The 2014 Budget
BY: Professor Emeritus Leonor Magtolis Briones U.P. National College of Public Administration and Governance Lead Convenor, Social Watch Philippines Chair, People’s Public Finance Institute 2014 Budget Analysis Forum Malcolm Hall Auditorium University of the Philippines, Diliman February 28, 2014
WHAT THE 2014 NATIONAL BUDGET LOOKS LIKE The Budget is like a huge, huge box. When it is opened, there are smaller boxes.
National Expenditure Program Ph2.264 trillion
General Appropriations Act Ph1.4 trillion
Automatic Appropriations Ph796 billion
The first smaller box is composed of two even smaller boxes: the budgets of agencies and the special purpose funds. in the first of the two smaller boxes are the agencies with the ten highest budgets
General Appropriations Act Ph1.4 trillion
Agency Budgets Ph 1.18 trillion
Special Purpose Funds Ph 282.5 billion
The Box on the Agency Budgets Top 12 Agencies, FY 2014 (NEP, GAB, GAA) Congress spends practically all of its time on this box. Dept.
FY 2014 Proposed (NEP)
Ran k
(‘000)
FY 2014 GAB Houseapproved
Ran k
(‘000)
FY 2014 Approved (GAA)
Ran k
(‘000)
DepEd
281,751,791
1
281,751,791
1
281,774,247
1
DPWH
200,265,553
2
207,321,553
2
206,634,047
2
DILG
99,595,064
3
100,183,030
3
100,295,430
3
DND
82,195,121
4
82,195,121
5
82,265,071
6
DOH
80,807,312
5
85,123,939
4
84,356,933
4
DSWD
78,876,694
6
84,540,929
6
83,304,463
5
DA
69,473,867
7
68,576,751
7
68,596,751
7
DOTC
45,161,306
8
45,161,306
8
45,461,306
8
SUCs
34,650,625
9
34,650,625
9
35,934,625
9
DENR
23,359,611
10
23,359,621
10
23,345,621
10
DAR
20,002,768
11
20,002,768
11
20,002,768
11
DOLE
10,132,033
15
13,423,273
12
12,177,273
12
Source: GAA 2012-2014; FY 2014 General Appropriations Bill (HB 2630)
The Box on Special Purpose Funds is of special interest to civil society. SPECIAL PURPOSE FUNDS
2014 National Expenditure Program
2014 Gen. Appropriations Act
Budgetary Support to Government Corporations
46,696,697,000
46,255,210,000
Allocation to Local Government Units
19,705,022,000
19,588,843,000
National Disaster Risk Reduction Management Fund (formerly Calamity Fund)
7,500,000,000
13,000,000,000
Contingent Fund
1,000,000,000
1,000,000,000
DepEd School Building Program
1,000,000,000
1,000,000,000
E-Government Fund
2,478,900,000
2,478,900,000
International Commitments Fund
4,815,644,000
4,815,644,000
80,713,614,000
53,535,086,000
120,495,952,000
120,495,952,000
-
20,000,000,000
25,240,000,000
0
400,000,000
400,000,000
310,047,901,0002
282,569,635,000
Miscellaneous Personnel Benefits Fund Pension and Gratuity Fund (formerly Retirement Benefits Fund) Rehabilitation and Reconstruction Program Priority Development Assistance Fund1 Feasibility Studies Fund TOTAL 1
Under the FY 2014 General Appropriations Act, the P25.24 Billion Priority Development Assistance Fund is realigned to the following: CHED, DOH, DSWD, DOLE-TESDA, DPWH, UP System, PNP, AFP, and NDRRM Fund 2 Inclusive of PhP2.072 Million Retirement and Life Insurance Premium
Source: National Expenditure Program: DBM, 2014; FY 2014 General Appropriations Act (RA 10633)
Where did the Realigned PDAF go? ITEM
