Cabinet OK’s P3.767-trillion 2018 budget
PRESIDENT Rodrigo R. Duterte and his Cabinet approved last Monday the proposed P3.767-trillion 2018 national budget for submission to Congress in time for his second State of the Nation Address (SONA) on July 24.
“Proposed 2018 budget was approved as presented,” Budget Secretary Benjamin E. Diokno said in a text message yesterday, a day after the whole Cabinet convened in Malacañan Palace.
“The plan is to submit the President’s… Budget of Expenditures and Sources of Financing (BESF) on the day of the SONA.”
About 12.4% more than the P3.35-trillion budget for 2017, the new spending plan to be proposed for next year “will continue to support the administration’s ‘ build, build, build’ program and investment in human capital.”
Economic managers last month lowered their 2018 national budget proposal to P3.767 trillion from P3.84 trillion after the House of Representatives watered down in May the Department of Finance’s (DoF) first of up to five tax reform bills. That landmark measure now awaits Senate approval.
House Bill No. 5636 expects to generate P133.6 billion in revenues for 2018, 35% less than the estimated P206.8 billion from DoF’s original proposal.
In the same mobile phone message yesterday, Mr. Diokno said there will be a “strong call” for the Senate to approve the proposed tax measure after “the President certified as urgent the CTRP (comprehensive tax reform program) bill,” thus removing the requirement under legislative rules for second- and final-reading approval to be granted by each chamber of Congress on separate days.
Presidential Spokesperson Ernesto C. Abella told reporters separately in a briefing in Malacañang that the proposed 2018 national budget is equivalent to 21.6% of gross domestic product (GDP).
“It’s a budget that reforms and transforms,” Mr. Abella said.
About 29.4% of the proposed budget for next year is allocated to “personnel services,” Mr. Abella said, while “infrastructure and capital outlays” will receive 25.4%.
Government agencies that will get the biggest allocations next year, he said, are the Department of Education, Department of Public Works and Highways, Department of the Interior and Local Government, Department of Health, Department of Social Welfare and Development, Department of Agriculture, the Autonomous Region in Muslim Mindanao and Department of Environment and Natural Resources.
With the expected implementation of the first tax reform package next year, the Cabinet-level Development Budget Coordination Committee ( DBCC) has programmed 2018 revenues to hit P2.841 trillion, equivalent to 16.3% of GDP and 17% more than the P2.427trillion 2017 program that is equivalent to 15.2% of GDP.
Disbursements will increase by some 15.6% to P3.364 trillion, equivalent to 19.3% of GDP, from 2017’s P2.909-trillion program that is equivalent to 18.3%.
Of that amount, infrastructure spending is programmed to surge by 54.47% to P752.9 billion, equivalent to 4.3%, from this year’s planned P487.4 billion that is equivalent to 3.1% of GDP.
Indicative fiscal programs up to 2022 were drafted in a June 9 DBCC meeting.
While Mr. Abella did not provide proposed 2018 revenue and disbursement amounts, a check with Mr. Diokno’s office verified that “the budget from the DBCC was consistent with what was presented last night at the Palace.”
The DBCC has also capped the deficit-toGDP ratio at three percent from 2017 to 2022, in a bid to keep to disbursement targets that have so far been missed.
The Duterte administration is ramping up state spending on major infrastructure and social services in a bid to shift GDP growth to a higher plane of 7-8% from next year to 2022 — when it steps down — from a programmed 6.5-7.5% this year and from 2016’s actual 6.9%.
The past six years under former president Benigno S. C. Aquino III focused on fiscal consolidation — marked by rising state revenues on the back of improved administration and disciplined spending — which bagged for the country investment- grade scores from key global credit raters starting in 2013.