Proposed 2010 RP budget to sustain economic recovery

Malacañang on Wednesday formally submitted its proposed 2010 national budget to the House of Representatives, indicating its continued commitment to the country’s social welfare and economic recovery.

The P1.541 trillion national budget is eight percent (or P115 billion) higher than last year’s, Budget Secretary Rolando G. Andaya Jr. said.

Besides sustaining the Philippines’ economic rebound, the increased budget will help the government “complete its infrastructure projects, develop human capital and well-being, and spur farm activity," he added.

Of the P864 billion allotted for maintenance and other operating expenses (MOOE), roughly one-third – or P340.8 billion – has been set aside to pay for the country’s financial obligations.

The debt service allotment covers P221.3 billion worth of domestic obligations. The remaining P119.5 billion has been set for foreign creditors.

One-third of the MOOE has also been earmarked for social services, including P235 billion for education and manpower and P101 billion for social security and welfare.

A total of P10 billion was also allocated for direct cash transfers to 700,000 poor families.

Economic services, which cover agriculture and environment, were also given allotments of P356 billion, under the MOOE, with defense getting P73.6 billion, and general public services P275.1 billion.

Some P494 billion has been allotted for salaries, pensions, and premium contributions for government personnel, up from P423 billion this year.

The 15.2 percent climb in salaries is due to the passage of the Salary Standardization Law III. The law took effect in June, requiring an additional P68.4 billion on its second year of implementation in 2010.

Recruitment of 14,729 new teachers will cost the government P2.1 billion while the hiring of 10,000 additional policemen will cost of P1.4 billion, Andaya said.

Capital outlays (CO), which includes portions of the Internal Revenue Allotment (IRA) for local governments, was given a P235 billion in funds next year.

Of the infrastructure budget, P72 billion will be spent on roads and bridges, P5.8 billion on new school buildings, P27.6 billion for farm infrastructure, and P1.5 billion for bringing clean water to poor communities.

Funds for infrastructure have been “calibrated to complete projects promised by President Gloria Macapagal Arroyo in her State of the Nation Addresses," Andaya said.

Education, public works departments receive highest funds

In the meantime, the Department of Education secured a P172.8 billion allotment, making it the agency with the largest budget allocation.

Coming in at second is the public works department which was given P105.2 billion.

The Department of Interior and Local Government came in third, securing P65.4 billion in annual funds.

The Departments of Defense and Agriculture received yearly allotments of P62.7 billion and P37.8 billion, respectively.

The health department has the sixth-largest budget at P28.5 billion, followed by the departments of agrarian reform at P19.7 billion, social welfare and development at P16.5 billion, justice at P13 billion, and foreign affairs at P12.5 billion.

The Commission on Elections will get P10.6 billion for the May 2010 polls.

The proposed budget has a programmed P233.4 billion deficit, which is 2.8 percent of the country’s gross domestic product (GDP) as compared to 3.2 percent in 2009, Andaya added.

The proposed 2010 General Appropriation Act is also based on a growth target of 2.6-3.6 percent, an inflation rate of 3.5-5.5 percent, a Dubai crude oil price range of $60-$80 per barrel, and a population of 94.01 million.

Although interest payments are expected to rise next year, the country’s debt to GDP ratio – which measures the country’s ability to settle its obligations – will not increase, Andaya said.

In 2003, the Philippines’ debt to GDP ratio reached 38.3 percent, declining to 24.1 percent by the end of 2008, a level “where it will remain," Andaya said.

Andaya also asked Congress to pass the 2010 budget “with dispatch."

Speaker Prospero Nograles assured Malacaňang that the House will do its best to finish budget deliberations on time.

"I am promising that there would be no re-enacted budget next year," Nograles told reporters in a press conference after Andaya formally submitted next year’s proposed budget. - With Johanna Camille L. Sisante, GMANews.TV