Budget Priorities of the PRRD Administration by DBM Secretary Benjamin E. Diokno

For FY 2017, the Duterte administration will propose to Congress P3.35 trillion budget. This is higher by 11.6 percent than the current year’s budget of P3.0 trillion. As a percentage of GDP, the 2017 budget represents 20.4 percent compared this year’s 20.1 percent of GDP. Despite the limited time to craft the budget, I made sure that the 2017 budget is Duterte’s budget.

Since the new administration is all about getting the work done in the soonest possible time, let me go straight to our budget priorities:

INFRASTRUCTURE

Our first priority is public infrastructure – not only because it will result in the creation of more decent jobs, but also because it will propel the economy on a higher growth trajectory.

For too long, public infrastructure has been neglected. As a result, the Philippine economy is lacking in all types of infrastructure—roads and bridges, ports and airports, railways and urban transit systems, irrigation systems and water systems. To address this, we will hike infrastructure spending from a low 5% to a high of 7% of GDP.

Next year, we plan to spend close to P900 billion for public infrastructure. Specific infrastructure projects to be pursued by the Duterte government include small, medium and large-scale projects that will be done in all regions— both highly developed and lagging—simultaneously, not sequentially.

The next six years will be The Golden Age of Philippine construction, both public and private. I estimate that from 2017 to 2022, public infrastructure spending would total P7 trillion pesos.

SOCIAL SERVICES

Our next priority is social services. This is to guarantee that our young would not just be a potential, but real, productive, competent and agile work force.

The Duterte administration will prioritize education in its budget. With P700 billion or 20.9 percent of the total budget, we can expect the construction of nearly 37,500 classrooms for K to 10 and Senior High School, hire 53,831 additional teachers, support 293,333 TESDA enrolees, and increase the budget of State Universities and Colleges (SUCs) from P49.7 billion in 2016 to P58.8 billion next year.

We will also revisit the conditional cash transfer (CCT) program, more popularly known as the Pantawid Pamilyang Pilipino Program. The goal of the review is two-fold: first, to minimize the leakages –
that is, giving benefits to the undeserving and not giving benefits to the deserving, and second, minimize the program’s administrative costs.

At the same time, we will increase the government subsidy for health insurance premium payments for indigent families amounting to approximately P50B or a 15% increase over the 2016 budget.

FISCAL REFORMS

We will strive to improve the way we allocate and use public funds.

First of all, I am putting a lot of time and effort in budget preparation. I know that underspending is largely due to poor budget preparation. The harsh truth is that it is not possible to implement well a poorly prepared budget. Many programs and projects which are not yet ready for implementation are included in the annual budget. Sadly, department heads ask for a budget that they are unable to implement: they bite more than what they can chew. We will try to avoid this practice.

Second, the DBM has given an executive briefing on the budget process for secretaries and undersecretaries in charge of finance. This is so because underspending could also be due to the inexperience and ineptness of some department chiefs.

Third, will make sure that the national budget is strictly compliant with the Supreme Court decisions on the Disbursement Acceleration Program (DAP) and the Priority Development Assistance Fund (PDAF).

Our goal is to have a Budget Reform Act that will address the abuses of the two previous Presidents in the exercise of the power to prepare and implement the government’s budget. Our goal is to restore the checks and balances of the three branches of government.

One of the objectives of the Budget Reform Law is to make the budget and the financial transactions of the Government truly open. Some features of Freedom of Information (FOI) Act, which has been be issued in an Executive Order, will be incorporated in the proposed Budget Reform Act.

We should disabuse our mind thinking that openness is achieved by simply uploading in the web tons of information on the budget. That’s false transapency. Real transparency is when citizens could request relevant data from any government agency and the latter is obligated to provide them.

In sum, Mr. Duterte’s 2017 budget, and his future budgets, will support his promise to improve the country’s poor public infrastructure; invest in human resources and develop the people, especially our5
youths, into a productive, competent and agile work force; modernize agriculture and transform rural communities; and develop lagging regions.

I have given you a broad outline of what we propose to do in the next six years. As you can see, there’s an enormous task ahead of us in order to make real change in the life of an ordinary Filipino.

We hope that you will become our partners in making true our promise of genuine change.

Thank you!