Press Release
November 10, 2020

2021 Budget: Daily revenue of P7.44 B dwarfed by P12.35 B daily expenses

Breaking down next year's P4.506 trillion national budget on a daily basis reveals "the gravity and the gaps" which the pandemic has wrought upon government spending, Senate President Pro Tempore Ralph Recto said.

"We are budgeting P4.506 trillion next year, of which only P2.717 trillion can be supported by revenues. This means the deficit of P1.749 trillion will have to be bridged by borrowings," he said.

"Daily, this is how our budget meter ticks: P12.35 billion in expenses. But we can only raise P7.44 billion in taxes and other revenues. This leaves a daily deficit of P4.79 billion. This means we have to borrow P4.79 billion every 24 hours," Recto said.

"Kaya naman this year pa lang, because of low tax collections, our borrowings have been put on steroids, increasing the national debt from the end of 2019 level of P7.73 trillion to a forecast P10.16 trillion by year's end," Recto said.

"When people are not filling their cars with gas because they have nowhere to go and their glasses with liquor because all the bars are closed, then these are just two examples why collection is down during a pandemic--when there is high demand for government help," Recto said.

This is evident in the projected dip in sin tax collection on alcohol products, he said.

"Our alcohol-proof people, world champion drinkers in gin and brandy, have made our sin tax collections recession-proof, but not this time as the forecast alcohol tax take of P113.7 billion for 2021 is P28.4 billion lower than the 2021 projections made in 2019," he said.

Recto said one of the expenditures that leaves a large daily footprint is for personnel services or PS, in budget-speak.

For "payroll, premium contributions and pension", we will spend P3.61 billion a day. Recto said. "Next year's PS will hit P1.32 trillion. A decade ago this was just something like P460 billion."

"Population increase triggers hikes in personnel recruitment. For example, 40 kindergarten students require the hiring of one teacher. Sa pulis, ideally a two million annual increase in population should lead to the hiring of 4,000 new officers. One major factor also is the rise in the annual pension cost of retired uniformed personnel," Recto said.

He said the 2021 PS even dwarfs the DPWH daily infrastructure outlay spending of P1.83 billion.

Other members of the "billion-peso daily club" are the Internal Revenue Allotment (P1.91 billion) which are tax collection plowbacks to local governments, and interest payments on debts (P1.46 billion).

Among agencies, the Department of Education tops the "short list" of those which require more than P1 billion a day for its operations.

Its P606.47 billion proposed budget translates to a P1.66 billion daily spend, Recto said. "Yung daily payroll ng DepEd pa lang ay P1.3 billion na."

"Yung buong target collection ng Bureau of Customs na P620 billion next year, halos katumbas lang ng budget ng DepEd sa taong iyon," Recto said.

He said the combined daily payroll cost of active uniformed personnel from the DND, DILG, and DOTR is close to P1 billion.

Not included are pensions of retired "Military and Uniformed Personnel" and veterans which will reach P146.6 billion for the entire 2021, Recto explained. "Daily, this would come to almost P402 million."

But Recto said government will be borrowing not just to finance the P1.75 trillion deficit, but to hoard an extra P513 billion, which brings net financing to P2.26 trillion next year, and moving the national debt needle to P11.98 trillion by the end of 2021.

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