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FACING THE CHALLENGES OF 2009
 FOR
SWP and ABI, the year 2009 is a very crucial
period and a most challenging moment in the
history of Philippine budgeting – with the
coming 2010 national elections and the global
financial crisis hitting the country.
ABI warns that if there will be any economic
recovery or stimulation, it has to be in 2009
because the 2010 budget will be limited to
election spending which can provide only
temporary growth. SWP also calls on legislators
and the public to closely guard the 2009 budget.
Election spending in 2009, such as millions of
pesos for a political candidate’s television
commercial cannot have very much impact on
sustainable poverty alleviation because it does
not reach the poorest of the poor.
Moreover, the Philippines is undeniably lagging
behind the Millennium Development Goals (MDGs)
despite government pronouncements of strong
economic fundamentals and steady growth. As of
first quarter of 2009, the Social Weather
Station revealed that 47 percent or 8.7 million
Filipino families consider themselves poor.
The global recession is going to hit those below
the poverty line, millions are going to lose
their jobs and more families will be fasting day
by day. The Philippines is among the ten
countries with the highest poverty level in the
Asia Pacific and is one of the most disaster
prone countries in the world. Hence, this year,
SWP and ABI members are set to work harder on
alternative budget proposals for increased
allocations for education, health, agriculture
and environment.
Fighting for the 2009 Budget
 After
intense
engagement with executive offices, legislators
and the Bicameral Conference Committee for the
2009 budget,
the ABI was able to push for a total of P7.7
billion more funds for health, education,
agriculture and environment.
The ABI started the year by repeatedly calling
on the government to release the impounded funds
for social development. This includes funds for
autoclaves, national tuberculosis program,
community based forest management, training for
organic farming and benefits and salaries for
teachers.
ABI also criticized direct
and conditional veto of pro-poor provisions in
the 2009 national budget, which, in effect,
drastically cuts
down
social-spending budget for the poor. A total of
P50 billion worth of additional expenditures in
social services proposed by the Legislature and
civil-society groups were automatically put on
hold and were subject to
prior approval or consent of the President
before the funds can be actually used for
health, agriculture, environment
and education.
The group also guarded the country’s fiscal
performance during the first quarter. The ABI
criticized government’s aggressive government
spending to drive economic growth in the first
quarter of the year; saying this has failed
because the Philippines’ fiscal stimulus is
largely focused on tax breaks and incentives to
rescue big companies rather than prioritizing
social services. The Philippines is among the
countries in Southeast Asia with the largest
fiscal stimulus for tax breaks and incentives
and rescue operations for industries and
infrastructures.
Campaigning for a People-Oriented National
Budget in 2010
The ABI also rang alarm bells against the
macroeconomic assumptions for 2010. The group
warned that the Philippine Budget Call for 2010
is calling for fiscal crisis because 2010
targets on revenues, expenditures and deficit
are unrealistic and overly optimistic. The group
also warned of a very debt dependent budget in
2010.
SWP repeatedly explained to mass media that if
government insists on formulating 2010's budget
with overly optimistic assumptions, it can only
lead to further ballooning of deficit by 2010
due to heavy borrowing to finance the budget.
 This
will be the fourth year of ABI engagement. The
work and challenges become bigger and bigger
each year. For 2009, the ABI, which has now
grown to a membership base of 60 nongovernment
organizations and more than 10 partner
legislators, made bigger goals during the
group’s strategic planning workshop held in
Rizal.
During the planning, the group agreed that the
campaign will have new features. This includes
mainstreaming the indigenous people’s group in
the ABI campaign; including climate change as a
cross cutting issue on environment, health,
agriculture and education; and tracking the
utilization of Conditional Cash Transfers.
The ABI also already trained journalists, in
partnership with the Philippine Center for
Investigative Journalism, on how to monitor,
analyze and report inconsistencies in the
execution of the national budget. During this
forum which was held at the University of the
Philippines – National College of Public
Administration and Governance (UP NCPAG), the
journalists and civil society groups agreed that
media and nongovernment organizations should
help each other on gathering data on the budget,
helping the people understand the implications,
and jointly demand government accountability on
the national budget.
change.
