Posted on 2003

SAGAD HANGGANG BUTO (Scraping the Bottom) Sen. Manuel B. Villar, Jr.'s Sponsorship Speech on the General Appropriations Bill of 2003


      Ginoong Pangulo, karangalan ko na isumite sa Kapulungang ito, at hilingin ang inyong pagpapatibay ng Ulat ng Senate Finance Committee ukol sa General Appropriations Bill sa Taong 2003. Ito'y naglalaman ng ilang rekomendasyon ng Komite sa pagpapatupad ng National Budget.

      Ang hamon sa atin, Ginoong Pangulo -- Paano natin gagamitin ang napakaliit nating pondo para sa napakaraming pangangailangan ng ating bansa?

      In these crucial times, survival is the name of the game. I hate to say it Mr. President, but our country as of now is not capable of participating in games played by players who are well-fed, well-trained, and well-dressed. I am not trying to be pessimistic, Mr. President. I am only being realistic.

      Lahat tayo'y nagmamahal sa ating bayan, at nais nating makitang mayroon tayong patutunguhan. Ngunit kung mananatiling nakapiring ang ating mata sa katotohanan, di tayo makakaahon sa ating kinasasadlakan.

      Mr. President, we are not yet economically capable to play in the games of kings and queens. Our present concern is only to win the game of survival. Upang tayo'y magtagumpay sa labang ito, kinakailangan nating sagarin hanggang buto ang napakaliit na pondong pambansa.  Ito na ri'y upang masagot ang matinding pangangailangan ng mahahalagang sektor ng lipunan. 

Laying down the parameters

      Given the fact that we have limited resources to put to action all the economic policies we have laid down, what then is the best position that will help us win this game? Mr. President, we need to utilize our scant resources to the fullest:

      First, let us begin by making a sincere effort to improve the lives of our people in the grassroots level by focusing on basic services such as health, shelter, education, agriculture and security. This move will stimulate and encourage pro-poor economic growth, augment income, and generate employment opportunities.

      Second, let us defer the implementation of least priority projects, and instead formulate and implement programs that are broad-based and essential for economic survival and development.

      Third, let us improve the delivery of basic services through close coordination among concerned government departments and agencies. Under this framework, misuse and wastage of valuable government resources can be avoided.

      Fourth, pragmatic steps should be taken to strengthen and improve tax and revenue administration. 

      Fifth, let us cultivate self-sufficiency by allowing as many government agencies as possible to use some of their income to improve the delivery of their services and to maximize their revenue generating capabilities;

      Sixth, let us encourage greater flexibility in government departments and agencies' utilization of their maintenance and operating budget, in order to be responsive to the fast-changing times;

      Lastly, let us instill accountability in our government officials in order to ensure the proper and optimal use of our resources. By doing this, we likewise encourage the private sector to do its share in nation building.

The Factors Beyond our Control - External and Internal

      The national budget that we are called upon to enact shall play a pivotal role amidst the cloud of uncertainty that hovers over our national landscape and casts a pall of gloom over our economic horizon. Among the factors that we should primarily consider, Mr. President, include external concerns such as the impact of the impending US-Iraq war to our economy, which is expected to adversely affect the oil supply in our country. A decrease in the supply of oil always translates to higher oil prices. A higher price of oil brings an upsurge in the prices of our basic commodities. And should war break out in the Middle East, inflation is expected. To cushion the effects of such, our budget must respond to it.

      Furthermore, Mr. President, we have internal problems such as the gaping budget deficit. In order to fill the gap, we must enact a national budget that is both responsible and responsive, one that endeavors to extract infinite resourcefulness out of our very limited resources, especially during times of uncertainty and dwindling revenue collections. 

      Mr. President, in formulating the national budget for the year 2003, we are constrained with parameters which are barely beyond our control. I say barely beyond our control because we are left with no choice but to allocate some mandatory expenditures into our budget. 223 billion pesos or 28% of our total budget goes directly to debt service charges. Our personal services expenditure accounts to 275 billion pesos or 34%, and the internal revenue allotment to 142 billion pesos or 17% of the total national budget.

      These fixed expenditures alone, Mr. President, when summed up, account to already about 80% of our budget. Strictly speaking, we are only given leeway to work on the remaining 20% of the total budget. Of this, 11% or 85 billion pesos goes to maintenance and other operating expenses, and the remaining 9% or 74 billion pesos is alloted for capital outlayA large part of this will be used to finance the government's previous project commitments which we are duty bound to comply with, whether we like it or not.

