The 2014 Budget and Update

BY: Professor Emeritus Leonor Magtolis BrionesU.P. National College of Public Administration and Governance

Lead Convenor, Social Watch PhilippinesChair, People’s Public Finance Institute

2014 Budget Analysis ForumMalcolm Hall Auditorium

University of the Philippines, DilimanFebruary 28, 2014

The 2014 Budget

WHAT THE 2014 NATIONAL BUDGET WHAT THE 2014 NATIONAL BUDGET LOOKS LIKELOOKS 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 The first smaller box is composed of two even smaller boxes: the of two even smaller boxes: the budgets of agencies and the budgets of agencies and the special purpose funds. in the first special purpose funds. in the first of the two smaller boxes are the of the two smaller boxes are the agencies with agencies with the ten highest the ten highest budgetsbudgets

General Appropriations

Act Ph1.4 trillion

Special Purpose FundsPh 282.5 billion

Agency BudgetsPh 1.18 trillion

The Box on the Agency BudgetsTop 12 Agencies, FY 2014 (NEP, GAB, GAA)Congress spends practically all of its time on this box.Dept. FY 2014

Proposed (NEP)

(‘000)

R a n k

FY 2014 GABHouse-

approved

(‘000)

R a n k

FY 2014 Approved

(GAA)

(‘000)

R a n k

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 The Box on Special Purpose Funds is of special interest to civil society.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

Miscellaneous Personnel Benefits Fund 80,713,614,000 53,535,086,000

Pension and Gratuity Fund (formerly Retirement Benefits Fund)

120,495,952,000 120,495,952,000

Rehabilitation and Reconstruction Program

- 20,000,000,000

Priority Development Assistance Fund1 25,240,000,000 0

Feasibility Studies Fund 400,000,000 400,000,000

TOTAL 310,047,901,0002 282,569,635,000

Source: National Expenditure Program: DBM, 2014; FY 2014 General Appropriations Act (RA 10633)

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 Fund2 Inclusive of PhP2.072 Million Retirement and Life Insurance Premium

Where did the Realigned PDAF go?Where did the Realigned PDAF go?

ITEM MFO/PROG/PROJNEP 2014

In PhP ‘000GAA 2014

In PhP ‘000Variance

In PhP ‘000

Department of Health

Line 46 Page 279 Annex A Vol 1

Assistance to Indigent Patients either Confined or Out-Patients in Govt Hosps/Specialty Hosps/LGU Hosps/Philippine General Hosp/West Visayas Hosp (new budget item)

0 3,193,950 3,193,950

TOTAL In PHP ‘000

3,193,950

Department of Social Welfare and Development


Protective services for individuals and families in especially difficult circumstances

1,449,110 5,539,110 4,090,000

TOTAL In PHP ‘000

4,090,000



In PhP ‘000

GAA 2014In PhP ‘000

VarianceIn PhP ‘000

Commission on Higher Education


Provision of Assistance, Incentives, Scholarships and Grants (Central Office)

539,344 4,635,664 4,096,320

TOTAL In PHP ‘000

4,096,320



In PhP ‘000GAA 2014


In PhP ‘000Department of Labor and Employment


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 self-organization for plantation workers (Central Office)

1,508,353 2,530,353 1,022,000


Operation of the TESDA Regional and Provincial Offices, including Regional Technical Education & Skills Development Centers (PTESDCs)

1,379,080 2,405,616 1,026,536

TOTAL In PHP ‘000

2,887,433 4,935,969 2,048,536



In PhP ‘000GAB 2014


In PhP ‘000Department of Public Works and HighwaysLine 23 Page 583 Annex A Vol 2

DPWH-MFO 1 National Road Network Services

91,126,208 94,061,423 2,935,215


DPWH-MFO 2 Flood Management Services

28,870,595 29,339,169 468,574


DPWH MFO 3 Maintenance and Construction Services of Other Infrastructures

16,308,673 16,789,673 481,000

Line 21 62 Annex A Vol 2

Locally Funded Projects

21,895,864 25,407,075 3,511,211

TOTAL In PHP ‘000

158,201,340 165,597,340 7,396,000

Summary of PDAFSummary of PDAF--Related Budgetary Related Budgetary Adjustments and RealignmentsAdjustments and RealignmentsDEPT/AGENCY

