Professor Emeritus Leonor Magtolis Briones

Former National Treasurer

Lead Convenor, Social Watch Philippines

October 11, 2014, 2014
Scrap Pork/Abolish Pork Networks
Dela Salle University
No improvement in poverty for the
past seven years
Source: 2012 Full Year Official Poverty Statistics; 2013 First Semester Official Poverty Statistics, PSA-NSCB
Poverty Incidence (PI) and Subsistence Incidence among Population (%),
2006, 2009, 2012 and 2013 1
st
sem
Fiscal Program
PARTICULARS
2013
Adjusted
Program
2014
Program
2015
Proposed
2016
Proposed
Levels in Billion Pesos
Revenues
Disbursements
Surplus/(Deficit)
Obligation Budget

Per cent of GDP
Revenues
Disbursements
Surplus/(Deficit)
Obligation Budget

Growth Rate
Revenues
Disbursements
Surplus/(Deficit)*
Obligation Budget

1,745.9
1,983.9
(238.0)
2,005.9


14.7
16.7
(2.0)
16.8


13.7
11.6
2.0
9.7

2,018.1
2.284.3
(266.2)
2,264.6


15.5
17.5
(2.0)
17.4


15.6
15.1
(11.9)
12.9

2,337.3
2,622.6
(285.3)
2,605.9


16.2
18.2
(2.0)
18.0


15.8
14.8
(7.1)
15.1

2,760.8
3,082.8
(322.0)
3,077.9


17.1
19.1
(2.0)
19.0


18.1
17.5
(12.9)
18.1
GDP
Gross Financing Mix (%)
Foreign
Domestic
11,914.5

8.0
92.0
12,990.3

15.0
85.0

14,463.5

11.0
89.0
16,179.0

9.0
91.0
Notes: *A positive growth rate indicates an improvement in the fiscal balance
Source: DBM NBM 119 based on DBM, DOF, and NEDA data
Sources of Revenue
Sources of Tax Revenues, FY 2015
*Includes incremental revenues for BIR from Republic Act No. 10351 (Sin Tax Reform Law of 2012)
Source: FY 2015 BESF, primarily from the Department of Finance
Revenue Program

Amount (in million pesos)
Net Income Taxes and Profits
1,032,120
Tax on Property
5,017
Taxes on Domestic Goods and Services
700,821
Taxes in International Trade and Transactions
456,468
Total
2,337,333

Amount (in million pesos) Growth rate (%)
2013 2014 2015 2013-2014 2014-2015
Tax Revenues 1,535,698 1,879,918 2,194,427 22.41 16.73
Non-tax Revenues 177,459 136,133 140,906 (23.29) 3.51
Privatization 2,936 2,000 2,000 (31.88) 0.0
Total 1,716,093 2,018,051 2,337,333 17.6 15.82
National Government Financing
FY 2013 to FY 2015 (in million pesos)
Particulars 2013
a/
2014 2015
GROSS FOREIGN BORROWINGS 33,767 130,500 95,700
Net Foreign Borrowings (83,821) 4,236 20,898
GROSS DOMESTIC BORROWINGS 520,934 620,011 605,122
Net Domestic Borrowings 402,939 279,734 289,537
NET FINANCING 319,118 283,969 310,436
CHANGE IN CASH 65,933 16,002 24,978
TOTAL NET FINANCING REQUIREMENT 164,062 266,247 283,687
a/ Based on actual data reported in the Cash Operations Report (COR)
Source: FY 2015 BESF, primarily from the Bureau of the Treasury
Debt trap. While government is planning to borrow a total of
P700.822 Billion, it will only receive P310.435 Billion for both
peso and foreign borrowings due to costs of borrowing and
other charges.
Debt Servicing in the P2.606 T budget
does not reflect Principal Amortization
NG Debt Service Expenditures
(in million pesos)
2013 2014 2015
Interest Payments 323,434 352,652 372,863
Domestic 222,317 255,970 277,565
Foreign 101,117 96,682 95,298
Principal Amortization 235,583 466,542 390,386
Domestic 117,995 340,277 315,585
Foreign 117,588 126,264 74,802
GRAND TOTAL 559,017 819,194 763,250
Source: FY 2015 BESF, primarily from the Bureau of the Treasury
Source: FY 2015 Budget of Expenditure and Sources of Financing: DBM
Note: Net Lending amounts to PhP16.626B in 2013, PhP24.95Bin 2014 and PhP26.5B for
2015. This is equivalent to percentage distribution of 0.83%, 1.1% and 1.02% in
expenditure program by sector respectively.
Allocation by Sector
I
n