      Mr. President, the figures speak for themselves. Obviously, what we are left to bear with is a survival budget. It provides us with very limited flexibility to translate our economic policies into action. The only portion of the budget which is permissible for us to utilize will not be enough to radically change our present financial state, and more so, it cannot be used as a tool to redirect our country towards economic development. 

      Our proposed budget, Mr. President, may be categorized as low, insufficient, and inadequate. Whatever name they give to it, I have great confidence in the resiliency of the Filipino. I have great respect for the Filipino's fortitude to overcome his problems. I still believe that with the cooperation and sense of national unity of everyone, our nation can emerge victorious during these trying times. The choice is ours to make. 

The Working Figures - House and the Executive

      Mr. President, allow me to provide you with the working figures that we have:

      The National Expenditure Program submitted by the President, projects Total Obligations amounting to P804.2 billion. This represents a 4.5% increase over the previous year's budget. The approved house version of the total general appropriations amounted to P609.81 billion. The total unprogrammed appropriations amount to P54.28 billion. These unprogrammed appropriations refer to the standby spending authority that shall be released only when revenue collection exceeds revenue targets and once loan agreements on Foreign Assisted Projects are perfected. 

      President Gloria Macapagal-Arroyo, in submitting the proposed P804.2 billion national budget to Congress, calls it a budget that "invests in a strong Republic." To win the war against terrorism and criminality, it provided for the employment of 5,000 new policemen, jail guards and firemen, 7000 new troops for the Armed Forces of the Philippines and the creation of the Philippine Drug Enforcement Agency (PDEA) under Republic Act No. 9165 to ensure the efficient and effective enforcement of all laws on dangerous drugs. Likewise, the President's Budget allocated funds for salary increases for the Philippine National Police as well as AFP personnel. To finance development projects and activities in support of basic services, the said budget also channeled P20 billion to meet the budget for the Agriculture and Fisheries Modernization Act, P45.3 billion for strategic infrastructure projects of the DPWH and DOTC, and P104.4 billion for education. 

      The House of Representatives maintained the total budget ceiling at P804.2 billion, although P4.6 billion was transferred from automatic to new appropriations. Browsing through the house version of the appropriations bill, a most notable feature includes the introduction of three-preference categories, which classify the expenses according to our priorities. I find them worthwhile noting, to wit:

  • The First Preference Expenditures consist of urgent programs for education, food security, poverty alleviation, health, peace and order, and other vital social services and mandatory expenditures.
  • The Second Preference Expenditures consists of other regular operating expenses of agencies, including urgent programs rolled over to Second Preference due to inadequacy or deficiency of the available operational cash budget or cash resources for program implementation.
  • Third Preference Expenditures consists new programs, projects and activities as well as ongoing programs whose implementation timetable are extended and funding requirement drawdowns are delayed or restructured.

      The House version of the appropriations bill furthermore provides the following rules:

    • The Third and the Second Preference shall be subject to appropriation reserves in the event that conditions later in the year necessitate the imposition of reserves.
    • The First Preference category includes 100% of Personal Services and 75% of Maintenance and other Operating Expenses (MOOE). 
    • The Second Preference category encompasses the remaining 25% of MOOE as well as 50% of Capital Outlays. 
    • Lastly, the Third Preference category consists of the remaining 50% of Capital Outlays and new activities/projects.

Our Proposed Budget

      A few weeks ago, the Senate Committee on Finance called on the Development Budget Coordinating Committee (DBCC) to present the revised fiscal targets. The revised fiscal targets were made in order to reflect a more attainable target, which accommodated the dramatic changes in our economy. 

      During the hearing, the DBCC presented a P56.6 billion revision in Total Revenues for FY 2003 -- from P640.7 billion, it plummeted to P584.1 billion. The targeted disbursements, on the other hand, was increased by P3.3 billion, from the original P782.8 billion to P786.1 billion. As a whole, this resulted to an upsurge in the targeted deficit for FY 2003, from P142.1 billion to P202 billion. The targeted deficit for FY 2002 was likewise increased from the original P130 billion to P213 billion.

      After the transmittal of the General Appropriations Bill to the Senate last December 2002, and after a careful deliberation by the Senate Committee on Finance, we have finally come out with our own proposed version.

