Sponsorship Speech: Proposed 2019 General Appropriations Act

Sponsorship Speech of Senator Loren Legarda
on the Proposed 2019 General Appropriations Act
4 December 2018

Mr. President, esteemed colleagues in this Chamber:

During the last four years, I have had the distinct honor and privilege to serve this chamber as Chairperson of the Senate Committee on Finance.  I have always considered this the highest demonstration of my colleagues’ trust and confidence as I sponsored the national budget, the most important piece of legislation that we, as a collegial and independent institution, have to enact into law.

This being one of the last of my official acts as Chair of the Committee, please allow me first to express my sincere thanks and gratitude to you for such an honor.  Certainly, I will look back at my tenure in this Committee only with happy reminiscences of your utmost cooperation and support.

Mr. President and esteemed colleagues:

“We have known for some time that we have to worry about the impacts of climate change on our children’s and grandchildren’s generations. But we now have to worry about ourselves as well.”

Spoken on 26 April 2002 by Margaret Beckett, the British Secretary of State for Environment, these two poignant sentences are a timely reminder as I humbly present to you for your consideration and assent Committee Report No. 538, which embodies the Senate Amendments to the 2019 General Appropriations Bill approved by the House of Representatives.

Today, I am pleased to report, Mr. President, that our Constitutionally-mandated task to “propose or concur with amendments” to the national budget for fiscal year 2019 is almost complete and is now ready for plenary discussion, after holding 52 budget hearings, several briefings, and a comprehensive discussion with the agencies constituting the Development Budget Coordinating Committee (DBCC) to thresh out the finer details of the 2019 national budget.

But that is beside the point. To borrow a maxim, what counts is not the number of hours you put in, but how much you put in the hours. I trust that this will be evident in the proposed national budget I am about to present.

In the course of your Committee’s deliberation on the proposed national budget, this representation could not help but be reminded of Minister Beckett’s words, that “(w)e have now to worry about ourselves.”

And why not?

When the Duterte administration submitted to Congress the 2019 National Expenditure Program middle of this year, we heard the Secretary of Budget Benjamin Diokno assure us of this:

“This budget guarantees a better and more comfortable life for most Filipinos. It is a budget that will support strong, sustainable, and equitable growth, a budget that will make the Philippines better, fairer, safer, greener and more beautiful than what it was the year before.”

In the succeeding months since these words were enunciated, developments in our country and abroad, in geopolitics and in the global economy, as well as in our own development journey, showed that Congress, the Senate in particular, has had to revisit such re-assurances to ensure that we craft a national development tool—the 2019 budget—in near conformity, if not in full cadence, with the realities on the ground.

Mr. President and esteemed colleagues:

First, I wish to retell that it is of record that in the four years I have chaired the Committee on Finance, I have always underscored the need to speed up budget utilization and put underspending to a grinding halt. Slow utilization and deliberate underspending have always been the scourge of the national budget for years.

It is for this reason that we welcomed the Administration’s initiative to limit the availability of appropriations to one year. But to see is to believe. Let us look into the obligation rates of agencies if the current Administration indeed has been successful in minimizing underspending.

In both 2014 and 2015, underspending reached 13%. Forgone projects due to the said underspending amounted to P631 Billion. In 2017, underspending went down to just 3% or P85.2 Billion. According to the DBM, as of the first semester of the current year (2018), they have already exceeded the spending program by P34.3 Billion

The Administration has embarked on a massive public infrastructure program and strengthened human capital development as the means to pursue economic growth, from 6.5-7% in 2018 to 7-8% in 2022, and to reduce poverty from 21.6% in 2015 to 14% in 2022.

To realize this vision, it needs to ramp up spending and would need to reform the budget system to ensure that every peso from the people’s taxes go back to them through actual delivery of services and programs.

Towards this goal, the Executive has presented a National Expenditure Program for 2019 that is cash-based, which the DBM described as follows:

“Under this system, all government programs and projects budgeted for the fiscal year should be implemented and delivered within the same fiscal year. Goods and services delivered, inspected, and accepted until the end of the fiscal year will be settled within the same year, up to the 3-month period following the end of the fiscal year, or the Extended Payment Period (EPP).”[1]

An annual cash-based budget system means that agencies do not only obligate or award contracts for programs, activities and projects, but also ensure actual and full delivery of goods and services within the fiscal year.

However, in consideration of the first year of implementation of the Annual Cash-Based Budgeting System, the construction, inspection and payment for infrastructure outlays shall be extended until the end of June of the following year.

