Press Release
November 23, 2015

2016 General Appropriations Bill
Senate President Pro-Tempore Ralph G. Recto
23 November 2015

Mr. President:

Budget comes from the old French word bougette, which means "bag" or "purse." In the olden days, a person's entire wealth could fit in a bougette, and so did the entire budget of a government office.

During the birth of our Republic, Heneral Luna was said to have lugged through battles a satchel containing all the monies his fledging army had.

Today, it takes a battalion of men just to pore over payroll sheets of the armed forces.

But whatever the era, whoever was in power, making the nation's purse provide for the nation's needs has been one constant in our history.

Through the years, getting money out of the purse has not been the main challenge. Putting money into it, is.

This budget is no different. The finished product, the GAA, is a thick catalogue of projects. What will appear there are the dizzying columns of expenditures, but none of the revenues that will fund them - not even as a footnote, nor as a footprint.

Perhaps, we should begin viewing the budget from the prism of taxes, so we may be able to appreciate the sacrifices made by taxpayers, and embrace the need to properly spend them.

For example, this budget will be funded by P395 billion in domestic consumption tax.

Individual income taxpayers will contribute P439.3 billion. Companies and enterprises will add P736.6 billion.

On excise tax alone, smokers will cough up P94.4 billion; drinkers, more so the alcohol-proof ones, P64 billion; and those who gas up, whether riding in tandem or in style, P12.9 billion.

If you will be buying a shoebox condo next year, you'll be among those who will raise the P10 billion property tax collection goal and the P105 billion target for Documentary Stamp Taxes.

In short, it is the people who will pay for this budget. Not government, not Congress, not Malacañang.

It is their tax payments which provide the scaffolding for schools to rise and for the economy to grow.

Government's role is just to collect them, but that onto itself is a hard job, but less on the collector than on the payor.

Next year, taxpayers will remit P2.025 trillion to the BIR, while Customs will try to collect P498.7 billion, which it can only do by thinking outside the balikbayan box.

In the division of labor in appropriating money though, while it is the Budget people who get the credit, it is the BIR and the BOC that must raise the cash.

Every government since Aguinaldo's also has to contend with people filching the purse's contents. Locks have been as easily picked as they have been installed.

Even if the budget has been designed to be a see-through bougette, transparency has yet to fully deter those who pilfer from it.

While it is good to install checks in our expenditure system, it should not be so numerous that they choke spending.

Or in a scale that transparency costs would be higher than the irregularities they seek to prevent which is akin to placing a 1-million-peso lock on a drawer that contains P1,000.

If private groups are complaining about too many rules, and being tied down by red tape, then the relief they seek must be applied on our spending regimen as well, but in a way that will shorten and simplify the process, without leaving the government shortchanged.

One example is the complicated and circuitous way that a disaster-hit town can apply for Calamity Funds.

A relaxation of rules is in order. Yes, rules must be followed in buying fire extinguishers, to use an analogy, but one must not haggle down the price of a water hose when the neighbor's house is already on fire.

Another is the slow pace that our classrooms are being built, and teachers are being hired. They provide a snapshot of our underspending. In five years, we spent P416.2 billion below program.

Unobligated balances from 2011 to 2014 of P850 billion painted a more dire picture.

But to its credit, the DBM, like a coxswain, has been using the bullhorn to ask agencies to implement projects fast.

It is my opinion that their exhortations must be incorporated in the provisions of this budget as an institutionalized antidote to the poor absorption of funds.

This we owe taxpayers. Because if the budget returns to them in kind the taxes they had paid in cash, then the budget must be spent the way they had paid their taxes - promptly.

We cannot hector them into paying taxes on time while putting projects that their taxes are funding on hold.

There's no other way to do this because reporting a surplus created out of strangling infrastructure work can never be deemed a fiscal virtue.

Another constant in our nation's history is that the bougette has been growing bigger. In fact, bougette in turn comes from the Latin word, bulga, from which the word bulge is derived.

The budget has been bulging since.

Diosdado Macapagal's last budget, for 1965, was P2.09 billion. Four years later, Ferdinand Marcos's last budget of his first term, the one for 1969, was P3.013 billion.

This means BongBong's dad's 1969 budget was bigger than GMA's dad's 1965 budget by 44 percent.

Ferdinand Marcos' last full year budget was for 1985. That year, the national budget was P74.1 billion.

By 1992, Corazon Aquino's last year in office, the national budget had grown to P262 billion.

This means that the last budget of PNoy's mom was 253 percent bigger than the last budget of BongBong's dad.

By the time Fidel Ramos bowed out in 1998, he left behind his final national budget of P537.4 billion.

This means, FVR's goodbye GAA was 105 percent bigger than the one Cory signed six years earlier.

