A June 13, 2013, press release from the Department of Budget and Management

Sec. Abad: Timely budget support for public education

In a move that coincides with the opening of classes, the Department of Budget and Management (DBM) released P4.5 billion to the Department of Education (DepEd) for the maintenance of classrooms and the construction of sanitation facilities, in line with the Aquino administration’s commitment to improve the quality of public education nationwide.

“This latest release will be used to cover the repair and rehabilitation of our classrooms, including the necessary construction of water sanitation facilities in elementary and secondary public schools all over the country. As we start the academic year this month, we are also moving closer to our goal of closing all educational resource gaps boosting our public education system in the process,” said Secretary of Budget and Management Florencio “Butch” Abad.

Abad reported that the P4.5 billion—of which P1.1 billion has been allotted to classroom maintenance and P3.4 billion to sanitation facilities—was charged against DepEd’s fund for the Requirement of Basic Education Facilities under the 2013 General Appropriations Act.

The P1.1 billion under the total release includes funding for classrooms in Region III (P122 million), Region IV-A (P117 million), and Region VI (P110 million).

The release also includes P3.4 billion for developing sanitation facilities in public schools nationwide, including those in Region III (P417 million),  Region V (P397 million), and Region VI (P304 million).

“Besides our commitment to build more classrooms and provide enough equipment and teachers in public schools, we are also making crucial investments in the health and well-being of our students. After all, better access to clean water facilities can help ensure better hygiene and disease prevention in our campuses,” he added.

Supporting the Administration’s goal of shoring up the country’s school system, the Budget department earlier approved 61,510 new teaching positions to keep pace with the increasing demand for teachers in public elementary and secondary schools nationwide.

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A June 5, 2013, press release from the Department of Budget and Management

Sec. Abad: Effective public spending to close resource gaps

The Department of Budget and Management reported that public spending on infrastructure and other capital outlays (CO) surged to P75.2 billion as of April—a P23 billion or 44.8-percent increase year-on-year—supporting the Aquino Administration’s agenda of accelerating economic development toward inclusive growth.

The increase is attributed mainly to actual disbursements of the Department of Public Works and Highways (DPWH), which spent around P40 billion for key infrastructure projects. Resource gaps for the construction of irrigation systems, classrooms and other education facilities, as well as hospitals and health centers were also addressed through significant disbursements by the Department of Agriculture (DA), Department of Education (DepEd) and Department of Health (DoH), respectively.

Similarly, spending on maintenance and other operating expenditures (MOOE) grew to P97.9 billion in the last four months, registering a P22.8 billion or 30.4-percent increase from last year’s disbursements. The government’s spending on preparatory activities for the 2013 national, local and ARMM elections—as well as increased provisions to cover the Department of Social Welfare and Development’s (DSWD) Conditional Cash Transfer Program and the National Statistics Office’s (NSO) conduct of Census of Agriculture and Fisheries—are credited for the disbursement jump.

“Through our budget reforms and, consequently, the improved quality of public spending, we were able to fill out crucial resource and supply gaps that may have affected the country’s fast-growing industries. Our disbursement performance proves that the Aquino administration is on track in fulfilling its goal of strengthening the country’s infrastructure base,” said Budget chief Florencio “Butch” Abad.

“Our public expenditure reforms have also allowed us to deliver direct, quality programs and social services to the people at a significantly faster pace—as we have seen year-on-year—targeted towards achieving rapid, sustainable and inclusive growth,” he added.

DISBURSEMENTS BY EXPENSE CLASS, AS OF APRIL 2013

• Personnel Services expanded by 11.6 percent or P18.4 billion to P177.7 billion, due largely to the salary adjustments of the last tranche of the Salary Standardization Law III, higher retirement and gratuity leave benefits, and payment for employees involved in the preparation activities for the 2013 elections.

• Operational subsidies to GOCCs dropped at P5.2 billion in the last four months; a 37.9 percent decrease year-on-year. Subsidies for the National Food Authority’s (NFA) procurement of palay and corn and the National Health Insurance Program’s (NHIP) health insurance premium for indigents will be released, pending the submission of special budget requests and documentary requirements by both agencies.
• Net lending also declined by P11.5 billion due to the P12.3 billion in repayments made by the Power Sector Assets and Liabilities Management Corporation (PSALM). This was slightly offset though by the advances provided to the Light Rail Transit Authority (LRTA) for its debt servicing requirements.

