Duterte intends to submit 2018 budget on day of SONA

Rodrigo R. Duterte will submit to the House of Representatives the proposed national budget for next year on the day of his second State of the Nation Address (SONA) in July.

Budget Secretary Benjamin E. Diokno said the Duterte administration will submit the R3.767-trillion proposed budget to Congress on July 24, the same day when the 17th Congress second regular session begins.

“We’re on track to submit our proposed budget on July 24,” Diokno said in a chance interview at the Department of Finance headquarters yesterday. “But it is not yet presented to the President.”

In 2016, Congress waited for almost a month after President Duterte delivered his first SONA before it received the new administration’s budget proposal for 2017.

Under the Constitution, the President has 30 days after Congress convenes to submit his proposed budget.

“Last year, we had a new administration that’s why it was delayed, but this time, Secretary Diokno wants to submit the budget on the day of the SONA on July 24,” Budget Undersecretary Laura B. Pascua in a separate interview yesterday.

Pascua, however, said that President Duterte has yet to see the complete details of the proposed budget.

“Soon we will brief the President about the government’s 2018 budget. What was recently approved by the economic managers is the fiscal side of the budget,” she said.

Data from the Department of Budget and Management (DBM) showed the Duterte administration is setting aside the biggest slice of the nation’s budget in 2018 for social and economic services.

The proposed national budget for 2018 represents 21.6 percent of the gross domestic product (GDP), slightly higher than the 20.1 percent share this year.

The budget is anchored on government’s assumption the first comprehensive tax reform package will be passed into law before year’s end.

The biggest share of the pie, equivalent to 41.2 percent or R1.551 trillion, goes to social services. Of which, education, culture and manpower development get R794 billion; social security, welfare and employment with R369.6 billion; others at R209.6 billion; and R177.6 billion for health.

Allocation to social services increased by 14.8 percent from this year’s R1.351 trillion and is equivalent to 8.9 percent of GDP.

At least 29.4 percent or R1.106 trillion of the pie, meanwhile, is allocated to economic services, such as infrastructure spending on power, water, transportation and communications (R734.5 billion), others (R238.4 billion) as well as agriculture and agrarian reform (R133.2 billion).

Budget for economic services is seen to breach the R1 trillion mark, growing by 20 percent from the R922.9 billion approved funding in 2017 and represents 6.3 percent of the country’s economic output.

Funding earmarked for general public services such as general administration, public order and safety, among others remained unchanged at R575 billion, cornering 15.3 percent of the nation’s budget and equivalent to 3.3 percent of GDP.

Likewise, at least 9.4 percent or R353.4 billion of the budget goes to debt servicing and interest payment, an increase of 5.5 percent from R334.9 billion. In terms of GDP, this sector represents 2.0 percent, slimmer than 2.1 percent target in 2017.

Allocation to defense, on the other hand, gets 4.4 percent of the pie or R164.2 billion, an increase of 10.4 percent from the R148.7 billion budget in 2017 and equivalent to 0.9 percent of the nation’s economy.

Finally, net lending is securing the remaining R16.8 billion, untouched compared with this year’s allocation, but will represent 0.1 percent of GDP.

Earlier, economic managers of the Duterte administration lowered their proposed national budget for next year following the approval of a watered-down tax reform package one by the House of Representatives.

The inter-agency Development Budget Coordination Committee (DBCC), which sets the country’s macroeconomic goals and assumptions, earlier planned to submit a budget plan of R3.840 trillion for 2018.