Press Release
Sponsorship Speech of Senator Franklin M. Drilon
FY 2007 National Budget
November 21, 2006


Mr. President, My esteemed colleagues, I have the honor and privilege to present, for the approval of this august chamber, the proposed national budget for fiscal year 2007

I stand before you today, my esteemed colleagues, humbled by the enormous task of presenting an important mechanism that will steer our economy next year; and, proud and hopeful, that we are coming up with a piece of legislative work that will make a difference in the lives of 85 million Filipinos

Let it be said that we are crafting a national budget that does not focus solely on the imperatives of economic growth, but a national budget that pursues growth with equity We are proposing a national budget which has at its core the welfare and development of every Filipino man, woman and child

Mr. President, it is tragic that based on the latest SWS survey, almost 3 million Filipino households are experiencing hunger According to a World Bank data as reported recently in the papers, 10.8 percent of the population live below the $1 ($1=P49) poverty line, and 41.2 percent of the population live below the $2 a day poverty line in 2005

What kind of future awaits millions of children who could not go to school, or were forced to stop their studies, because of dire poverty? How will this nation fare in the 21st century if millions of its citizens have no access to primary health care?

As signatory to the UN Millennium Declaration, the Philippines is committed to reduce poverty and eliminate the worst forms of human deprivation by 2015 However, NEDA's Second Philippines Progress Report covering the period 2001-2005, shows that there is low probability of meeting the targets of three Millennium Development Goal (MDG) indicators: Elementary Cohort Survival Rate, Elementary Participation Rate, and Access to Reproductive Health Services And medium probability, with respect to achieving the Nutrition and Maternal Health targets

Data also indicate the difficulty of attaining our goal of universal primary education by 2015 Indeed, as records from the Department of Education show, the cohort survival rate in 2004-2005 for elementary education stands at 63.26 percent This means that out of every 100 pupils who enter Grade 1, only 63 would reach Grade 6 It is notable that the net participation rate in public and private elementary schools, or the proportion of enrollees 7-12 years old vis--vis the total population of 7-12 years olds, has been declining over the years from 94.33 percent in 1996 to 76.06 percent in 2004 The Department of Education attributes low school participation to economic reasons One other important issue is the quality of education in our country today, which leaves much to be desired A standardized test administered to Grade 6 students, the results of which came out in May 2005, showed that only about 20% of all Grade 6 pupils had mastery of the required competency for that level The remaining 51% are nearing mastery and 29% showed no mastery at all On the whole, the results revealed a glaring, system-wide low mastery of the required basic education competencies

On the other hand, although there is a notable decline in the Maternal Mortality Rates or the deaths of women from pregnancy-related causes per 100,000 live births, it stood at 180 in 1995 Moreover, the prevalence of malnutrition in 2001 is shown by the fact that 32.9 percent of children ages 6-10 years old are underweight, and 41.1 percent are under-height

Despite the glowing economic reports regularly dished out by the Executive branch, the social statistics will readily tell us that there is no equitable distribution of economic fruits The much-touted GDP growth is meaningless because, sadly, it is a jobless growth Data from the 2006 Asian Development Bank Economic Outlook show that the Philippines registered an average unemployment rate of 11.4 percent from 2001 to 2005, the highest among the original members of the ASEAN

Mr. President, the figures do not lie

Hence, the trumpeted economic gains are hollow and empty for there is no remarkable improvement in the lives of our countrymen, as millions of them remain poor and jobless The rosy economic picture that our country's economic managers would like us to see and believe is insignificant in the life of Juan de la Cruz, who struggles everyday to look for a job and provide his family with the basic needs

Given this, the agriculture sector must be accorded the attention it deserves since, as of 2005, it employed 11.63 million Filipinos or 36 percent of the country's total employment However, data show that even if the nominal wages of agricultural workers went up, their real wages were on the decline Hence, there is a need to sustain the sector's productivity as this would correspondingly raise the income and standard of living of more than 11 million Filipinos

The President's budget message, "Focusing on the Imperatives of Growth", proposed a P1.126 trillion budget for Fiscal Year 2007 It is based, inter-alia, on a GDP growth of 5.7 6.5 percent, inflation rate of 4.3 4.8 percent, and an exchange rate of P51-53 to US$1 It consists of Programmed New Appropriations of P574.112 billion, Unprogrammed New Appropriation of P67.008 billion \ and Automatic Appropriations of P552.227 billion which increased considerably due to the inclusion of the Internal Revenue Allotment Also part of Automatic Appropriations are Interest Payments of P328.733 billion, which will decline by 3.31 percent, or P11.265 billion compared to its 2006 allocation

The total public sector infrastructure budget of P162.93 billion is 2.43 percent of GDP Despite the considerable increase, it is still way below the World Bank recommended benchmark of 5 percent of GDP for middle-income countries in East Asia

In the House-approved budget \ Total New Programmed Appropriations stands at P574.112 billion \ registering a net increase of P8.256 billion from the President's Budget

To ensure the timely approval of the national budget, Mr. President, the Senate Committee on Finance commenced in September 2006 extensive, daily hearings that sometimes stretched late into the night After subjecting the proposed budget to careful scrutiny, we came up with our proposed amendments to the House Bill

We are cutting the House-approved budget of P649,377,264,000 by P8,256,367,000, thus bringing back the total to the level of the President's Budget as follows:

New Appropriation: 641,120,897,000

Unprogrammed Appropriation: 67,008,479,000

Programmed New Appropriation: 574,112,418,000

Automatic Appropriations: 552,226,582,000

Total: 1,126,339,000,000

Mr. President, the following are some of the highlights of our amendments:

