SEPT 28, 2015

NR # 3971C

House begins plenary discussions on proposed

P3.002-trillion budget for 2016
After almost two months of scrutiny of the budgets of the various government
departments and agencies at the Committee on Appropriations, the House of
Representatives today started plenary discussions on House Bill 6132 or the General
Appropriations Bill (GAB) for 2016 which proposes a national budget of P3.002 trillion
for next year.
The plenary discussions opened with a sponsorship speech of Rep. Isidro T. Ungab
(3 District, Davao City), Chairman of the Committee on Appropriations, who expressed
confidence that with the collective wisdom of lawmakers, they will pass the measure on
time, as they did in the past five years.
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I am confident that with our collective wisdom, we will also pass on time the
national budget bill for 2016. The congressional power of the purse comes with the
responsibility not only of ensuring that every public peso is spent within means, in the
right priorities, and with measurable results particularly in fostering inclusive
development but also of passing the budget bill on timedelaying the passage of the
budget bill will mean delaying our countrys forward move towards the achievement of
our national development goals, said Ungab.
Ungab said the proposed 2016 budget is 15.2 percent or P396 billion more than the
2015 expenditure program. It corresponds to 19.5 percent of The Gross Domestic Product
(GDP), increasing from 18.7 percent of GDP in 2015.
Of the P3.002 trillion obligation budget, Ungab said new general appropriations
which they proposed Congress to authorize amount to P2.139 trillion, consisting of P2.071
trillion in Programmed New Appropriations and P 67.5 billion in Unprogrammed
Appropriations which may only be utilized if revenues exceed targets or new loans be
secured.
The Programmed New Appropriations of P2.071 trillion, together with the P930.7
billion in Automatic Appropriations, which is outside the purview of this General
Appropriations Bill, will provide for the appropriation cover for the P3.002-trillion Budget
according to him.
Ungab said the proposed budget has been shaped by financial management reforms
that include the two-tier budgeting approach, the GAA-as release document policy, the
performance informed budgeting, the unified accounts code structure, and the bottoms-up
budgeting process.

As the proposed budget has been shaped by these reforms, we become more
confident that it is not just a budget where we spell out the sources of funds and the plan
for the disbursement of funds, but an investment plan for a better Philippines. We agree
with the appreciation of President Aquino that the national budget is the governments
most potent instrument in achieving the countrys development goals. And from the point
of view of a Representative of the people, I say with conviction that the national budget
should be the clearest, the loudest, and the best expression of our peoples desire for
development, said Ungab.
Ungab said the budget measure is anchored on the assumptions that economic
growth will be 7 to 8 percent this year, in 2016 and over the medium term, inflation will
be within 2 to 4 percent, and an exchange rate of P43 to P46 per dollar. It is also consistent
with other macroeconomic assumptions such as a 364-day T-bill rate of 2 to 4 percent,
exports growth at 6 percent, and imports growth at 12 percent according to him.
Moreover, Ungab explained the budget proposal has been formulated based on
fiscal program with: Total revenues of P2.697 trillion in 2016, which translate to 17.5
percent of GDP and is higher by 18.5 percent from the 2015 revenue program of P2.275
trillion; Consolidated public sector deficit of P128.8 billion or 0.8 percent of GDP;
National government budget deficit of P308.7 billion or 2 percent of GDP, consistent with
the medium term fiscal program; and Outstanding national government debt of P6.423
trillion or a debt-to-GDP ratio of 41.8 percent by the end of 2016.
The GAB also effectively reduces the number of Special Purpose Funds (SPFs),
from 10 in the 2015 GAA to 7 in the 2016 GAB. The E-Government Fund and the
International Commitments Fund were incorporated back to the budgets of the relevant
departments, while the Rehabilitation and Reconstruction Program was integrated into the
National Disaster Risk Reduction and Management Fund (NDRRMF).
Ungab also noted the amounts allocated for the Miscellaneous Personnel Benefits
Fund and the Pension and Gratuity Fund were notably decreased, as funds for the creation
of new or filling up of unfilled positions, as well as compulsory retirement, were
integrated back into the respective departments budgets.
The NDRRMF, meanwhile, expanded significantly to enable the government to
respond better to calamities and the needs of victims.
The distribution of the 2016 Budget by sector reflects the governments
commitment to inclusive growth as more than P64 in every P100 will be spent on social
and economic services in 2016this shows a dramatic improvement from P45 in every
P100 in 2015, said Ungab.
The Social Services sector continues to get the largest share of the budget, at 36.8
percent of the national budget or P1.106 trillion. Economic Services will get the second
largest share of the budget with 27.6 percent or P829.6 billion while General Public
Services will receive 17.3 percent or P517.9 billion. The Debt Burden, which is composed

of Interest Payments to service outstanding debts as well as Net Lending to government

corporations, will reach an all-time low of 14 percent of the total budget or P419.3 billion.
To boost the governments capacity to defend national sovereignty, the Defense sector will
get a share of 4.3 percent or P129.1 billion.
Ungab also cited that starting in the 2016 proposed national budget, the government
adopted a new framework in classifying the budget called the Classification of Functions
of Government (COFOG) which categorizes programs and projects of government
agencies according to function to accurately reflect an agencys contribution to the social
and economic goals of the government.
Among the expense classes, Capital Outlays (CO) will receive the largest increase
at 29.8 percent, or a budget of P702.9 billion representing 23.4 percent of the total 2016
budget. Notable public infrastructure investments in 2016 include the construction and
rehabilitation of classrooms, especially those needed for the roll-out of Senior High
School under the K-12 Program; the completion of the national road network; the
construction and rehabilitation of health facilities especially in rural areas; among others.
As in previous years, the proposed budget for 2016 allocates the largest share of
36.3 percent for maintenance and other operating expenditures (MOOE), with P1.094
trillion.
Personnel Services (PS) will get P810.8 billion or 27 percent of the total
expenditure program while Financial Expenses will receive 13.1 percent or P394.4 billion.
As to the funding source for government operations and programs, Ungab said these
include: government revenues in the amount of P2.697 trillion to be collected in 2016. Of
this, P2.543 trillion or 94.3 percent will be sourced from tax revenues. The remainder will
come from non-tax revenues at P151.4 billion and privatization proceeds at P2 billion;
collections of the Bureau of the Treasury (BTr) at P58.3 billion, fees and charges at P40
billion, the sale of government assets at P2 billion, and other non-tax revenues at P53.2
billion; borrowings of P674.8 billion in 2016, of which P308.7 billion will be used to
finance the projected fiscal deficit, P347.7 billion to amortize maturing obligations, and
P18.4 billion for the national governments cash buffer account.
Per the budget proposal submitted by President Aquino to Congress themed
Paggugol na Matuwid, Saligan ng Tuloy-Tuloy na Pag-unlad, the Top 10 departments
per allocation are: Department of Education (DepEd) 435.9 billion; Department of Public
Works and Highways (DPWH) P394.5 billion; Department of National Defense (DND)
P172.7 billion; Department of Interior and Local Government (DILG) P154.5 billion;
Department of Health P128.4 billion; Department of Social Welfare and Development
(DSWD) P104.2 billion; Department of Agriculture (DA) P93.4 billion; Department of
Finance (DOF) P55.3 billion; Department of Transportation and Communications (DOTC)
P49.3 billion; Department of Environment and Natural Resources (DENR) P25.8 billion;
and Department of Science and Technology (DOST) P18.6 billion. (30) rbb