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A June 4, 2013, press release from the Department of Budget and Management

Support for Pablo-stricken areas, unprogrammed projects eyed

Secretary of Budget and Management Florencio B. Abad today lauded the 38 government-owned or -controlled corporations (GOCCs) that turned over P27.89 billion in dividends and other remittances to the national government, adding that the high turnout will help support urgent public expenditures, including those for the rehabilitation of typhoon-hit areas across the country.

Abad said that the total earnings turned over by GOCCs to President Benigno S. Aquino III—an amount significantly higher than the P10-billion target for this year—will also be used to fund more infrastructure projects and social programs under the Unprogrammed Fund of the 2013 National Budget.

“The GOCC earnings will play a large role in supporting many of our more urgent expenditure needs, including those for rehabilitating areas struck by typhoon Pablo in 2012, as well as other unprogrammed expenditures and budgetary items. Additionally, the dividends will help create broader fiscal space to accommodate our growing budget requirements, especially for priority programs that will advance the Administration’s growth agenda,” Abad said.

The top five corporations with the biggest remittances are the Philippine Amusement and Gaming Corporation (PAGCOR) with P7.2 billion, the Land Bank of the Philippines (LANDBANK) with P6.2 billion, the Development Bank of the Philippines (DBP) with P3.2 billion, the Bases Conversion Development Authority (BCDA) with P2.3 billion, and the Power Sector Assets and Liabilities Management Corporation (PSALM) with P2.0 billion.

The Budget chief also noted the impact of accountability and transparency measures on the performance of the country’s GOCCs since the passage of Republic Act 10149 or the GOCC Governance Act two years ago.

“The transparency and accountability reforms adopted by our GOCCs enabled them to become more productive and efficient, a development that can only bring us better news for the country’s economic horizon. With the fiscal gains we posted in the first half of President Aquino’s term, the Philippines is now poised to sustain its development momentum and ensure that further economic expansion in the country will benefit all Filipinos,” Abad said.

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A May 31, 2013, press release from the Department of Budget and Management

Amended rule sets P1-M cap on whistleblower reward

Secretary of Budget and Management Florencio B. Abad today said that graft charges filed against him were based on an outdated law, clarifying as well that an informer’s reward for reporting smuggled goods has been limited to either P1.0 million or ten percent of the fair market value of the confiscated items.

The Budget Secretary made the statement following reports that a Felicito M. Mejorado filed a graft complaint in the Office of the Ombudsman against Abad and Department of Finance (DOF) Secretary Cesar V. Purisima. Mejorado alleged that Abad and Purisima refused to release his reward—initially set at P272.1 million—for providing information against oil smugglers.

“Mr. Mejorado’s claims are unfortunately based on a provision that has already been amended. While we value his efforts to help the government curb corruption, we are similarly bound to existing laws and guidelines on the release of informer’s rewards. It would be quite ironic if we—in recognizing our citizens’ contributions—cannot follow the very same rules that we are held accountable to,” Abad said.

Mejorado’s claim was based on Section 3513 under Presidential Decree (PD) No. 1464 (A Decree to Consolidate and Codify All the Tariff and Customs Laws of the Philippines), which states that an informer’s reward must be equal to 20 percent of the market value of confiscated items.

This law, however, was superseded by Section 282 (B) of Republic Act No. 8424 (An Act Amending the National Internal Revenue Code, as Amended, and for Other Purposes), which authorizes only 10 percent of the fair market value of smuggled goods or P1.0 million, whichever is lower.

Abad said that when two legal provisions conflict each other, the law enacted on a later date holds sway over the earlier rule. This was also expressed in a Department of Justice (DOJ) opinion on the issue, which recommended that Mejorado’s reward be capped at P1.0 million, instead of the P272.1 million earlier requested.

The matter is already being evaluated by the DOF Committee on Rewards, which previously approved the Bureau of Customs’ endorsement of Mejorado’s request.

“In line with the Aquino administration’s thrust of reforming our public institutions, we continually enjoin the public to help us fight irregularities in government, especially in bureaucratic processes that are prone to corruption. Whistleblowers should therefore be recognized accordingly, even as we follow existing laws and guidelines on releasing informer’s rewards. We trust that this matter will be resolved in due time, and that Mr. Mejorado himself will be properly rewarded,” Abad said.