NEP 2014In PhP ‘000

GAA 2014In PhP ‘000

VarianceIn PhP

‘000

DPWH 158,201,340 165,597,340 7,396,000DOH 0 3,193,950 3,193,950DSWD 1,449,110 5,539,110 4,090,000DOLE 2,887,433 4,935,969 2,048,536

CHED 539,344 4,635,664 4,096,320

TOTAL In PHP ‘000

25,686,536

In PhP ‘000TOTAL PDAF-Related Adjustments & Realignments (GAB 2014)

25,686,536

Amount of PDAF + OVP Locally Funded Projects (NEP 2014)

25,440,000

VarianceIn PHp ‘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 House-approved budget bill to accommodate further fund increases in the six relevant agencies?

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

Tax Refunds 9,969,209,000 15,518,556,000 -

Pension under RA 2087 & 5059

331,000 331,000 331,000

Grant Proceeds 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

Rewards and Incentives Fund - 2,182,808,000 -

Special accounts in the general fund

26,834,442,000 19,240,064,000 21,116,662,000

TOTAL 723,628,575,000 755,219,215,000 796,029,175,000

Source: GAA 2012 -2014: DBM, 2014

The Box on Automatic Appropriations is not The Box on Automatic Appropriations is not reviewed by congress.reviewed by congress.

Note: Total amounts of the lump sum items under Automatic Appropriations were only fleshed out in the House-approved General Appropriations Bill

Allocation by RegionAllocation by Region

Source: Budget of Expenditure and Sources of Financing: DBM, 2012-2014

Where are the poor? Where are the poor? The 16 poorest provincesThe 16 poorest provinces

Province 2012 Poverty Incidence (%)

Island Region

Lanao del Sur

67.3 Mindanao

Eastern Samar

55.4 Visayas

Apayao 54.7 Luzon

Maguindanao 54.5 Mindanao

Zamboangadel Norte

48.0 Mindanao

Sarangani 46.0 Mindanao

North Cotabato

44.8 Mindanao

Negros Oriental

43.9 Visayas

Northern Samar

43.5 Visayas

Source: 2012 Full Year Official Poverty Statistics, National Statistical Coordination Board

*10 of the 16 poorest provinces are situated in Mindanao; 3 out of 4 in Visayas from the Samar provinces

Province 2012 Poverty Incidence (%)

Island Region

Western Samar

43.5 Visayas

Bukidnon 41.5 Mindanao

Lanao del Norte

41.4 Mindanao

Camiguin 41.0 Mindanao

Masbate 40.6 Luzon

Sultan Kudarat

40.4 Mindanao

Sulu 40.2 Mindanao

There are still items which There are still items which are not listed in the are not listed in the expenditure program.expenditure program.still another box with a still another box with a different color. different color. Inside this Inside this box are two boxes: off box are two boxes: off budget items and direct budget items and direct remittances. the other box remittances. the other box contains the contains the unprogrammedunprogrammedexpenditures. expenditures.

Not in the Expenditures/ Not in the Gen. Appropriations Act

Unprogrammed FundPh 139 billion

Off Budget items and Direct RemittancesPh 40.6 billion

OUTSIDE THE EXPENDITURES BOX

UNPROGRAMMED FUNDS (in ‘000)

GAA 2012 GAA 2013 2014 Proposed

NEP & GAB

GAA 2014

Budgetary Support to GOCCs (Recording of Relent Loans in the 2014 NEP)

25,214,549 16,826,406 3,036,268 3,036,268

Support to Foreign-Assisted 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…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

TOTAL (in ‘000) 152,821,845 117,548,371 139,903,759 139,903,759*

Source: GAA 2012 & 2013; National Expenditure Program: DBM, 2014; FY 2014 General Appropriations Bill (HB 2630)

* 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.

Outside the Box…Outside the Box…

Studying the budget and expenditures of governnent is Studying the budget and expenditures of governnent is like opening a box within a box within a box within a like opening a box within a box within a box within a box.... people think the national budget is one huge, box.... people think the national budget is one huge, huge box. Actually it is a series of smaller boxes. huge box. Actually it is a series of smaller boxes. The The people don’t see all of these boxes. Regulation and people don’t see all of these boxes. Regulation and accountability vary from one box to another.accountability vary from one box to another.

The 2014 Budget and Update

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Transcript of The 2014 Budget and Update