MFO/PROG/PROJ
Department of Health Assistance to Indigent Patients either Confined or OutPatients in Govt Line 46 Page Hosps/Specialty 279 Annex A Hosps/LGU Vol 1 Hosps/Philippine General Hosp/West Visayas Hosp (new budget item) TOTAL In PHP ‘000
NEP 2014 In PhP ‘000
GAA 2014 In PhP ‘000
Variance In PhP ‘000
0
3,193,950
3,193,950
Department of Social Welfare and Development Protective services for Line 5 Page individuals and 453 Annex A 1,449,110 families in especially Vol 1 difficult circumstances TOTAL In PHP ‘000
3,193,950
5,539,110
4,090,000
4,090,000
Where did the Realigned PDAF go? ITEM
MFO/PROG/PROJ
NEP 2014 In PhP ‘000
GAA 2014 In PhP ‘000
Variance In PhP ‘000
Commission on Higher Education Line 10 Page 573 Annex A Vol 1
TOTAL In PHP ‘000
Provision of Assistance, Incentives, Scholarships and Grants (Central Office)
539,344
4,635,664
4,096,320
4,096,320
Where did the Realigned PDAF go? NEP 2014 In PhP ‘000 Department of Labor and Employment ITEM
Line 29 Page 345 Annex A Vol 1
Line 55 Page 372 Annex A Vol 1 TOTAL In PHP ‘000
GAA 2014 In PhP ‘000
Variance In PhP ‘000
1,508,353
2,530,353
1,022,000
1,379,080
2,405,616
1,026,536
4,935,969
2,048,536
MFO/PROG/PROJ
Conduct of training, livelihood and enterprise development and other capacity building programs for students, youths, and disabled workers and for the rural workers including programs for selforganization for plantation workers (Central Office) Operation of the TESDA Regional and Provincial Offices, including Regional Technical Education & Skills Development Centers (PTESDCs)
2,887,433
Where did the Realigned PDAF go? NEP 2014 In PhP ‘000 Department of Public Works and Highways Line 23 Page DPWH-MFO 1 National 583 Annex A 91,126,208 Road Network Services Vol 2 Line 19 Page DPWH-MFO 2 Flood 28,870,595 773 Annex A Management Services Vol 2 DPWH MFO 3 Line 86 Page Maintenance and 16,308,673 807 Annex A Construction Services of Other Vol 2 Infrastructures Line 21 Page Locally Funded 21,895,864 962 Annex A Projects Vol 2 TOTAL 158,201,340 In PHP ‘000 ITEM
MFO/PROG/PROJ
GAB 2014 In PhP ‘000
Variance In PhP ‘000
94,061,423
2,935,215
29,339,169
468,574
16,789,673
481,000
25,407,075
3,511,211
165,597,340
7,396,000
Summary of PDAFPDAF-Related Budgetary Adjustments and Realignments DEPT/ AGENCY DPWH DOH DSWD DOLE CHED TOTAL In PHP ‘000
NEP 2014 GAA 2014 In PhP ‘000 In PhP ‘000 158,201,340 165,597,340 0 3,193,950 5,539,110 1,449,110 4,935,969 2,887,433 539,344
4,635,664
Variance In PhP ‘000 7,396,000 3,193,950 4,090,000 2,048,536 4,096,320 25,686,536
In PhP ‘000 TOTAL PDAFRelated Adjustments & Realignments (GAB 2014) Amount of PDAF + OVP Locally Funded Projects (NEP 2014) Variance In PHp ‘000
25,686,536
25,440,000
246,536
Although marginal, the variance of PhP 246,536,000 means that budgetary adjustments and/or realignments were made to the five relevant agencies coming from other fund sources on top of the PDAF-realigned funds. The question is: Which budget items were slashed or removed in the Houseapproved budget bill to accommodate further fund increases in the six relevant agencies?
