A closer look at Aquino’s ‘reform budget’

First published in the Philippine Online Chronicles

Eye

(Photo by Dvemor)

The President calls it “reform budget,” but some see it as a detour to patronage, reduced social spending and heavy debt servicing.

In his budget message to Congress, President Benigno “Noynoy” Aquino said his proposed P1.654 trillion national budget “has been formulated to turn our vision for social reform into a tangible reality for our fellow citizens.” The proposed budget is 6.8 percent higher (an increase of P104.4 billion) than this year’s budget.

Lawmakers are eyeing the passage of the 2010 national budget before the year ends.

Aquino said the government used zero-based budgeting for next’s year’s budget to supposedly ensure that taxes paid will be spent for the people. Under the scheme, the government intends to cut existing programs such as the education department’s Food for School Program and the Department of Agriculture’s Input Subsidies for allegedly failing to meet its objectives.

Savings from the cuts will be channeled to existing programs which Aquino said are “performing well,” including DSWD’s conditional cash transfer program.

Show me the money

Most of the P104.4-billion increase in next year’s budget came from the huge P80.99 billion rise in interest payments for the government’s debt to P357.1 billion (21.7 percent of total budget), think-tank Ibon Foundation said. It added that it is the largest absolute increase in interest payments in the country’s history.

Senate ways and means committee chairman Ralph Recto said the allotment may have been inflated by as much as P7.7 billion, noting that the foreign debt payments are premised on a higher exchange rate.

Annual debt payments would retain the biggest share of the budget at 631.32 billion (38.6 percent of total spending), an abs-cbnnews.com report said. But researcher Arnold Padilla said in his article that the total debt burden for 2011 could actually reach P823.27 billion if the principal amortization of P466.18 billion is added to interest payments.

Under the proposed budget, the education department will receive the highest budget among government agencies with P207.3 billion, a 18.4 percent increase from this year’s P175 billion. The government said the allocation is intended for the construction of 13,147 classrooms and the creation of 10,000 teaching positions.

Allotment for other government agencies are as follows: National Defense (including pension), P104.7 billion; DILG (including pension), P88.2 billion; Department of Agriculture, P37.7 billion; DSWD, P34.3 billion; DOH, P33.3 billion; DOTC, P32.3 billion; and DAR, P16.7 billion.

Budget woes for SUCs, judiciary

The judiciary, meanwhile, stands to receive P14.3 billion based on the Aquino’s spending plan as against its P27.1 billion proposal. The budget cut is said to deprive local courts of the renovation of their respective halls of justice, according to a report.

“The judiciary has not been given even one percent of the national budget in the last four years and worse, there is a high probability in 2011 of a decreased budget,” said Supreme Court spokesman Midas Marquez. He said the cuts would also deprive the judiciary of its plan to hire more court personnel and judges to improve speed of disposal of cases.

Ironically, the Palace has proposed a P151 million budget, a 79.8 percent increase from 2010’s P84 million allocation, for the Witness Protection Program which it said will support 640 witnesses and whistleblowers.

Despite the relatively huge allocation for education, state colleges and universities (SCUs) also stand to suffer from budget cuts as the government plans to push them towards self-sufficiency, a move which Kabataan party-list Rep. Raymond “Mong” Palatino said “would only mean higher tuition, and consequently, higher drop-out rates and decreased access to tertiary education.”

A Bulatlat report said the budget for the University of the Philippines has been slashed by P1.39 billion (20.11 percent). Other state universities with huge budget cuts are the Philippine Normal University (P91.35 million), Bicol University (P88.81 million) and the University of Southeastern Philippines (P44.39 million).

Pork, patronage

Aquino seeks to increase allocations to Local Government Units to P300 billion, slightly higher than this year’s P297.5 billion. Meanwhile, spending for GOCCs will be slashed by 40.7 percent to P23.3 billion as the government eyes the privatization of remaining government services such as the Metro Rail Transit (MRT) and Light Railway Transit (LRT).

The government has also proposed a P22.3-billion Priority Development Assistance Fund (PDAF) or pork barrel, a 223.18 percent increase from this year’s P6.9 billion. Budget secretary Florencio “Butch” Abad said in a Philstar.com report that under the new budget, each congressman would receive P70 million a year while the senators would get P200 million a year as pork.

Ibon Foundation research head Sonny Africa said “the large pork barrel allocated mainly to parochial concerns is inconsistent with improving the effectiveness of spending.” He added that the P29.2-billion budget for the Pantawid Pamilyang Pilipino Program (4Ps) “creates massive opportunities for patronage politics.”

At the sidelines of the budget hearings by Congress, Zambales Rep. Milagros Magsaysay disclosed that President Aquino has bloated his pork barrel to P1 billion from P800 million this year. “If austerity is the name of the game for this administration, then why is the President’s Contingent Fund being increased from P800 million this year to P1 billion next year?” he said in a report.

The Senate, meanwhile, wants to scrutinize the P1.425 billion allocation (3.26 percent higher) for intelligence, GMANews.tv said.

As it appears, the Aquino government’s problem with prioritization weighs heavier than corruption at the moment.

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