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Statement of Secretary Florencio B. Abad:
On the 7.8% Q1 GDP growth

[May 30, 2013]

Since the year began, we have been seeing an unmatched level of confidence in the Philippine economy from various sectors, as evidenced by a succession of investment grade ratings and consistently optimistic growth forecasts by local and international markets. With our GDP expanding by 7.8 percent in the first quarter, the Philippines’ economic performance continues to fly in the face of market expectations, setting as well as a new precedent for the Administration’s fiscal management strategy.

Public spending continues to drive the economy forward, with Government Final Consumption Expenditure growing by 13.2 percent. Maintenance and Operating Expenditures (MOOE) and Personnel Services (PS) spending jumped by 25.1 percent and 12.4 percent, respectively. Even as global market uncertainties persist, the country’s public spending performance continues to respond to high local demand.

“Most notable is the contribution of public construction to our growth in the first quarter, which peaked at a 45.6-percent rate for the period. This expansion was driven largely by the acceleration of infrastructure and capital outlay investments, aimed at drawing more investors into the country and supporting our bid for inclusive growth.

Private sector activities have also become a major driving force in the expansion of our GDP in the first three months of the year. Private construction rose impressively by 30.7 percent, while manufacturing activities posted a significant 9.7­-percent growth. The manufacturing industry’s performance gives us a particularly interesting story, as most of its growth was attributed to increased production by food manufacturers. This translates not just to an increasing demand for local food products; it also indicates that there is now a growing need for unskilled laborers to support the industry’s demands, which may help create thousands of job opportunities for many Filipinos.

It is clear to us that private businesses and corporations have broadened their role in boosting the country’s fiscal growth, even as the Administration continues to build on its previous economic successes. We expect our partners in the private sector to intensify their investments further in the local market and become lead players in the Aquino administration’s growth agenda.

Altogether, these developments bode extremely well for the Philippines’ growth prospects in 2013. We intend to sustain and surpass the very standards we set over the succeeding quarters, supported as we are by a fast-growing and energetic private sector, as well as rising business confidence in the Administration’s economic strategy.

We in the Department of Budget and Management congratulate President Aquino and his economic managers for actively pursuing our development goals, as well as for ensuring the sound management of our economic development. We are confident that our unremitting campaign for transparency, accountability, and good governance will indeed create an environment ripe for inclusive development, and more important, yield benefits that will redound to the Filipino people themselves. That is exactly what we are doing now.

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A May 27, 2013, press release from the Department of Budget and Management

Sec. Abad: New budget regimes enable focused, faster spending for inclusive growth

Secretary of Budget and Management Florencio B. Abad today reported that national government spending in the month of April reached P153.2 billion, a 25.3-percent increase from the P122.2-billion disbursement level in April last year. This brings the disbursement level in the first four months of 2013 to P584.0 billion, which is P66.9 billion or 12.9 percent year-on-year.

Abad also initially reports that public spending on infrastructure and other capital outlays have increased by more than 40 percent year-on-year in the last four months. Maintenance and other operating expenditures (MOOE) also grew by more than 30 percent over the same period.

“The reforms that the Aquino government embedded in the 2013 National Budget helped us ensure faster and more focused government spending. This allows us to accelerate the delivery of priority programs and projects for inclusive growth, particularly infrastructure and social services,” he said.

“The new budgeting regimes introduced so far—the one-year validity of all appropriations, the policy against lump sum funds, procurement innovations that enable the early tender of projects, and tighter focus on the administration’s priority deliverables, among others—bolster the government’s capacity to deliver the people’s development priorities,” he added.

Of the total amount spent from January to April, non-interest expenses accounted for P462.0 billion or a 14.8-percent increase year-on-year. Meanwhile, interest payments grew by a slower rate of 6.4 percent year-on-year to P122.0 billion. The Department of Budget and Management (DBM) will release within this week a more detailed assessment of government disbursements as of April.

The Government reported that it achieved a P36.8-billion budget surplus in April, a record-high for the traditionally surplus month. Better revenue collections, which reached P190.0 billion in April or 24 percent higher year-on-year, contributed to the surplus.