B
i
l
l
i
o
n
s

o
f

P
e
s
o
s

I
n

B
i
l
l
i
o
n
s

o
f

P
e
s
o
s

*Are Personal Services understated?
Source: FY 2015 Budget of Expenditure and Sources of Financing: DBM
Allocation By General Expense Class
Allocation by Region
Source: FY 2015 Budget of Expenditure and Sources of Financing: DBM
In Billion Pesos
Where are the poor?
The 16 poorest provinces
Province 2012
Poverty
Inciden
ce (%)
Island
Region
Lanao del
Sur
67.3 Mindanao
Eastern
Samar
55.4 Visayas
Apayao 54.7 Luzon
Maguindanao 54.5 Mindanao
Zamboanga
del 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
Inciden
ce (%)
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
WHAT THE 2015 NATIONAL BUDGET
LOOKS LIKE
The Budget is like a huge, huge box.
When it is opened, there are smaller
boxes.
National
Expenditure
Program
Ph2.606 trillion
draft
General
Appropriations Act
Ph1.74 trillion

Automatic
Appropriations
Ph866.2 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
PhP 1.74 trillion


Special Purpose
Funds
PhP 378.5 billion

Agency
Budgets
PhP 1.361
trillion

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.

Not in the
Expenditures/ Not in
the Gen.
Appropriations Act
Unprogrammed
Funds
Ph 123 billion
Off Budget items
and Direct
Remittances
Ph 40.6 billion


OUTSIDE THE EXPENDITURES
BOX
Out of the proposed
expenditures of PhP 2.606
trillion, Congress will only
debate in detail PhP 1.361
trillion of government agency
budgets, out of which PhP
761.231 billion are Personnel
Expenditures. This leaves P
599.769 billion for detailed
Congressional scrutiny.

Proposed Expenditures
PhP 2.606 trillion


Agency Budgets
PhP 1.361 trillion


Personnel
Expenditures
PhP 761.231
billion


Congressional
Scrutiny
599. 769
billion


Top 12 Agencies, FY 2013-2015
Dept. FY 2013 GAA


(000)
R
a
n
k
FY 2014 GAA


(000)
R
a
n
k
FY 2015 NEP

(000)
R
a
n
k
DepEd 232,595,221 1 281,774,247 1 318,896,319 1
DPWH 155,517,533 2 206,634,047 2 287,825,956 2
DSWD 56,333,858 6 83,304,463 5 108,880,894 3
DILG 91,164,442 3 100,295,430 3 104,571,005 4
DND 80,420,311 4 82,265,071 6 99,469,167 5
DOH 51,074,586 5 84,356,933 4 87,209,479 6
DOTC 34,185,121 8 45,461,306 8 52,874,342 7
DA 64,474,099 5 68,596,751 7 48,435,703 8
SUCs 32,770,703 9 35,934,625 9 41,224,509 9
ARMM 13,172,022 13 19,615,029 12 24,299,773 10
DENR 23,135,850 10 23,345,621 10 20,849,411 11
The
Judiciary
17,006,107 12 18,559,816 13 19,499,422 12
Source: GAA, 2013-2014; NEP: DBM, 2015
Proposed Special Purpose Funds for 2015
SPECIAL PURPOSE FUNDS
(in 000)

GAA 2013
GAA 2014

NEP 2015
Budgetary Support to
Government Corporations


44,664,500


46,255,210
61,319,392
Allocation to Local
Government Units

17,529,452

19,588,843
33,131,405
National Disaster Risk
Reduction Management Fund


7,500,000


13,000,000
14,000,000
Contingent Fund 1,000,000 1,000,000
2,000,000
DepEd School Building
Program

1,000,000

1,000,000

-
E-Government Fund 1,000,000 2,478,900
1,000,000
International Commitments
Fund

2,636,723

4,815,644
7,443,963
Miscellaneous Personnel
Benefits Fund


69,089,206


53,535,086
118,142,443
Pension and Gratuity Fund
(formerly Retirement
Benefits Fund)



98,715,143



120,495,952
140,566,386
Source: GAA 2013-2014: DBM; FY 2015 National Expenditure Program

Proposed Special Purpose Funds for 2015
1
The PhP22.4 Billion Priority Social and Economic Projects Fund proposed in the 2013 National
Expenditure Program was later realigned to concerned agencies as a result of the campaign of
ABI for the 2013 Budget.
SPECIAL
PURPOSE FUNDS
(in 000)
GAA 2013 GAA 2014 NEP 2015