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Congress challenged to assert more power on
the 2010 budget
Social
Watch Philippines (SWP) challenged Senators and
Congressmen to strongly assert their power of
the purse as the design of the 2010 national
budget proposed by President Gloria Arroyo
allows the legislature to review only P845
billion of the P1.54 trillion allocations.
Former
national treasurer and SWP lead convenor Leonor
Magtolis Briones said that the new
appropriations is only P914 billion of the P1.54
trillion budget. Deducting the unprogrammed
funds in new appropriations, the allocation to
be scrutinized by congress is only P845 billion.
“Comparing 2009 and 2010 budget in terms of
total obligations, the budget is P114 billion
higher now. Yet, the new appropriations that
Congress has to act on is P3.774 billion less
than what they had to act on in 2009.” said
Briones.
Briones also warned that that the increases in
the 2010 budget are out of reach of the
legislature, while the decreases in the budget
will affect the agencies which the legislature
reviews.
“The
increases are in budget items which cannot be
touched by legislature. This includes the
Automatic Appropriations which increased by P123
billion and the SPF which increased by P166
billion. Meanwhile, the budget for departments,
which the legislature reviews, decreased by 51
billion,” Briones said.
She
added that the budget for Departments is only
42.77 percent, while the budget for Special
Purpose Funds (SPF), which is generally under
the control of the executive and will not be
reviewed by Congress, is 57.23 percent.
“Right
now, the arena for the legislature’s engagement
with the executive is even smaller with the
smaller budget that the legislature can touch.
It lays the question of who really holds the
power of the purse. What is clear is that the
power of release is with the President,” Briones,
who is Oxfam’s Ambassador to the G8, said.
SWP,
through the Alternative Budget Initiative (ABI)
campaign, which is a partnership among 60 civil
society groups and legislators formulating
alternative budget proposals for more
allocations for social development, called on
Congress and the Commission on Audit (COA) to
meticulously scrutinize the SPF. ABI has been
campaigning for the realignment of SPF, which
includes budget items without clear,
identifiable and useful purpose, to allocations
for social development programs.
“While
the extent of Congressional intervention in the
proposed budget is heavily compromised by the
fact that New General Appropriations is only 59%
of the budget, Senators and Congressmen 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,” Briones said.
Briones reported that
nongovernment groups, partner legislators, the
Congressional Planning and Budget Division (CPBD)
and the Senate Economic Planning Office (SEPO ),
in a meeting held recently, also agreed to help
each other in guarding the 2010 budget by
broadening civil society participation in
Congressional budget deliberation. This will be
done through exchange of information, joint
analyses of the Executive’s proposed budget and
development of alternative budget proposals.
Rene
Raya of Action for Economic Reforms said that
the ABI is also calling on Congress to
strengthen 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 agreed upon by the Bi-Cameral
Conference Committee on the 2009 Budget on
January 2009,” Raya said.
“We also plead that Congress prioritize
legislative budget reform initiatives, which
already started early this year with the public
hearing conducted by the Senate Committee on
Finance on the impoundment control bills,” Raya
added..
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Social and economic
services not prioritized in 2010 Budget; Civil
society and legislators put forward
alternative budget proposals
Social Watch Philippines (SWP) warned that
millions may plunge into poverty next year as
economic and social services are not priorities
in the proposed 2010 national budget.
Former National Treasurer and SWP lead convenor
Leonor Magtolis Briones noted that the budget
for Social Services increased by only P27.7
billion. Allocations for Economic Services,
which includes agriculture, environment, trade,
power and energy and water resources decreased
by P25 billion. The total budget for Departments
was also reduced by P51 billion. Meanwhile, the
greatest increase was in Debt Service-Interest
Payments which is P88 billion more than last
year.
