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The 2014 Budget

BY: Professor Emeritus Leonor Magtolis Briones U.P. National College of Public Administration and Governance Lead Convenor, Social Watch Philippines Chair, People’s Public Finance Institute 2014 Budget Analysis Forum Malcolm Hall Auditorium University of the Philippines, Diliman February 28, 2014


WHAT THE 2014 NATIONAL BUDGET LOOKS LIKE The Budget is like a huge, huge box. When it is opened, there are smaller boxes.

National Expenditure Program Ph2.264 trillion

General Appropriations Act Ph1.4 trillion

Automatic Appropriations Ph796 billion


The first smaller box is composed of two even smaller boxes: the budgets of agencies and the special purpose funds. in the first of the two smaller boxes are the agencies with the ten highest budgets

General Appropriations Act Ph1.4 trillion

Agency Budgets Ph 1.18 trillion

Special Purpose Funds Ph 282.5 billion


The Box on the Agency Budgets Top 12 Agencies, FY 2014 (NEP, GAB, GAA) Congress spends practically all of its time on this box. Dept.

FY 2014 Proposed (NEP)

Ran k

(‘000)

FY 2014 GAB Houseapproved

Ran k

(‘000)

FY 2014 Approved (GAA)

Ran k

(‘000)

DepEd

281,751,791

1

281,751,791

1

281,774,247

1

DPWH

200,265,553

2

207,321,553

2

206,634,047

2

DILG

99,595,064

3

100,183,030

3

100,295,430

3

DND

82,195,121

4

82,195,121

5

82,265,071

6

DOH

80,807,312

5

85,123,939

4

84,356,933

4

DSWD

78,876,694

6

84,540,929

6

83,304,463

5

DA

69,473,867

7

68,576,751

7

68,596,751

7

DOTC

45,161,306

8

45,161,306

8

45,461,306

8

SUCs

34,650,625

9

34,650,625

9

35,934,625

9

DENR

23,359,611

10

23,359,621

10

23,345,621

10

DAR

20,002,768

11

20,002,768

11

20,002,768

11

DOLE

10,132,033

15

13,423,273

12

12,177,273

12

Source: GAA 2012-2014; FY 2014 General Appropriations Bill (HB 2630)


The Box on Special Purpose Funds is of special interest to civil society. SPECIAL PURPOSE FUNDS

2014 National Expenditure Program

2014 Gen. Appropriations Act

Budgetary Support to Government Corporations

46,696,697,000

46,255,210,000

Allocation to Local Government Units

19,705,022,000

19,588,843,000

National Disaster Risk Reduction Management Fund (formerly Calamity Fund)

7,500,000,000

13,000,000,000

Contingent Fund

1,000,000,000

1,000,000,000

DepEd School Building Program

1,000,000,000

1,000,000,000

E-Government Fund

2,478,900,000

2,478,900,000

International Commitments Fund

4,815,644,000

4,815,644,000

80,713,614,000

53,535,086,000

120,495,952,000

120,495,952,000

-

20,000,000,000

25,240,000,000

0

400,000,000

400,000,000

310,047,901,0002

282,569,635,000

Miscellaneous Personnel Benefits Fund Pension and Gratuity Fund (formerly Retirement Benefits Fund) Rehabilitation and Reconstruction Program Priority Development Assistance Fund1 Feasibility Studies Fund TOTAL 1

Under the FY 2014 General Appropriations Act, the P25.24 Billion Priority Development Assistance Fund is realigned to the following: CHED, DOH, DSWD, DOLE-TESDA, DPWH, UP System, PNP, AFP, and NDRRM Fund 2 Inclusive of PhP2.072 Million Retirement and Life Insurance Premium

Source: National Expenditure Program: DBM, 2014; FY 2014 General Appropriations Act (RA 10633)


Where did the Realigned PDAF go? ITEM

MFO/PROG/PROJ

Department of Health Assistance to Indigent Patients either Confined or OutPatients in Govt Line 46 Page Hosps/Specialty 279 Annex A Hosps/LGU Vol 1 Hosps/Philippine General Hosp/West Visayas Hosp (new budget item) TOTAL In PHP ‘000