Macroeconomic assumptions

Dubbed as a modern and open cash-based budget for disciplined, accountable and faster service delivery, the 2019 national budget was crafted based on the macroeconomic assumptions presented and discussed during the Development Budget and Coordinating Committee (DBCC) briefing.

The People’s Budget

Based on such assumptions, the Executive proposed a national budget amounting to Php3.757 trillion for fiscal year 2019. It is Php10-billion lower than the 2018 national budget since it limits new appropriations to include only those programs that are ready for implementation and completion within the budget year.

The highest allocation by sector, based on the NEP, is still for social services at 36.7% of the budget, followed by economic services at 28.4%, general public service at 18.9%, debt burden at 11%, and defense at 5%.

Investing in the human capital remains the primary goal of the government as we provide the much needed support for education, particularly CHED’s Universal Access to Quality Tertiary Education at Php 43.3 Billion, and the DepEd’s Basic Educational Facilities (BEF) Program at Php 30.7 Billion and Government Assistance to Students in Private Schools and Non-DepEd Public Schools (GASTPE) at Php 32.1 Billion.

For the first time next year, teachers will receive the “Gantimpala sa Uliran at Responsableng Guro”, in recognition of their effort and dedication in educating our youth.  Php800 Million has been provided for this and this will be given in time for the World Teachers’ Day  celebration next year.

Our state colleges and universities (SUCs) will likewise be given support in terms of capital outlays for SUCs with zero allocation under the GAB for the upgrade and improvement of their facilities.

Php2.925 Billion has been provided for the implementation of the revised Compensation and Position Classification Plan for Faculty Position in SUCs and higher education institutions (HEIs) as implemented in National Budget Circular (NBC) No. 461.

To continue servicing the health care needs of Filipinos, an amount of P67.353 Billion is allocated for the National Health Insurance Program. Moreover, Php2 Billion has been allocated for the Health Facilities Enhancement Fund, which will be distributed across the country for the purchase of hospital equipment of rural health units, barangay health stations, local government-run hospitals and other hospitals under the Department of Health.

Another big-ticket program under social services is the DSWD’s Pantawid Pamilyang Pilipino Program at Php88.106 billion.

For economic services, infrastructure projects under the ‘Build Build Build’ program amount to Php909.7 Billion, which includes funding for the 35-km Metro Manila Subway Project Phase 1, which will be the first subway in the country, and the Mindanao Railway Project.

Our farmers and fisherfolks, many of whom rely on subsistence agriculture, will be better served through credit support and insurance, financial and technological resources, and irrigation and infrastructure support.  Php2.7 Billion is allocated for free irrigation program under the National Irrigation Program (NIA); while Php4.5 Billion is provided for the Bureau of Fisheries and Aquatic Resources (BFAR) to fund community fish landing centers, fiberglass boats and post-harvest fishing kits for our fisherfolks.

We have also caused the realignment of P20 billion within the unprogrammed fund to provide for standby appropriations for the rice and coconut farmers. The Php10 billion for the Rice Competitiveness Enhancement Fund is intended to fund farm machineries and equipment, the Rice Seed Development, propagation and promotion, credit assistance and rice extension services to farmers who will be affected by the tariffication of the quantitative import of rice.

The other Php10 billion is for the Coconut Farmers and Industry Development Fund which shall be used for infrastructure program, planting, replanting and establishment of hybrid coconut nurseries, intercropping and shared facilities, research and development and credit facilitation.

These two amendments, Your Honor, aim to uplift the living standard of our coconut and rice farmers which accounts for 25% of our labor force and have low daily income: P272 for coconut farmers, and P304 for rice farmers.

Local economic development will be supported through initiatives that will unlock the potential of micro, small and medium enterprises (MSMEs), boost agriculture, strengthen our competitiveness, promote tourism, as well as build resilience in our communities.

We have earmarked Php507.8 Million for the Shared Service Facilities (SSF) of the Department of Trade and Industry (DTI) which intends to increase the productivity of MSMEs by giving them access to efficient technologies, skills, knowledge, and systems. For the Department of Tourism, Php1.621 Billion has been allocated for marketing and product development.

To provide a secure, orderly and safe environment conducive to social and economic development, we supported the funding needs of the Philippine National Police and the Armed Forces of the Philippines, in the amounts of Php172.4 B and P177.7 B, respectively.