The Box on Automatic Appropriations is not reviewed by congress. AUTOMATIC APPROPRIATIONS
GAA 2012
GAA 2013
GAA 2014
Interest Payments for Debt Service
333,107,000,000
333,902,000,000
352,652,000,000
Internal Revenue Allotment
273,309,592,000
302,304,001,000
341,544,726,000
9,969,209,000
15,518,556,000
-
331,000
331,000
331,000
1,094,084,000
545,844,000
6,450,000
Custom duties and taxes, including Tax expenditures
33,043,000,000
26,900,000,000
26,900,000,000
Net Lending
23,000,000,000
26,500,000,000
24,950,000,000
Employees’ retirement and life insurance premiums
23,270,917,000
28,125,611,000
28,859,006,000
-
2,182,808,000
-
26,834,442,000
19,240,064,000
21,116,662,000
723,628,575,000
755,219,215,000
796,029,175,000
Tax Refunds Pension under RA 2087 & 5059 Grant Proceeds
Rewards and Incentives Fund Special accounts in the general fund TOTAL
Note: Total amounts of the lump sum items under Automatic Appropriations were only fleshed out in the House-approved General Appropriations Bill Source: GAA 2012 -2014: DBM, 2014
Allocation by Region
Source: Budget of Expenditure and Sources of Financing: DBM, 2012-2014
Where are the poor? The 16 poorest provinces Province
2012 Poverty Inciden ce (%)
Island Region
Province
2012 Poverty Inciden ce (%)
Island Region
Lanao del Sur
67.3
Mindanao
Western Samar
43.5
Visayas
Eastern Samar
55.4
Visayas
Bukidnon
41.5
Mindanao
Apayao
54.7
Luzon
41.4
Mindanao
Maguindanao
54.5
Mindanao
Lanao del Norte Camiguin
41.0
Mindanao
Zamboanga del Norte
48.0
Mindanao
Masbate
40.6
Luzon
Sarangani
46.0
Mindanao
40.4
Mindanao
North Cotabato
44.8
Mindanao
Sultan Kudarat Sulu
40.2
Mindanao
Negros Oriental
43.9
Northern Samar
43.5
Visayas Visayas
*10 of the 16 poorest provinces are situated in Mindanao; 3 out of 4 in Visayas from the Samar provinces
Source: 2012 Full Year Official Poverty Statistics, National Statistical Coordination Board
OUTSIDE THE EXPENDITURES BOX There are still items which are not listed in the expenditure program. still another box with a different color. Inside this box are two boxes: off budget items and direct remittances. the other box contains the unprogrammed expenditures.
Off Budget items and Direct Remittances Ph 40.6 billion
Not in the Expenditures/ Not in the Gen. Appropriations Act
Unprogrammed Fund Ph 139 billion
Outside the Box… UNPROGRAMMED FUNDS (in ‘000) Budgetary Support to GOCCs (Recording of Relent Loans in the 2014 NEP)
GAA 2012
GAA 2013
2014 Proposed NEP & GAB
GAA 2014
25,214,549
16,826,406
3,036,268
3,036,268
Support to ForeignAssisted Projects
1,224,790
2,226,655
16,124,491
6,124,491
General Fund Adjustments
1,000,000
1,000,000
1,000,000
1,000,000
Support for Infrastructure Projects and Social Programs
26,000,000
23,000,000
56,349,000
20,000,000
Disaster Relief & Mitigation Fund (formerly Disaster Risk Reduction and Management)
14,200,000
-
-
3,000,000
Debt Management Program
85,182,506
60,363,130
25,000,000
1,000,000
Source: GAA 2012-2014: DBM, 2014; FY 2014 General Appropriations Act (RA 10633)
Outside the Box… UNPROGRAMMED FUNDS (in ‘000)
GAA 2012
GAA 2013
2014 Proposed NEP & GAB
GAA 2014
AFP Modernization Program
-
10,632,180
10,894,000
5,000,000
Risk Management Program
-
-
30,000,000
20,000,000
Payment of Total Administrative Disability Pension
-
3,000,000
-
243,000
Reconstruction and Rehabilitation Program
-
-
-
80,000,000
People’s Survival Fund
-
500,000
500,000
500,000
117,548,371 139,903,759
139,903,759*
TOTAL (in ‘000)
152,821,845
*
Items under the Unprogrammed Fund were reorganized to form a new fund, Reconstruction & Rehabilitation Program. The complete listing of line items are indicated in the Details of the Budget for 2014. Total amount proposed from the National Expenditure Program is retained in the General Appropriations Act. Source: GAA 2012 & 2013; National Expenditure Program: DBM, 2014; FY 2014 General Appropriations Bill (HB 2630)
Studying the budget and expenditures of governnent is like opening a box within a box within a box within a box.... people think the national budget is one huge, huge box. Actually it is a series of smaller boxes. The people don’t see all of these boxes. Regulation and accountability vary from one box to another.