NEP 2014 In PhP ‘000

GAA 2014 In PhP ‘000

Variance In PhP ‘000

0

3,193,950

3,193,950

Department of Social Welfare and Development Protective services for Line 5 Page individuals and 453 Annex A 1,449,110 families in especially Vol 1 difficult circumstances TOTAL In PHP ‘000

3,193,950

5,539,110

4,090,000

4,090,000


Where did the Realigned PDAF go? ITEM

MFO/PROG/PROJ

NEP 2014 In PhP ‘000

GAA 2014 In PhP ‘000

Variance In PhP ‘000

Commission on Higher Education Line 10 Page 573 Annex A Vol 1

TOTAL In PHP ‘000

Provision of Assistance, Incentives, Scholarships and Grants (Central Office)

539,344

4,635,664

4,096,320

4,096,320


Where did the Realigned PDAF go? NEP 2014 In PhP ‘000 Department of Labor and Employment ITEM

Line 29 Page 345 Annex A Vol 1

Line 55 Page 372 Annex A Vol 1 TOTAL In PHP ‘000

GAA 2014 In PhP ‘000

Variance In PhP ‘000

1,508,353

2,530,353

1,022,000

1,379,080

2,405,616

1,026,536

4,935,969

2,048,536

MFO/PROG/PROJ

Conduct of training, livelihood and enterprise development and other capacity building programs for students, youths, and disabled workers and for the rural workers including programs for selforganization for plantation workers (Central Office) Operation of the TESDA Regional and Provincial Offices, including Regional Technical Education & Skills Development Centers (PTESDCs)

2,887,433


Where did the Realigned PDAF go? NEP 2014 In PhP ‘000 Department of Public Works and Highways Line 23 Page DPWH-MFO 1 National 583 Annex A 91,126,208 Road Network Services Vol 2 Line 19 Page DPWH-MFO 2 Flood 28,870,595 773 Annex A Management Services Vol 2 DPWH MFO 3 Line 86 Page Maintenance and 16,308,673 807 Annex A Construction Services of Other Vol 2 Infrastructures Line 21 Page Locally Funded 21,895,864 962 Annex A Projects Vol 2 TOTAL 158,201,340 In PHP ‘000 ITEM

MFO/PROG/PROJ

GAB 2014 In PhP ‘000

Variance In PhP ‘000

94,061,423

2,935,215

29,339,169

468,574

16,789,673

481,000

25,407,075

3,511,211

165,597,340

7,396,000


Summary of PDAFPDAF-Related Budgetary Adjustments and Realignments DEPT/ AGENCY DPWH DOH DSWD DOLE CHED TOTAL In PHP ‘000

NEP 2014 GAA 2014 In PhP ‘000 In PhP ‘000 158,201,340 165,597,340 0 3,193,950 5,539,110 1,449,110 4,935,969 2,887,433 539,344

4,635,664

Variance In PhP ‘000 7,396,000 3,193,950 4,090,000 2,048,536 4,096,320 25,686,536

In PhP ‘000 TOTAL PDAFRelated Adjustments & Realignments (GAB 2014) Amount of PDAF + OVP Locally Funded Projects (NEP 2014) Variance In PHp ‘000

25,686,536

25,440,000

246,536

Although marginal, the variance of PhP 246,536,000 means that budgetary adjustments and/or realignments were made to the five relevant agencies coming from other fund sources on top of the PDAF-realigned funds. The question is: Which budget items were slashed or removed in the Houseapproved budget bill to accommodate further fund increases in the six relevant agencies?


The Box on Automatic Appropriations is not reviewed by congress. AUTOMATIC APPROPRIATIONS

GAA 2012

GAA 2013

GAA 2014

Interest Payments for Debt Service

333,107,000,000

333,902,000,000

352,652,000,000

Internal Revenue Allotment

273,309,592,000

302,304,001,000

341,544,726,000

9,969,209,000

15,518,556,000

-

331,000

331,000

331,000

1,094,084,000

545,844,000

6,450,000

Custom duties and taxes, including Tax expenditures

33,043,000,000

26,900,000,000

26,900,000,000

Net Lending

23,000,000,000

26,500,000,000

24,950,000,000

Employees’ retirement and life insurance premiums

23,270,917,000

28,125,611,000

28,859,006,000

-

2,182,808,000

-

26,834,442,000

19,240,064,000

21,116,662,000

723,628,575,000

755,219,215,000

796,029,175,000

Tax Refunds Pension under RA 2087 & 5059 Grant Proceeds

Rewards and Incentives Fund Special accounts in the general fund TOTAL

Note: Total amounts of the lump sum items under Automatic Appropriations were only fleshed out in the House-approved General Appropriations Bill Source: GAA 2012 -2014: DBM, 2014