      Mr. President, our proposed Senate Version amounts to Total New Appropriations of P608,609,462,000. This is lower than the House Version by P1,205,268,000. Our own proposed amendments resulted to a net cut of P154,150,000 in programmed appropriation and, likewise, a net cut of P1,051,118,000 in unprogrammed appropriation.

      Mr. President, allow me to explain the rationale of our own version, as to why we have arrived at such figures.

      First, we removed the Third Preference in the Expenditure Categories introduced in the House version. All allocation for Third Preference have been transferred to the Second Preference, which may be subject to the imposition of reserves, if warranted. 

      Second, we have agreed to the deletion of the object class breakdown for all agencies to support the implementation of the New Government Accounting System this year. This will allow agencies greater flexibility within their limited budget to encourage creativity and resourcefulness in the utilization of their limited budget.

      The only major increases that we considered, are items which we deemed to be included in our current concerns such as in the areas of agriculture, education, health, energy, and other important areas: 

  • P200 million for a Young Farmers Program under the Department of Agriculture, P215.647 million for Program Beneficiaries Development, a component of the CARP;
  • P125 million for Off-base Housing projects of the Armed Forces of the Philippines to provide shelter to our soldiers, particularly those assigned in the field; 
  • P30 million for the Philippine Drug Enforcement Agency to support the government's fight against drugs; 
  • P80 million for Grants-in-Aid for technology transfer and commercialization of research; 
  • P21.8 million for the Energy Regulatory Commission to fully implement its approved staffing;
  • P60 million for the increase in Inquest Allowance of DOJ-OSEC and PAO prosecution lawyers;
  • transfer of P407.3 million from Unprogrammed to Programmed Appropriation for Tax Computerization and Revenue Enhancement Projects of the Bureau of Internal Revenue;
  • and a similar transfer of P20 million from Unprogrammed to Programmed Appropriation for the conduct of the 2003 National Demographic and Health Survey;

      Mr. President, we have also included a Special Provision for the realignment of appropriation for the construction, rehabilitation, replacement, completion and repair of elementary and secondary school buildings to augment funds for the Educational Service Contracting and Tuition Fee Supplement under the Government Assistance to Private Education (GASTPE) program.

      In order to encourage self-sufficiency among our agencies which would sustain basic health services, we made a provision allowing the Use of all of the Income of Special Hospitals, Medical Centers, Institute for Disease Prevention and Control, and other national government hospitals retained by the Department of Health. This is subject to the provision that at least 25% of the said income shall be used for the purchase and upgrading of hospital equipment. This, in effect, will augment the budget of the Department of Health.

      To cope with the inevitable fast-paced globalization, we have also provided for the Establishment of an E-Government Fund to finance major information and communication technology projects of the government as may be determined by the Information Technology and E-Commerce Council. 


      In closing, Mr. President, please allow me to express my heartfelt gratitude to the hard working members of the Senate Finance Committee and to everyone we have worked with. We have great appreciation for all of your inputs and recommendations. 

      I must add, Mr. President, that crafting a national budget and utilizing it to serve the best interests of the nation is not the sole responsibility of those in the government sector. It is the responsibility of all, irrespective of political affiliations, and irrespective of economic and social status.

      Indeed, responsible budgeting is an arduous task, for it involves crafting a financial blueprint for the sustainability of our nation.

      Mr. President, if we are to take an active role in the upliftment of our nation, we must exact upon ourselves, the duties and responsibilities required of us in order to win this game of survival. 

      In this world where we live in, there is only one fundamental rule, that is: the survival of the fittest, and the elimination of the unfit. As to who we would like to be, depends on the choice we make.

      We need to survive, and give our future generations a fighting chance in this world.

      Mayroon tayong kasabihan, "Kapag maikli ang kumot, matutong mamaluktot."

      Ginoong Pangulo, sa panahong ito kung saan nahaharap sa kagipitan ang ating bayan, kinakailangan nating lahat magtiis ng kaunti, mamaluktot kung maaari, hanggang makaahon ang ating bansa.

      Sana tayo ay magkaisa. Kahit sagad na hanggang buto ang ating national budget, pipilitin pa rin nating bigyan ng maayos at desenteng buhay ang ating mga kababayan.

      The final thing I ask from this Chamber, is your approval of the Senate Finance Committee's amendments to the General Appropriations Bill, so our country and our people may have a fighting chance -- in this game of survival.

      Thank you and Good Morning.

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