Joseph Estrada stayed in office less than three years. His last full year budget was for 2000, worth P682.4 billion.

Despite JV's dad's abbreviated term, his 2000 budget was still 27 percent bigger than the one FVR signed into law two years before.

Gloria Arroyo was in power for nine years. Her last budget, for 2010, was a re-enactment of the previous year's, which was for P1.473 trillion.

This means GMA's last budget was 115 percent bigger than JV's dad's last budget.

For 2016, PNoy's last hurrah budget of P3.001 trillion, if approved, will be 103 percent bigger than GMA's last.

These data point to one thing--that budgets follow a natural upward trajectory. So there's nothing historic to brag about if the newest budget is bigger than the last one the previous Malacañang occupant left behind before he turned off the lights in his office the last time.

The game changer is not in the quantity but in the quality of spending, which recent budgets, including this one, possess.

There are reasons why bougettes go bulga, or budgets bulge. Revenues grow, so does population. And the latter creates needs.

For example, if our population grows by two million a year, then we must hire, ideally, 4,000 new policemen. This is but one of the many population- triggered expenditures.

Hiring a policeman requires money, meaning taxes, and the gross salary of one cop, which under the SSL 4 will go up to P371,460 annually, is equivalent to excise taxes paid by 20,773 motorbikes gassing up full tank.

Or if we produce 40 more babies every 10 minutes, then in six years, we have to ready a one million peso classroom, plus a 360 thousand-peso-a-year teacher just for the 40 kids. By any means, a delayed post-partum headache for any government.

Or if a town hires a nurse and decides to pay her salary out of taxes on beer, then they will have to drink 30,660 bottles to raise the amount.

And those are just for one cop, one classroom of students, and one nurse alone. And yearly, we need thousands of them.

But through the ages, the greatest challenge of all, for which no government was exempt to confront, was to pull out as many programs from the bag, leading one official to once compare the art of budgeting to that famous miracle of feeding a multitude out of a few loaves of bread.

The needs have always been many and the resources not enough.

Stretching the budget peso requires proper allocation which simply means spending the right amount for the right project by the right agency at the right time.

If these are not enough to satiate the clamor for more funds, then many governments had resorted to the old trick of magnifying the budget's magnitude.

For example, a one million peso allocation for a road may sport multiple labels and is accounted for many times.

If it's a product of community consultation, it is booked under grassroots budgeting.

If the same road leads to a tourist area, it is reckoned as a road to tourism. If it is in a conflict area, it resurrects in the roads to promote peace section.

If it traverses a rice field, technically it can wear another hat, that of an agriculture infrastructure. If it is lodged in DILG, it can be counted as a local government fund. Finally, it is counted as an infrastructure spending.

But at the end of the day, it is still a P1 million road, albeit one which had undergone many apparitions.

But I would like to defend this practice. It is not multiple labelling intended to inflate the budget's contents. Rather, it is a sound way of capturing a project's multi-dimensional impact.

Why? Because budgeting is not only about the bottomline. The process is also important. More so if it involves people at the bottom, which, until a couple of years ago, was never done.

Mr. President:

The budget before us today is a budget of entitlements. It is a budget of increases. It is a budget of investments for the future.

For fiscal conservatives, entitlement connotes something pejorative. It has been maligned as doles which it is not because, first, there are conditions attached; second, some recipients have made investments which entitle them to dividends; third, many are merit-based.

To those who don't believe in entitlements, let me ask you these: Are the poor not entitled to help, the sick not entitled to hospitalization, the students to education, the old to care, and the veterans to the gratitude of the nation?

These are the entitlements defined in the Philippine setting. And our society's compassion is measured by these.

In this budget, entitlements, which empower a person and not emasculate his potential, are too many to count.

We will place 1.468 million 60 year olds and above under the indigent seniors program, or half-a-million more than the 939,609 enrolled this year.

We will provide health insurance to 15.4 million poor families and 2.8 million senior citizens at a cost of P43.8 billion.

We will sustain support to 4.620 million families whom the 4Ps program is helping so they can emancipate themselves from poverty.

We will feed 3.310 million children in day care centers and public schools. There will be more than a hundred million meals served to them.

We will set aside P61.7 billion as pension for those who have served the flag and those left behind by heroes who had given their last full measure of devotion to our country.

We will fund the schooling of millions, at a cost of billions. From 794 would-be PhDs in science courses, to 2,407 Masteral in science scholars, to 16,577 undergraduates in science degrees, to tens of thousands of scholars in SUCs, to the 1.8 million high school students under the GASTPE program, to 231,895 tech-voc trainees, even medical doctors.

This is a budget of increases.