Allocation by Region

Source: Budget of Expenditure and Sources of Financing: DBM, 2012-2014


Where are the poor? The 16 poorest provinces Province

2012 Poverty Inciden ce (%)

Island Region

Province

2012 Poverty Inciden ce (%)

Island Region

Lanao del Sur

67.3

Mindanao

Western Samar

43.5

Visayas

Eastern Samar

55.4

Visayas

Bukidnon

41.5

Mindanao

Apayao

54.7

Luzon

41.4

Mindanao

Maguindanao

54.5

Mindanao

Lanao del Norte Camiguin

41.0

Mindanao

Zamboanga del Norte

48.0

Mindanao

Masbate

40.6

Luzon

Sarangani

46.0

Mindanao

40.4

Mindanao

North Cotabato

44.8

Mindanao

Sultan Kudarat Sulu

40.2

Mindanao

Negros Oriental

43.9

Northern Samar

43.5

Visayas Visayas

*10 of the 16 poorest provinces are situated in Mindanao; 3 out of 4 in Visayas from the Samar provinces

Source: 2012 Full Year Official Poverty Statistics, National Statistical Coordination Board


OUTSIDE THE EXPENDITURES BOX There are still items which are not listed in the expenditure program. still another box with a different color. Inside this box are two boxes: off budget items and direct remittances. the other box contains the unprogrammed expenditures.

Off Budget items and Direct Remittances Ph 40.6 billion

Not in the Expenditures/ Not in the Gen. Appropriations Act

Unprogrammed Fund Ph 139 billion


Outside the Box… UNPROGRAMMED FUNDS (in ‘000) Budgetary Support to GOCCs (Recording of Relent Loans in the 2014 NEP)

GAA 2012

GAA 2013

2014 Proposed NEP & GAB

GAA 2014

25,214,549

16,826,406

3,036,268

3,036,268

Support to ForeignAssisted Projects

1,224,790

2,226,655

16,124,491

6,124,491

General Fund Adjustments

1,000,000

1,000,000

1,000,000

1,000,000

Support for Infrastructure Projects and Social Programs

26,000,000

23,000,000

56,349,000

20,000,000

Disaster Relief & Mitigation Fund (formerly Disaster Risk Reduction and Management)

14,200,000

-

-

3,000,000

Debt Management Program

85,182,506

60,363,130

25,000,000

1,000,000

Source: GAA 2012-2014: DBM, 2014; FY 2014 General Appropriations Act (RA 10633)


Outside the Box… UNPROGRAMMED FUNDS (in ‘000)

GAA 2012

GAA 2013

2014 Proposed NEP & GAB

GAA 2014

AFP Modernization Program

-

10,632,180

10,894,000

5,000,000

Risk Management Program

-

-

30,000,000

20,000,000

Payment of Total Administrative Disability Pension

-

3,000,000

-

243,000

Reconstruction and Rehabilitation Program

-

-

-

80,000,000

People’s Survival Fund

-

500,000

500,000

500,000

117,548,371 139,903,759

139,903,759*

TOTAL (in ‘000)

152,821,845

*

Items under the Unprogrammed Fund were reorganized to form a new fund, Reconstruction & Rehabilitation Program. The complete listing of line items are indicated in the Details of the Budget for 2014. Total amount proposed from the National Expenditure Program is retained in the General Appropriations Act. Source: GAA 2012 & 2013; National Expenditure Program: DBM, 2014; FY 2014 General Appropriations Bill (HB 2630)


Studying the budget and expenditures of governnent is like opening a box within a box within a box within a box.... people think the national budget is one huge, huge box. Actually it is a series of smaller boxes. The people don’t see all of these boxes. Regulation and accountability vary from one box to another.


The 2014 Budget and Update