President Aquino approves P1.816 trillion proposed budget for 2012

A June 30, 2011 press release by the Department of Budget and Management

Abad: Budget ensures direct & substantial dividends of good governance to poor

President Benigno S. Aquino III and the Cabinet have approved last night the proposed P1.816-trillion national budget for 2012. The proposed budget is 10.4 percent higher than the current year’s budget of P1.645-trillion, fully reflecting his commitment to fulfil his Social Contract with the Filipino People.

“This is a budget that is focused on achieving results: that the dividends of good governance reach the poor in a direct, immediate and substantial way,” said Budget and Management Secretary Florencio B. Abad, as the proposed budget is focused on the five key result areas of the Social Contract: anti-corruption and good governance, poverty reduction and the empowerment of the poor, inclusive economic growth, just and lasting peace and the rule of law and integrity of the environment.

“Nasimulan na nating tahakin ang daan tungo sa paggugol na matuwid. Ngayon naman, pinag-iibayo natin ang reporma sa pamamagitan ng pagsiguro na ang benepisyo ng paggastos ng gobyerno ay diretso sa tao (We have started the journey towards prudent and effective public expenditure management. We are now escalating reform by ensuring that the benefits of public spending go directly to the people),” he said.

He said social services—mainly basic education, public health and the Pantawid Pamilyang Pilipino Program (4Ps) will get the lion’s share of the proposed budget of 31.6 percent or P573.5 billion, which is an increase of 10 percent over its current budgetary allocation of P521.4 billion.

To support rapid, inclusive and sustainable growth, the economic services sector will receive the second biggest allocation which is 24.3 percent or P442.1 billion of the budget, an increase of 22.2 percent over its P361.9-billion this year. In particular, infrastructure and other capital outlays—especially those supporting agriculture, tourism and industrial development—has been given greater emphasis with a 27.2-percent increase to P243.9 billion in 2012 from P191.7 billion.

The general public services sector will receive P322.3 billion or 17.7 percent of the 2012 proposed budget, or an annual increase of 11.9 percent; while the defense sector will receive P111.4 billion or 6.1 percent of the proposed budget, or an increase of 9.9 percent.

Meanwhile, to sustain fiscal consolidation efforts, the share of the debt burden on the national budget will decrease to 20.2 percent or P367.2 billion, from 22.6 percent or P372.1 billion of the 2011 budget. A fiscal deficit of P286 billion or 2.6 percent of gross domestic product (GDP) is targeted in 2012, lower than this year’s target of P300 billion or 3 percent of GDP.

“More importantly, we ensured that every peso counts. First, we sustained zero-based budgeting to promote efficiency and effectiveness in spending. With this, we were able to scale-up spending on programs and projects that are aligned with the Social Contract” he said.

“We escalated transparency and accountability in the budget, beyond requiring the disclosure of budget information. We fleshed-out lump-sum funds in the budget, tightened the use of savings and ensured direct budgetary release to the smallest implementing units,” he said.

Abad said the President has approved of the proposed budget, subject to some modifications and clarifications to the department budgets that he made during a Cabinet meeting yesterday.

Top Departments

Of the 10 departments with the largest budgetary allocation, the Department of Education will remain at the top with P237 billion, 14.4 percent more than its P207.3-billion budget in 2011, to support in filling critical resource gaps in classrooms, teachers and learning materials.

The Department of Social Welfare and Development will receive the largest budgetary increase among departments of 56 percent, to P53.6 billion from P34.3 billion, particularly to support 3 million households under the conditional cash transfer program from this year’s 2.3 million.

The Department of Public Works and Highways will receive the second largest budgetary allocation with P125.9 billion, an increase of 13.8 percent from this year’s P110.6 billion, to support the paving of all national primary and secondary roads and bridges within President Aquino’s term.

Meanwhile, the Department of Agriculture will receive the second largest budgetary increase of 50.4 percent, to P52.9 billion from P35.2 billion, primarily in order to restore irrigation systems for more than 54,000 hectares of agricultural lands and rehabilitate those for more than 86,000 hectares, to support the country’s rice self-sufficiency goals.

“The 2012 budget is the first budget that will be fully-prepared, legislated and executed under the Aquino administration so we want to really ensure that the Aquino brand of governance is fully reflected in the National Budget,” Abad said, noting that it will be submitted to Congress on July 26, a day after the President’s State of the Nation Address.