The Executive’s proposed 2006 budget

THE 2006 National Budget, President Gloria Macapagal-Arroyo told Congress last week as she submitted the Executive’s proposal, is all about "alleviating the pain."

Prudence, responsiveness, integrity, accountability, and balance are hopefully reflected in its numbers and figures which speak not just in terms of digits and pesos but—more—in terms of impact on the life of the Filipino people.

The proposed budget, said the Chief Executive, will reverse the deterioration of the country’s public services and propel the administration’s 10-Point Agenda expressed in the Medium-Term Development Plan for 2004-2010.

The 10-Point Agenda includes, among others, creating six million jobs in six years; decongesting the capital; providing electricity and water to all barangays; improving education; concluding the peace process; and finding a "closure to the divisiveness among the Edsa 1, 2 and 3 forces."

In her Budget Message to Congress, the President said, "We need a Budget that is both decisive and responsive to these critical times. I propose such a Budget."

Of the proposed P1.053-trillion outlay, P340 billion will go to interest payments for the country’s debts. This early, various members of Congress have noted the need to break what they call is a pattern of losing huge chunks of the country’s annual budget to debt service; Malacañang has replied, stressing that repaying the country’s debts was "the honorable thing to do."

The Department of Education (DepEd) will receive the highest allocation among all the government’s line agencies, with P119.1 billion. (The 1987 Constitution requires that education be given the "highest budgetary priority.")

The Department of Public Works and Highways (DPWH) will get P62.3 billion; Department of National Defense (DND), P51.6 billion; Department of the Interior and Local Government (DILG), P45.6 billion; and Department of Agriculture (DA), P15.6 billion.

The proposed budget was drawn up by the Executive based on certain macroeconomic assumptions such as a 7.5-percent inflation rate; a real gross domestic product growth of 6.1 percent; and higher revenue collections.

The Legislature will discuss the proposal, approve a final appropriations bill and appropriate funds for it.

By Constitutional process, the Executive submits to Congress its proposed annual budget in the form of a Budget of Expenditure and Sources of Financing (BESF), supported by details of proposed expenditures in the form of a National Expenditure Program (NEP) and the President’s Budget Message summarizing the budget policy thrusts and priorities for the year.

The proposed budget is received by the House of Representatives which assigns the initial review to its committee on appropriations.

With other House sub-committees, the appropriations committee conducts hearings on the budgets of departments and agencies and scrutinizes their respective programs and projects. The amended budget proposal is then presented to the entire chamber as the General Appropriations Bill.

While budget hearings are on-going in the House of Representatives, the Senate Finance Committee, through its different sub-committees also conducts its own review of the proposed budget and submits its amendments to the body.

The House and Senate create a Bicameral Conference Committee to reconcile differences in their respective proposals and arrive at a common version of the General Appropriations Bill.

If, by the end of a fiscal year the Legislature fails to pass the general appropriations bill for the following fiscal year, the general appropriations law for the current year is deemed reenacted and remains in force until the new bill is passed by Congress, such as what happened in the last three successive years.

While the formal budgetary process is straightforward, much of it goes through unofficial procedures, with members of the Executive and Legislature negotiating concessions from each other as proposals are trimmed from, or inserted into, what eventually becomes the appropriations law.

Read the President’s Budget Message.