Aquino Bares Return To Zero-Based Budgeting In First SONA

07/26/2010

Topics: budgets and budgeting, government, politics, parliament, macro economics, economy, business and finance, national government, World

Quezon City, Metro Manila, Philippines (AHN) - Philippine President Benigno Aquino III said the country would return to zero-based budgeting instead of passing the previous year’s national budget with just minor revisions. He said in his first State of the Nation Address on Monday at the opening of the 15th Congress that beginning next year the country would shift to a zero-based approach to budgeting.


Aquino gave priority to budgeting after discovering three weeks since he assumed the presidency that the country’s budget deficit has reached $424.7 million (19.6 billion pesos) for the first half of 2010. This is the result of the government, led by his predecessor President Gloria Macapagal-Arroyo, spending $977.3 million (45.1 billion pesos), but collecting only $515.7 million (23.8 billion pesos) for the first six months of this year.

The situation left the new administration with only one percent of the $33.4 billion (1.54 trillion pesos) 2010 budget to spend every month, until December.

Aside from overspending, Aquino bared several anomalies his team discovered made by the Arroyo administration. One is spending 70 percent of the $43 million (2 billion pesos) calamity fund in Arroyo’s home province of Pampanga, the bulk of which went to one district where Arroyo successfully won as congresswoman.

Another is the excessive allowances of the Board of Trustees of the Manila Water Sewerage System, who jointly collected various allowances and incentives totaling $3.5 million (160.1 million pesos) out of the total $4.45 million (205.4 million pesos) payroll of the water agency in 2009. It meant only 25 percent went to salaries of the rank-and-file, while 75 percent went to the board’s allowance. This took place while the retirement pay of employees remains unpaid and many of Metro Manila residents suffering from water shortage.

Aquino also blamed the populist policy of the Arroyo administration for ordering the state-owned National Power Corporation to sell electricity in 2001 to 2004 at a loss, which caused the company to be mired in debt, of which $4.3 billion (200 billion pesos) was eventually absorbed by the national government. Another example is the very low fare at the Metro Rail Transit, which led to the past government ordering the state-owned Land Bank of the Philippines and the Development of the Philippines to purchase the losing MRT.

To raise funds for the empty national coffers, Aquino said the country’s revenue-raising agencies would adapt creative ways to boost income. It includes running after smugglers and tax evaders. Last week the Bureau of Internal Revenue filed tax evasion charges against a pawnshop owner who could afford to buy a $563,380 (26 million pesos) Lamborghini, but paid very little in taxes, the president disclosed.

Another creative way is the use of public-private partnerships to build vital infrastructure. Aquino cited an offer from a private group to build an expressway that would run from Manila and pass through Bulacan, Nueva Ecija, Nueva Vizcaya and Cagayan Valley, with the Philippine government not spending a single centavo.

For agriculture, he disclosed plans by private groups to fund the construction of grains terminals, refrigeration facilities, road networks and post-harvest facilities.

To create more jobs, Aquino said the Department of Trade will facilitate the registration of new businesses by bringing down to 15 minutes from four hours the time it takes to register an enterprise. Included in this program is the reduction of required documents to six from 36, and the number of pages of the application document to one from eight pages. Aquino challenged local government units to speed up their processes to entice investors and in the process create jobs.

For the education sector, Aquino said the number of basic education would rise from the current 10 years to the global standard of 12 years.

The president challenged Congress to cooperate with the new administration by passing the Procurement Law, the National Land Use bill and the Whistleblowers bill to strengthen the Witness Protection Program.

He said a government panel will start renegotiations with the Islamist separation groups after the end of the Ramadan, and challenged the Communist Party of the Philippines to offer solid suggestions instead of just criticizing the government. He expressed willingness to hold dialogues with the CPP, but stressed the process must begin with a ceasefire, “because it is difficult to hold talks while the smell of gunpowder is still in the air.”

Aquino delivered his SONA, which was interrupted several times by heavy applause, in 30 minutes. He spoke using Pilipino, the national language. He was flanked by Senate President Juan Ponce Enrile and House Speaker Sonny Belmonte.

Absent from the SONA was Arroyo, who is in Hong Kong to accompany her husband for a scheduled medical procedure in the Crown Colony. However, Arroyo’s party mates disclosed they advised the former president to stay away from the SONA because she would only be hurt by what she would hear. (Headline News)