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Saturday, October 06, 2007


(Delivered by REP. EDCEL C. LAGMAN , Chairman of the Committee on Appropriations, on 03 October 2007)

Mr. Speaker and distinguished Members of this August Chamber:

We begin this morning the plenary deliberations on the General Appropriations Bill (GAB) for the annual budget of Fiscal Year 2008. What we undertake is not to observe a mere ritual, but to discharge a constitutional mandate where the Congress, more particularly the House of Representatives, exercises primacy in the allocation of our constituents' money.

At the outset, allow me to underscore and acknowledge that the GAB is now with the plenary in record time because of the utmost industry and indispensable cooperation of both the Majority and Minority members of your Committee on Appropriations. Truly, we have a responsive Majority and a responsible Minority.

Perforce, we must deliberate, not filibuster; we must en gage in spadework, not in fireworks; we must supplement, not supplant. The ennobling agenda is to imprint our collective wisdom on the budget instrument.

Incidentally, your Committee on Appropriations had broken tradition after it approved on 17 September 2007 the participation of bona fide People's Organizations (POs) and Non-Government Organizations (NGOs) in public hearings on the General Appropriations Bill. Accordingly, on 28 September 2007, the Committee heard the presentation of an "alternative budget" by Social Watch and the *Freedom from Debt Coalition *and took note of their recommendations.

The traditional practice of solely limiting budget briefings and hearings to heads and representatives of government departments and agencies is an incomplete process. Verily, the people, who are the ultimate beneficiaries of sufficient budgetary allocations, or the casualties of meager or absent allotments, should be given the opportunity to be heard through their non-elective and alternative representatives in the PO and NGO community.

Likewise, we have revived an abandoned tradition of empowering the various Vice Chairpersons of the Committee to conduct hearings at the sub-committee level. It is at this stage that the nitty-gritty of the proposed budgetary allocations comes under the Committee members' scrutiny for eventual retention, augmentation, disallowance, reduction or realignment.

Almost invariably, no national budget is adequate. In the Philippines, like in other similarly situated countries, the reality of limited resources is compounded by the numerous demands of an exploding population which is projected to escalate to 90,457,200 next year and the crippling constraints of an enormous debt service with interest payments reaching P295.751-B in Fiscal Year 2008 and principal amortization amounting to P328.341-B or a total debt service of P624.092-B, which is a little over 50% of the proposed National Expenditure Program.

A P1.227 trillion expenditure budget for 2008 appears to be huge at face value. However, stripped of the virtually mandatory personal services amounting to P384.829-B and automatic appropriations totaling P555.556-Bconsisting of (a) Internal Revenue Allotment (IRA) of P210.730-B; (b) interest payment of P295.751-B; and (c) other automatic appropriations of P49.075-B, the remaining discretionary items amounting to P286.615-B or 23.36% of the total budget is the only amount subject to the disposition of Congress. These non-mandatory and non-automatic components of the budget a! re the regular MOOE of P138.953-B and the capital outlay of P147.662-B.

Over and above this lean remnant of the appropriations measure is the constitutional injunction in Section 25 of Article VI that "The Congress may not increase the appropriations recommended by the President for the operation of the Government as specified in the budget" proposed by the President in the National Expenditure Program.

Many of our distinguished colleagues would, therefore, ask: "What are we talking about?" or "What are we poised to debate on?" or "Must we cross swords on less than a fourth of the annual budget?" or "Are we viewing a carcass?"

At first blush, these are cogent questions. However on further reflection, it is this reduced percentage of the budget pie which must lead us to transform the General Appropriations Act from a compendium of figures to a genuine document of policy declarations.

It is judicious, albeit belated, that we revisit and revise our inept and injurious policies on debt service and seek innovative means of liberating our people from the debt trap. For example, no less than our Speaker has proposed debt swap arrangements by which the country's appropriations to attain the millennium development goals (MDGs) may be picked up or used by our international creditors to offset our loan obligations.

We must also rekindle the crusade dating back to the 8th Congress to repeal the law on automatic appropriation for debt service and recapture for the legislature its undiluted constitutional supremacy over the purse.