First, we propose a budget of P126.311 billion for the Department of Education, or an increase of P2.8 billion over the House-approved budget, and we propose to redirect the budget as follows:

                                           FROM      TO      INC. (In Billion Pesos)
     School Building Program             2.7        6.7      4.0
     GASTPE                                2.440     3.140   0.700
     Creation of Teaching               1.182     2.055   0.873
     & non-teaching positions

There is a need for 16,390 teachers for FY 2007 However, the President's budget provided only for the hiring of 10,000 teachers Hence, the Committee on Finance is proposing additional funds for the hiring of 6,390 more teachers to completely meet the need for more mentors

By providing P4 billion for school buildings, we are addressing squarely the classroom shortage by meeting the need for 8,362 more classrooms, with each classroom accommodating 45 pupils on a double shift basis, which were not funded under the President's budget;

Excluding the increase in the Philippine General Hospital of P200 million, we are proposing an increase of P142.570 million in the budget of the University of the Philippines, to provide the much needed support for scholarships and buildings for the College of Engineering;

Second, we are appropriating P250 Million for a school-based nutrition feeding program

Since malnutrition must be arrested by the age of 7 so as not to jeopardize the child's growth and development, several feeding programs (i.e. providing milk, eggs, coco pan de sal and vegetable-based noodles to the children in the classroom ) were introduced by the Department of Education over the years However, it was alarming to learn that these school feeding programs were replaced with the Food for School Program, which is actually a rice distribution program School children would bring home rice to their families For this purpose, NFA imported 88,880 MT of rice for the past 12 months, at a cost of nearly P1.8 Billion, distributing rice to recipient schools even during the school summer vacation from April to June this year

Hence, we now re-focus our efforts on a credible school nutrition program which will provide milk, eggs, coco pan de sal and vegetable-based noodles to the children while they are in school

Third, we propose to increase Post-Harvest Facilities from P1.197 billion to P2.694 billion, which will be distributed to different regions;

Fourth, we propose to cut the COMELEC budget from P9.718 billion to P8.968 billion, as we believe the proposed appropriations for the national, local and barangay elections are overstated;

Fifth, we propose an increase of P890.477 million for the budget of the health sector vis--vis the President's Budget, for various regional hospitals and specialty hospitals including the Philippine General Hospital;

Sixth, we transfer the "Tulay ng Pangulo Para sa Magsasaka " project amounting to P1.096 billion from the Department of Agrarian Reform-AFMA to the Department of Public Works and Highways, where projects of similar nature were previously lodged;

Seventh, we propose a budget of P61.661 billion for the Pension and Gratuity Fund, or an increase of P4.163 billion over the House-approved budget We have also provided that P150 million shall be allocated for valid claims of the PC-INP retirees, the payment of which shall be subject to the decision of the Supreme Court;

Eighth, we propose a substantial reduction of P195.6 million in Confidential and Intelligence Funds As we learned from our esteemed colleague, Sen. Juan Ponce Enrile, Confidential and Intelligence Funds should be allocated only for agencies which are considered intelligence data gatherers

Mr. President, it is not justifiable or permissible to allot confidential and intelligence funds to other agencies which only use intelligence data, but do not actually use these funds to gather such data

We have split the House-approved budget of the Judiciary amounting to P9.348 billion into two: the Judiciary Proper amounting to P8.614 billion and a Special Judiciary Fund of P733.475 million In line with the constitutional provision which restricts Congress from appropriating a budget for the Judiciary which is below the amount appropriated in the previous year, we have isolated the items in the budget of the Judiciary which are non-recurring, as in the case of capital outlays Thus, once the purpose for which the fund is allocated has been served, the same can be deleted from next year's budget without running afoul with the constitutional prohibition against reducing the judiciary's budget

Mr. President, some of the more significant Special and General Provisions include the following:

1. The provision of Special Hardship Allowance for teachers exposed to hardship or extreme difficulty in the place of work;

2. The construction of school buildings in areas experiencing acute classroom shortage, and providing P250 million for NGOs with proven track record in the construction of public school buildings;

3. A special provision on "Malusog na Simula, Yaman ng Bansa Program", which provides that the milk to be used for the school-based nutrition feeding program will be sourced from local dairy suppliers or cooperatives and that the program will not include the distribution of rice and other ingredients for pupils to take home;

4. Special Provision under the Agrarian Reform Fund, providing that the deficiency of the amount appropriated for the maturing bonds and interest on bonds of landowner compensation shall be considered automatically appropriated and included as part of the debt service program of the national government;

5. General Provision on the Right of People to Information on Matters of Public Concern

Mr. President, the proposed national budget for 2007, is not merely about figures, and definitely not just about the allocation of government money It is about decisions, directions, choices, and commitments For the national budget is not just about making promises, but on making good on those promises

Our people, Mr. President, are tired of empty rhetoric They want to see concrete actions and results They want to see a government which is sincerely and seriously seeking ways to significantly improve their lives A government that provides them with opportunities and choices

Mr. President, my esteemed colleagues, we must not disappoint them We must remain steadfast in our commitment to pursue our development goals, reduce poverty, strengthen social infrastructures, and provide our people with a safe and secure environment

Economic growth should be felt by every Filipino man and woman on the street and in the fields; and by the Filipino child as he or she faces an unknown future Economic growth is meaningless, if most Filipinos dreadfully look into a future laden with uncertainties and insecurities

Mr. President, it is not enough that we focus solely on the imperatives of growth We must pursue growth with equity

Thank you, Mr. President

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