Priority
Development
Assistance Fund



24,790,000



-



-
Priority Social and
Economic Projects
Fund
1



-
Feasibility Studies
Fund -

400,000

-
Rehabilitation &
Reconstruction
Program



20,000,000



1,000,000
TOTAL (in 000)
267,925,024 282,569,635 378,603,589
Source: GAA 2013-2014: DBM; FY 2015 National Expenditure Program

UNPROGRAMMED
FUNDS (in 000)
GAA 2013 GAA 2014 NEP 2015
Budgetary Support to GOCCs

16,826,406

3,036,268
5,060,762
Support to Foreign-Assisted
Projects

2,226,655

6,124,491
3,095,319
General Fund Adjustments (for
the Share of the ARMM
pursuant to R.A.9054; NEP
2015)



1,000,000



1,000,000
800,000
Support for Infrastructure
Projects and Social Programs
23,000,000


20,000,000
20,000,000
Disaster Relief & Mitigation
Fund
-

3,000,000
-
Debt Management Program
60,363,130 1,000,000 -
Proposed Unprogrammed Funds for 2015
Source: GAA 2013-2014: DBM; FY 2015 National Expenditure Program

UNPROGRAMMED
FUNDS (in 000)
GAA 2013 GAA 2014
NEP 2015

AFP Modernization
Program

10,632,180

5,000,000
10,000,000
Risk Management
Program -

20,000,000
30,000,000
Payment of Total
Administrative Disability
Pension


3,000,000


243,000 -
Reconstruction and
Rehabilitation Program
-


80,000,000 -
Peoples Survival Fund

500,000

500,000

-
Equity Value Buy-out of
the Metro Rail Transit
Corporation 0


0
53,900,000


TOTAL (in 000)


117,548,371


139,903,759
123,056,081
Proposed Unprogrammed Funds for 2015
Source: GAA 2013-2014: DBM; FY 2015 National Expenditure Program

AUTOMATIC
APPROPRIATIONS
(in 000)
GAA 2013 GAA 2014 NEP 2015
Interest Payments for Debt
Service

333,902,000

352,652,000,000
372,863,000
Internal Revenue Allotment 302,304,001 341,544,726,000
389,860,429
Tax Refunds
15,518,556 -


Pension under RA 2087 &
5059

331,000

331,000
331,000
Grant Proceeds 545,844 6,450
140,902
Custom duties and taxes,
including Tax expenditures

26,900,000

26,900,000
25,475,000
Net Lending 26,500,000 24,950,000 26,500,000
Employees retirement and
life insurance premiums

28,125,611

28,859,006
30,149,491
Rewards and Incentives
Fund

2,182,808 - -
Special accounts in the
general fund

19,240,064

21,116,662
21,242,275
TOTAL

755,219,215

796,029,175
866,231,428
Proposed Automatic Appropriations for 2015
Source: GAA 2013-2014: DBM; FY 2015 National Expenditure Program

Issues on Special Purpose Funds, Automatic
Appropriations and Unprogrammed Funds
Lump sum appropriations have always been
problematic

since these are not as detailed as regular appropriations,
they tend to be vulnerable to abuse.

accountability is sometimes difficult to establish and
documentation difficult

in the Philippines, lump sum appropriations include
special purpose funds, overall savings and
unprogrammed funds
To Summarize

Total projected National Expenditures-Ph2.758 trillion
General Appropriations - Ph1.740 trillion
Unprogrammed Expenditures- 123 billion
Off Budget Remittances- 29 billion
Automatic appropriations- 866 billion

General Appropriations Act to be
passed by Congress - Ph1.740 trillion
Special Purpose Funds- 379 billion
Agency Budgets to be examined 1.361 trillion, of which
are Personnel Expenditures 761 billion
free for detailed examination by
Congress 600 billion
WHO HAS THE REAL POWER OF
THE PURSE?
For the next four months, Congress will work on
the budget and approve it by December.

If the Evardone bill will be passed the President
can declare savings by January or any other time
of the year.

Even now, the DBM has written to Malacanang
changing the definition of savings and
proposing a bill for approval by Congress.

WHO HAS THE POWER OF THE
COIN PURSE?
Congressmen and Senators are anxious to
ensure their re-election. They are now
under pressure to approve either of the
proposed bills.

Will they regain their lost Power of the
Purse?