The Department of Health's budget will increase from P87.8 billion this year to P124.2 billion next year, an impressive 41 percent booster shot never before seen in history.

The allocation for the Health Facilities Enhancement Program will jump from P13.1 billion to P27 billion. The 11,240 projects it seeks to fund takes up 104 pages of small print in the budget bill.

The capital outlays budget will increase from P595.8 billion this year to P766. 5 billion next year.

Because this will fund the purchase of seedlings, laptops, police cars, and military hardware, it will, however, be inaccurate, not to mention supremely creative, to equate all of this with infrastructure.

But even if you jettison the riders in the infra count, the remaining amount is still impressive.

This budget also provides for an increase in the salary of government workers. The first year price tag of SSL 4 is P57.9 billion. After "4 gives", the full one-year cost is P225.8 billion, but I suspect not the final one.

First, does the P225.8 billion bill include pay of teachers, policemen and other personnel to be hired over the four year installment period?

Second, does it factor in government counterpart to payroll taxes, such as GSIS and PagIBIG contributions, which as an employer it is bound to pay?

Third, what is the net cost to the government after income taxes had recouped a big chunk of the raise?

Make no mistake about it, our civil servants deserve a raise, and this government praise for proposing it.

But like previous legislation which had gone through this chamber before, the SSL-4 proposal can stand improvements, such as:

First, is it possible to trim the proposed pay increase for those in the top-tier?

Second, can this be enacted together with the proposal to, at most, adjust tax rates, or at least index them to inflation?

I don't believe that a public sector pay raise and an income tax cut mutually cancel each other. On contrary, the first reinforces the need for the last.

If we don't adjust taxes, then the taxpayers who will fund the raise might accuse us of bartering tax cuts for many for a pay raise of a few.

The imperative for new tax rates can be illustrated by this: On GSIS contribution alone, an SG-21, Step 1 holder who will gross P693,660 per annum five years from now will have to fork over P62,429 a year to the state pension fund.

This is on top of deductions accruing from his migration to the top tax bracket, making him a member of the elite 32 Percent Club, if present tax rates remain.

This is a budget that invests in the future.

To train our young so they can conquer the future and compete with the rest of the world, we will be spending P61.8 billion to build 43,000 classrooms next year.

We will create 62,320 new teaching posts, buy 103.2 million textbooks, and equip 4,553 new vocational laboratories.

To improve our defense posture, we will spend P25 billion to modernize our Armed Forces.

On food security, we will spend P22.2 billion to bring water to new farmlands, P12.9 billion for new farm roads, and P756 million for fish ports.

On the threats from climate change front, P128.6 billion, by DBM's count, will be spent to repair damages from past weather disturbances and to brace for future ones.

But when we say investments for the future, it does not cover spending alone, it also includes budgetary provisions which do not sport peso signs.

I am referring to general and special provisions in this budget which encapsulate hard-won reforms in public expenditure management like innovations in transparency, and the consultative way the budget is put together.

If the budget were a painting, it could very well be in the Letras Y Figuras style in vogue during the Spanish era. What I am saying is that the letras, or the provisions in the budget, are as important as the figuras therein.

Mr. President:

The mantra of inclusivity should apply to the crafting of budget as well. Such openness is not just a cornerstone of laws of budgeting, but a hallmark of reform.

It is in this spirit that I have proposed amendments - detailed, explained, itemized - to the General Appropriations Bill as approved by the House.

After all, we will be remiss in our duties if, in our review of the budget, we discover oversight but did not correct it, paralyzed as we are by the cynicism that it will be quashed by a veto we cannot override.

To their credit, the executive branch concurred with almost all of our amendments to the past two GAAs, which validates the value of legislative inputs.

I will elaborate on my amendments when it is my turn to defend the budgets of agencies under my subcommittee.

But let me give you a preview of their nature. They are about expanding the coverage of the senior pension, funding the unfinished work in Yolanda areas and in Zamboanga, financing Lando reconstruction, improving facilities in our science high schools, to cite a few.

And for as long as the motto in our seal remains "Legis Servitae Pax Fiat" or "Law Serves Peace, Let It Be Done" and has not been changed to "Approbare Legis Cum Non Postulantes" or "To Approve Laws Without Asking," I think we should uphold the Senate tradition of improving the pieces of legislation sent to it, the most important of which is the national budget.

I close, Mr. President, by extending my thanks and congratulations to the men and women of the DBM who assembled this one-foot thick stack of budget documents, which will never fit into a bougette, and to the other economic managers, in what I would describe as their curtain call in this chamber as far as the national budget of this administration is concerned.

Because there are second and third acts in Philippine politics, some of them may be sitting where they are now, same time next year.

Maraming salamat at mabuhay po kayo !

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