“Figures clearly show that the that the eight
percent increase in the budget for 2010 is not
geared towards greater spending for programs
that will have the greatest impact on economic
and social development,” Briones added.
She explained that the increase in the budget is
due to higher amounts for Automatic
Appropriations and Special Purpose Funds (SPF)
which increased by P123 billion and P166
billion, respectively. SWP has been consistently
calling for the realignment of SPF which are
unreasonably big budget items with no special
provisions and are highly discretionary.
She also warned that out of P914 billion new
general appropriations, the Programmed
Appropriations, or the budget available for
release in 2010 is only P845. The remaining P69
billion is Unprogrammed Appropriations which can
only be used if there are additional funding.
“The proposed 2010 expenditure program is a
‘maintenance’ budget and not designed 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,” Briones said
With this warning, 60 nongovernment
organizations led by SWP, yesterday (September
10) presented their alternative budget proposals
for the 2010 national budget to legislators in a
meeting in Quezon City. Civil society groups and
legislators, through the Alternative Budget
Initiative (ABI) campaign has been formulating
and lobbying for increased allocation for
health, agriculture, environment and education.
Among those who attended the meeting for the
alternative budget proposals are Congressman
Roilo Golez, Congressman Teofisto Guingona III.
Also present were senior legislative staff of
Senators Panfilo Lacson, Loren Legarda and Allan
Peter Cayetano and Representatives Edcel Lagman,
Ronaldo Zamora, Alfonso Umali Jr. and Lorenzo
Tanada III. A director of the Congressional
Planning and Budget Division (CPBD) and a senior
staff of the Senate Economic Planning Office (SEPO)
also participated in the meeting.
“We are very happy that legislators are
supporting our alternative budget proposals,”
said Rene Raya of Action for Economic Reforms (AER).
“This provides a bit of hope for 12.2 million
hungry Filipinos, especially when the magnitude
of poor population among basic sectors has been
steadily increasing.” he added.
A total of P5.3 billion allocations for social
development and P6.3 billion for environment,
agriculture, education and health were added in
the national budget in 2007 and 2008
respectively as proposed through the ABI. For
the 2009, ABI was able to push for P7.7. billion
increases in the budget for social and economic
services.
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2010 budget dependent on heavy
borrowings
Social Watch Philippines (SWP) said that the
2010 budget deficit target of P233.4 billion
will require over P660 billion new borrowings.
Former National Treasurer and SWP co-convenor
Leonor Magtolis Briones said that government
plans to borrow almost thrice the amount of the
deficit target for next year. Of the P660
billion new borrowings, P185 billion will come
from foreign sources while P475 billion will be
sourced domestically
“Government is borrowing much more than what is
required to fund the gap in the budget to pay
principal amortization on prior years’ debts,”
Briones explained.
Briones pointed out that P405 billion, or
two-thirds, of these borrowings will go to
principal amortization. This, she added, belies
the claim in the Budget Message that significant
progress has been made on strengthening debt
management over the past five years.
The concern of SWP, according to Briones, is the
impact of these borrowings on financing critical
social development not only next year but in
succeeding years as well. She explained that
debt interest payment corners a big chunk of
public resources, leaving little room for
government to fund programs necessary to attain
the Millennium Development Goals (MDGs) by 2015.
Briones, currently a professor of public
administration at the University of the
Philippines, also expressed apprehension on
deficit targets for 2010. It is based on a
revenue target of P1.336 trillion.
“Assuming revenues will grow by as much as 7.8 %
next year may be too much. It could very well
lay the groundwork for either higher deficit or
cuts in spending for productive expenditures,”
Briones concluded.
Social Watch Philippines is part of the
international Social Watch network which
monitors and advocates financing for development
and the Millennium Development Goals (MDGs). SWP
spearheaded the Alternative Budget Initiative (ABI),
a network of 60 non-government organizations
advocating for adequate funding for education,
agriculture, environment, health and monitoring
financing for social development.
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Social Watch
Philippines
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