The legacy budget

THE 2022 General Appropriations Act (GAA) is an election budget, which was submitted by the Executive last August 23 to the House of Representatives, where budget review will commence. Speaker Lord Allan Velasco has set September 16 as the date for its House passage. The Senate will therefore have half a month to complete its review before the end of the general registration on September 30 and the filing of the candidacy certificates from October 1 to 8 per the Commission on Elections (Comelec) calendar.

This article was originally published in The Manila Times on Aug. 31 2021

If the House fails to pass it by the deadline it set, the Senate will, therefore, make the review in a very contested environment because there are senators who are running for reelection and others who have declared they will seek higher office. If the Senate fails to approve of the proposed GAA, then the country will be captive to all the political somersaults, resulting in the political capture of the budget and the reboot of the economy. It is therefore urgent we get the budget approved before all hell breaks loose.

What will be held captive by the 18th Congress if it fails to pass the budget and the possibility of a reenacted budget looms are: building resilience amidst the pandemic, sustaining the momentum towards the recovery, and continuing the legacy of infrastructure development. Congress is therefore in a tight situation if it fails to do so because of these three milestones incorporated in the National Expenditure Program (NEP).

Since it is an election year, it also behooves Congress to look closely into the P26.4 billion budget of the Comelec. From its various programs, one can see that there are continuing programs and should not be all lumped together because 2022 is an election year. Examples are voter education, preparation of maps, development of software systems and election systems, among others. There are also performance indicators one can review and see how election administration is done in the Comelec and whether it has improved its processes year-to-year.

The Duterte administration submitted the NEP for Fiscal Year (FY) 2022 with the theme, "Sustaining the Legacy of Real Change for Future Generations." The NEP is a three-volume document that "prioritizes funding for Covid-19 response measures including health care development and social services while at the same time sustains public infrastructure investments to restore the Philippines to its pre-pandemic growth trajectory."

The proposed FY 2022 budget "centers on the recovery of growth prospects of the Philippines, focusing on the minimization of the spread of the Covid-19 virus and the safe reopening of the economy, with three interventions, namely: 1) intensified implementation of the prevent, detect, isolate, treat, and recover strategy and the full vaccination of residents in high-risk areas (e.g. National Capital Region Plus); 2) optimization of the process of detection to isolation of Covid-19 positive cases; and 3) provision of supplemental support to the health sector and the poor and vulnerable." The budget amounts to P5.024 trillion, increasing by 11.5 percent, or P518 billion higher than the FY 2021 program of P4.506 trillion.

Personnel services (PSs) accounts for P1.456 billion, maintenance and other operating expenditures (MOOEs) at P777.9 billion and capital outlays (COs) at P939.8 billion.

PS has a 29 percent increase to cover hiring of health care workers and teaching personnel, the implementation of the third tranche of the Salary Standardization Law 5, and the requirements of the 2018 military and uniformed personnel pension arrears, among others. MOOE increased by 51.5 percent of the total proposed budget. These will mainly cover interest payments and allocation for local government units, including national tax allotment, comprising 60.4 percent of this amount. CO, including net lending, amount to P981.1 billion, and correspond to 19.5 percent of the proposed budget and 5.6 percent higher year-on-year.

The NEP as submitted, carries with it the allocation to local government units (LGUs) that amounts to P1.116 trillion. This includes the P959.0 billion national tax allotment share of LGUs, consistent with the Mandanas ruling by the Supreme Court.

In terms of sectoral allocation, the NEP provides the thrust of the Duterte administration to focus on addressing the "impact of the Covid-19 pandemic and resume the path towards inclusive economic growth. Social services, with P1,921.8 billion allocations, remain the recipient of the largest share with 38.3 percent of the budget pie, increasing by 15.2 percent over the FY 2021 budget. Economic services accounts for P1,473.5 billion or 29.3 percent share in the total budget." Defense is at P224.4 billion (4.5 percent increase), general public services at P862.7 billion (17.2 percent increase) and debt burden is at P541.2 billion (10.8 percent).

The legacy of President Rodrigo Duterte is therefore a three-cornered approach in the budget which specifically targets Juan de la Cruz. "Building resilience amidst the pandemic" is continuous support for the implementation of the National Health Insurance Program with a budgetary support of P80 billion to subsidize the health insurance premium of 13.2 million indigent families and 7.3 million senior citizens. "Sustaining the momentum towards recovery" is putting in place a safety net for displaced workers affected by the pandemic which is P2 billion for "Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers" program of Department of Labor and Employment and the Emergency Repatriation Program (P11.2 billion) and the Reintegration Services Program (P52.7 million) to assist repatriated overseas Filipino workers. It also covers Pantawid Pamilyang Pilipino Program (P115.7 billion), Protective Services for Individuals and Families in Difficult Circumstances (P18 billion) and Sustainable Livelihood Program (P4.9 billion). On the education front, P49.7 billion is allocated for Commission on Higher Education and Technical Education and Skills Development Authority. 'Continuing legacy of infrastructure development' is pursuing Build, Build, Build, of which P1.18 trillion is provided for the infrastructure budget. This is equivalent to 5.3 percent of gross domestic product.

Even as the Duterte administration is down to its last 10 months, the National Economic and Development Authority is also making public the amendments to Ambisyon 2022 cognizant of the impact of the pandemic and making plans grounded to the changing terrain. Harking on 'matatag, maginhawa and panatag,' The President goes back to his base with this proposed budget and leaves a strong Republic to the next administration, fighting for Juan and building a nation. It would be interesting to see who among the so-called leaders can put together a budget and run such a platform on ensuring voters how they plan to use taxpayers' money. On these three points alone, who will stand up to offer a credible plan is a challenge put forth to all.

 

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About the Author
Malou Tiqiua is the Founder/General Manager of PUBLiCUS Asia Inc. A noted political management expert in the Philippines and Asia, she brings over 20 years of professional experience in public, private and the academe combined. Author of the comprehensive book on electoral campaigns in the Philippines, "Campaign Politics", Malou is a graduate of the University of the Philippines with a Political Science degree and a Master of Public Administration. She completed her second master's degree (MA in Political Management) from the Graduate School of Political Management, George Washington University.
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