Meanwhile, we have provided P27.4 B for the foreign service which is the country’s first line of defense in the global arena. Geopolitical, economic and security realities require a strong Department of Foreign Affairs (DFA) that is fully supported in order that it may live up to its role as the prime agency of the government responsible for the pursuit of the country’s foreign policy – taking care not only of our relations with other countries, but also serving as the good brother or sister of every overseas Filipino.

Thus, the Senate provided for the funding needs of the DFA, including hazard pay of DFA employees in hardship posts and opening or reopening of consulates/embassies, especially where we have an increased number of overseas Filipino workers.

To ensure a more efficient judicial system, we are allocating P37.3 Billion for the Judiciary, of which P200 Million will be used for the hiring of personnel to help decongest the court dockets. We will also continue funding the construction of the Hall of Justice under the Justice infrastructure program amounting to P1 Billion. The lower courts are also provided P2.6 Billion in MOOE.

To improve our resilience to natural hazards and climate change, we have provided P5.2 Billion for the National Greening Program to cover the planting of 138 Million seedlings over a targeted area of 143 hectares, and P700 Million for the Solid Waste Management. Meanwhile, PAGASA will get P902 Million for weather and climate forecasting and warning provision. DPWH and MMDA will get P101.9 Billion and P1.4 Billion, respectively, for the Flood Management Control Program.

We have also allocated Php6.27 Billion for Quick Response Fund (QRF) lodged in the following agencies:

Finally, in line with our duty and commitment to ensure that our cultural integrity remains intact, we provided for the funding requirements amounting to P2.9 Billion for our cultural agencies.  This amount will be used for the promotion and preservation of our culture, language, and heritage.

Special and General Provisions

The Committee further submits, Mr. President, the following Special and General Provisions for the 2019 budget:

We introduced a special provision on Rice Wastage Reduction Measures which seeks to mandate the DA to adopt measures to reduce wastage of rice and provide specific guidelines for the appropriate handling, storage and transport of bagged grains to ensure prevention and reduction of physical, biological, and chemical hazards that affect the quality, quantity and safety of bagged grains during storage.

We are aware that planning at the local level needs a holistic approach thus, we have introduced a special provision that will ensure that local development plans are formulated based on a comprehensive consultation among the local development council, the local peace and order council and the local disaster risk reduction management council, along with other local sectoral councils/committees.

Joint meetings shall be conducted to enable local government units to come up with plans that are responsive to existing and emerging challenges as well as to formulate joint strategies to address such challenges.

The output of the LGUs shall be used by the national government agencies (NGAs), as a way of strengthening NGA-LGU interdependence in shaping their future development roadmaps and annual budget proposal.

We also introduced the provision on the ban on single-use plastics. It provides that DOT shall coordinate with the DENR and concerned LGUs to prohibit single-use plastics in all tourist destinations in the country. This will cover hotels, resorts, inns, restaurants, stores, and other similar establishments located within or near the tourist destinations.

Single-use plastics refer to those disposable plastics intended to be used only once before they are thrown away or recycled. These include, but are not limited to, grocery bags, food packages, bottles, cups, cutleries, straws, stirrers, containers, styrofoam, and sachets.

We are also encouraging the DOT to prioritize areas for ecotourism, protected and biodiversity conservation areas, heritage tourism sites, and agro-tourism areas in its tourism promotion activities.

A special provision on Food Forest Gardening provision has also been introduced. National government agencies and GOCCs shall adopt a food forest gardening program as a sustainable land use system for food production and other agricultural products for economic and societal development.

We will also reintroduce the 2018 Special Provisions that ensure the implementation of climate change adaptation and mitigation, building community resilience to natural hazards, promoting culture and the arts and pursuing the Sustainable Development Goals.

Mr. President and esteemed colleagues,

These are just some of the highlights of the proposed 2019 national budget. While pressed for time, we shall nevertheless perform our duty to pass a budget that is geared towards our collective desire to provide our people with programs and services that would usher in personal growth, community development and national progress.

On a final note, Mr. President, and on behalf of my Vice Chairs — Senators Angara, Aquino, Ejercito, Lacson and Villar —  I would also like to acknowledge, with profound thanks and appreciation, the relentless support and dedication of the Legislative Budget Research and Monitoring Office (LBRMO), headed by Atty. Yolly Doblon, whose institutional knowledge and patience no Finance Chair can ever do without.

With that, the Committee on Finance, humbly submits Committee Report No. 538 for plenary consideration.  I earnestly hope that this proposed legislation will merit the approval of this chamber.

Thank you.

[1] Briefer on the FY 2019 Proposed National Budget