The cumulative deficit in the first four months of this year has reached P29.7 billion. In contrast, the deficit in the same period of last year was only P2.9 billion.

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A May 22, 2013, press release from the Department of Budget and Management

Sec. Abad: Initial allocation to support Bangsamoro cause

The Department of Budget and Management (DBM) rolled out P42 million as allocation—of which P29 million has been released as cash—to support the operational requirements of the Bangsamoro Transition Commission, in line with the Aquino administration’s goal of facilitating socio-economic reform and development in the Autonomous Region in Muslim Mindanao (ARMM) through the creation of the Bangsamoro Basic Law.

“This release is meant to cover the initial budgetary requirements of the Transition Commission, particularly for its operational needs. The Aquino administration has already mobilized the necessary talent and resources to establish the commission and ensure its success in drafting the Bangsamoro Basic Law. In the long-term the Transition Commission will play a crucial role in fostering and sustaining peaceful dialogue between the Administration and the Bangsamoro,” said Secretary of Budget and Management Florencio “Butch” Abad.

Pursuant to Executive Order No. 120, the Transition Commission was constituted to draft the proposed Bangsamoro Basic Law, with provisions consistent with the 2012 Framework Agreement on the Bangsamoro.

The P42 million will fund the Transition Commission’s requirements for Personnel Services (P17.03 million)—specifically for 16 officials appointed to the commission—and its Maintenance and Other Operating Expenditures (P25 million). The releases were funded against the Miscellaneous and Personnel Benefits Fund (MPBF) under the 2013 General Appropriations Act and the FY 2013 Contingent Fund, respectively.

The amount requested is part of the P100 million authorized by President Benigno Aquino to support the operations and personnel requirements of the commission, chargeable against the FY 2013 Contingent Fund and subject to further evaluation of the DBM.

“We are taking the necessary steps towards supporting the realization of a truly united, accountable and participative Bangsamoro, guided by our peace and development agenda for the region. We believe that the fruition of our goal to provide better public services, improved economic development, and more job opportunities for Bangsamoro constituents is already under way,” added Abad.

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A May 21, 2013, press release from the Department of Budget and Management

The Department of Budget and Management (DBM) wishes to clarify news reports about the supposed allocation of P120 billion in coconut levy funds, allegedly as “pork barrel” for Administration allies, and “left out” allegedly “opposition-led” provinces from the list of beneficiary-provinces.

First of all, we wish to clarify that no budgetary allocation or release has been made yet involving the Coconut Levy funds. Any release will be subject to an executive order on the parameters for the use of such funds, and no such fiat has been issued at the moment.

The news reports claimed that such release was based on a “13-page memorandum to agency heads” that was signed by Budget and Management Secretary Florencio B. Abad. The DBM has not issued any “13-page memorandum to agency heads” that exclusively deals with coconut levy funds.

What the DBM issued was National Budget Memorandum (NBM) No. 118, entitled “Adoption of the Budget Priorities Framework in the Preparation of the FY 2014 Agency Budget Proposals,” which is 13 pages long excluding annexes (See http://www.dbm.gov.ph/?page_id=2801). Such NBM communicates the adoption of the Budget Priorities Framework to guide all departments and agencies in focusing their budget proposals on priority programs critical to the country’s sustained economic growth next year.

Perhaps, the news reports were referring to a section of the said document on coconut industry areas as priority focus areas for program convergence. In this section, twelve (12) areas were identified by the National Statistical Coordination Board and National Anti-Poverty Commission (NAPC) as having coconut farmers with the lowest income and experiencing dire poverty. (See reference notes at the end.)

The National Budget Memorandum clearly states that “pending the approval of the implementation of the Integrated Coconut Industry and Poverty Reduction Roadmap by the President, the initial sites for the program shall therefore be one of the priority areas for program convergence… in the 2014 budget.” Thus, we would like to clarify that development interventions—including the use of coconut levy funds—will not be exclusive to these priority areas.

We want to assure the public that the Aquino Administration is committed in achieving rapid and inclusive growth, anchored by good governance in our budget management agenda, where the dividends of our sustained economic growth will translate to more significant contributions to the lives of the poor and marginalized.

