 2

IPCC Assessment Report 4, 2007 Included in the Initial National Communication (INC) of 1999 submitted to the United Nations Framework Convention on Climate Change (UNFCCC). 3

Alternative Budget Initiative 2010


Annex: Fast Facts on the Environment

With our geographic location as a tropical country, the Philippines is naturally prone to climate change. This is aggravated by a development path that continues to be climate insensitive, which the Philippine Government has unfortunately taken.


The ALTERNATIVE BUDGET INITIATIVE – ENVIRONMENT CLUSTER is a part of the Budget Advocacy Campaign led by the Social Watch Philippines. The Cluster is composed of advocates and organizations engaged within the environment. Cluster members include: Alyansa Tigil Mina, AMRSPJPICC, Earth Savers Movement, EcoWaste Coalition, Foundation for the Philippine Environment, Haribon Foundation, Healthcare without borders, Kilusan Para sa Makatarungang Lipunan at Gobyerno (KMLG), No-Burn Coalition, Partido Kalikasan Institute (PKI), Partnership for Clean Air (PCA),

Alternative Budget Initiative 2010


ALTERNATIVE BUDGET CONSORTIUM Convened by Social Watch Philippines                       

Action for Economic Reforms (AER) Akbayan Partylist Alternate Forum for Research in Mindanao (AFRIM) Alyansa Tigil Mina (ATM) AMRSP-JPICC Anthrowatch Bukluran – Pamantasan ng Lungsod ng Maynila Centro Saka Inc. (CSI) Davao Provinces Rural Development Institute (DPRDI) Earth Savers Movement (ESM) Ecowaste Coalition Education Network Foundation for the Philippine Environment Global Call to Action Against Poverty – Philippines (GCAP-Phils) Haribon Foundation Healthcare without borders Health Care Without Harm (HCWH) Institute for Popular Democracy Institute of Public Health Management (IPHM) Integrated Rural Development Foundation (IRDF) Kaisampalad, Inc. Kilusan Para sa Makatarungang Lipunan at Gobyerno (KMLG)

KOOL NE Kooperatibang Likas ng Nueva Ecija

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La Liga Policy Institute

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Medical Action Group (MAG) No-burn Coalition Non-Timber Products Task Force Oxfam Great Britain Pambansang Kilusan ng Kababaihan Sa Kanayunan Partido Kalikasan Institute (PKI) Partnership for Clean Air (PCA) Philippine Federation for Environmental Concern (PFEC) Philippine Network on Climate Change (PNCC)

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Management and Organizational Development for Empowerment (MODE)

Philippine Network of Rural Development Institutes (Philnet-RDI) Philippine Rural Reconstruction Movement (PRRM)

Piglas Kababaihan (PK) Public Services Labor Independent Confederation (PSLink) Rice Watch and Action Network SBSB Foundation Southeast Asia Regional Initiatives for Community Empowerment (SEARICE) Sustainability Watch Tambuyog Development Center Tanggol Kalikasan Teachers and Employees Association for Change, Education Reforms and Sustainability (TEACHERS)

Technical Assistance Center for the Development of the Rural and Urban Poor (TACDRUP)

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United Antipolo Unlad Kabayan WomanHealth Philippines (WHP)

Food Sovereignty Watch in Mindanao (FSW)

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In partnership with Minority Legislators led by:  Minority Floor Leader Ronaldo Zamora  Representative Teofisto Guingona III  Representative Darlene Antonino – Custodio  Representative Ana Theresia HontiverosBaraquel  Representative Roilo Golez Liberal Party Congressmen led by:  Representative Lorenzo Tañada III Senators:  Senator Alan Peter Cayetano  Senator Pia Cayetano  Senator Panfilo Lacson  Senator Loren Legarda  Senator Jamby Madrigal  Senator Aquilino Pimentel, Jr.  Senator Mar Roxas  Senator Benigno Aquino III With the support of: Representative Edcel Lagman, Representative Alfonso V. Umali Jr., Staff of Congressional Planning and Budget Department, Staff of Senate Economic Planning Office

SOCIAL WATCH PHILIPPINES. Address: No. 40 Matulungin Street, Brgy. Central, Quezon City. Contact Numbers: +63 02 4265626 / 4265632 • Email: Website:

2010 Alternative Budget Initiative  
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