Reference: section of NBM No. 118 on Focus Geographical Areas, Coconut Industry Areas:

5.1 Coconut Industry Areas

“Dire poverty occurs among coconut farmers even while there is a huge growth potential from the coconut industry with around $935 million in annual export receipts and 5.2 percent value added contribution in agriculture. Based on NAPCand DPWH data, around 28 percent of these coconut farmers have no access to a national highway, 21 percent are 5 kilometers or more away from a national highway, and 13 percent are more than 2 kilometers but less than 5 kilometers from a national highway. Some 140,134 of the coconut farmers or 44 percent have no secured tenurial status¹. Pending the approval of the implementation of the Integrated Coconut Industry and Poverty Reduction Roadmap by the President,the initial sites for the program shall therefore be one of the priority areas for program convergence (tenurial reform, agricultural productivity programs, industry development, infrastructure development, social services, and climate change adaptation and disaster risk reduction and mitigation measures) in the 2014 budget. This priority program will also maximize the impact of the Supreme Court ruling on the public nature of the Coconut Levy funds in October 2012.”

Source: NSCB, NAPC, RSBA 2012.
a/ Data for Western Samar

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A May 9, 2013 press release from the Department of Budget and Management

Sec. Abad: First-Quarter releases to bolster delivery of Public Services

The Department of Budget and Management (DBM) announced that it has already released P960.8 billion or 76.8% of the 2013 General Appropriations Act as of end-March 2013, allowing for the prompt delivery of public services and the implementation of the Aquino administration’s priority programs and projects. This is 18.7% higher than the P809.3 billion released in the same period last year.

Meanwhile, releases from the P2.006-trillion 2013 budget—including those drawn from Special Purpose Funds and Automatic Appropriations—amounted to P1.4 trillion or 69.8 percent of the total program.

“The improved pace of our releases in the first quarter affirms the Aquino Administration’s commitment to enhance our expenditure strategy, as well as facilitate the quick delivery of public services to the Filipino people. As we continue to advance fund releases to support President Aquino’s priority programs and projects, we urge our National Agencies to optimize their allocations and utilize these in a timely and efficient way,” Secretary of Budget and Management Florencio Abad said.

*Includes January to February 2013 requirements for Interest Payments as reported by the Bureau of the Treasury (BTR).

Abad also confirmed that P915.2 billion or 94.8% of the Department budgets have been rolled out to facilitate the swift implementation of key programs and projects in the first semester of the year.

Big ticket items under specific budget releases for departments and agencies include those for infrastructure projects (P1.78 billion released), the Department of Agriculture’s farm-to-market roads (P783 million), and Basic Educational Facilities (P684 million).

DBM has also released P45.7 billion or 16% of the budget allotted for Special Purpose Funds (SPFs), posting a 235.4% increase over the same period last year. The amount was released for the first quarter pension requirements on the military/uniformed personnel, Priority Development Assistance Fund (PDAF) prior to election ban and Budget Support to Government Corporations (BSGC).

Releases for Personal Services (PS) and Maintenance and Other Operating Expenses (MOOE) have reached P442.7 billion and P251.2 billion, respectively, or 99.6% and 97.4% of the full-year program. Also, releases for Capital Outlays (CO) and infrastructure reached P221.2 billion or 84.2% of the total budget allotted.

“We expect our fund releases to sustain this pace, as we continue to support programs and services that are crucial to the Administration’s development agenda. Ultimately, we want the implementation of the National Budget to fulfill its primary objective: to institute rapid, inclusive and sustainable growth in the country, where the dividends of good governance go directly to the people,” Abad added.

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A May 7, 2013, press release from the Department of Budget and Management

The Department of Budget and Management (DBM) today countered reports announcing the deadline extension for agency budget proposals for FY 2014, adding that the May 13 deadline was intended for budget proposal adjustments, including the fleshing out of lump-sum amounts in agencies’ budget submissions.

The clarification was made following news reports that the budget submission deadline had been extended from April 15 to May 13 this year. However, guidelines under National Budget Memorandum No. 118 specify that agency budget proposals should have been submitted by April 15, while the refocusing of agency’s proposed budgets and the fleshing-out of lump-sum funds may be completed by May 13.

The DBM also urged agencies to meet all their budget submission requirements in time for their scheduled Technical Budget Hearings, as well as to ensure their compliance with the budget preparation deadlines set by the budget department.

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