We must trust the innate responsibility of legislators to determine what debts must be paid. We must never allow our country to agai! n suffer the inordinately expensive folly of the useless and fraudulently procured loan for the construction of the Bataan Nuclear Power Plant. For this mothballed facility, the Executive paid for more than two decades or from 1986 to this year a total of P64.794-B consisting of principal amortization of P43.560-B and interest payments of P21.234-B. All for absolutely nothing beneficial to the Filipino people.

This total amount of P64.794-B for the improvident full payment of the BNPP loan is more than the combined appropriations for the Departments of Health (P16.259-B); Agriculture (P23.756-B); and Transportation and Communication (P23.339-B) for 2008.

Lamentably, we are replicating the BNPP folly with our continued payment of a P503.65-M loan from Bank Austria which the government used to purchase substandard medical waste incinerators for the use of 26 government hospitals. Subsequently, these incinerators had been banned from operating under the Philippine Clean Air Act of 1999 even as they were found to be emitting pollutants. Yet the government continues to pay this useless and toxic loan through automatic appropriation. For 2008, government will pay P17.700-M for interest payment and P79.332-M for principal amortization.

But we do not have the money to buy or repair medical equipments for government hospitals.

Unfortunately, we cannot stop these off-budget payments without first repealing the law on automatic appropriation which was originally authorized under PD 1177 and reenacted in toto in the 1987 Revised Administrative Code, both of which were issued by one-man legislatures: by the late President Ferdinand Marcos under martial law and by former President Corazon Aquino under a revolutionary government.

However, we cannot strike down automatic appropriation through the General Appropriations Act. We will have to do this through a specific repealing statute. Nevertheless, we can express the strong sense of Congress against the payment of tainted and worthless loans through appropriate special provisions in the General Appropriations Bill.

Another categorical political statement, but this time coupled with appropriate allocations, should be on reproductive health, responsible parenthood and population development. We cannot achieve genuine and sustainable human development if we continue to default in addressing the population problem. It is beyond debate that a huge population growth rate like the Philippines' 2.34% impacts adversely on all indicators of human development such as health, education, shelter, food security, employment and the environment.

All of the most populous countries in the world rank low in the Human Development Index. Even the United States and Japan which rank 3rd and 10th respectively among the world's most heavily populated countries, do not rank among the first half dozen countries in human development.

The Philippines which is ranked 12th in population is 84th in the Human Development Index, while China and India, the 1st and 2nd most populous countries, are ranked 81st and 126th, respectively, in human development.

Curiously, the macroeconomic assumptions submitted by the Development Budget Coordinating Committee (DBCC) do not even include projections or targets on population growth. This is a grossly myopic outlook on the crucial import of population on development. This blatant failure of DBCC negates the prescription in the Medium Term Development Plan on "widening the choice and reach of family planning services and increasing the prevalence rate of men and women/couples practicing responsible parenthood using either modern, natural or artificial methods to 60% in 2010".

Moreover, this lapse overlooks six of the eight major components of the Millennium Development Goals which our country is committed to achieve. These are eradication of extreme poverty, achievement of universal primary education, promotion of gender equality, reduction of child mortality, improvement of maternal health, combating HIV-AIDS and ensuring environmental sustainability, all of which are relevant to population and reproductive health in relation to human development.

Another good reason why we have to expeditiously d! eliberate on and approve the General Appropriations Bill is to prevent the reenactment next year of the 2007 General Appropriations Act. A reenacted budget allows the Executive to derogate the ascendancy of Congress in the appropriation of public funds and negates the implementation of new and beneficial projects and programs which otherwise should have been authorized by Congress in a fresh GAA.

In fairness to the Executive, within the constraints of the state of the laws which Congress has allowed to perpetuate like automatic appropriation and Congress has enacted like the IRA without a subsequent cap on the increments being received by LGUs which are already awash with funds and resources, the Presidency has incontrovertibly prioritized education, health, infrastructure and social services in the productive portion of the proposed budget and in the operation of the government.

Finally, this General Appropriations Bill is not a perfect bill, like all legislative proposals. Thus, your Committee on Appropriations welcomes perfecting amendments to augment, for example, the allocations for education, health and agriculture, among others.

We hasten a word of caution, however: more money does not always mean more service or better performance; an augmentation may instead buy more seminars or travels, rather than additional textbooks, better health care or more rice on the table.

Your reasonable and modest amendments will make the GAB truly the collective handiwork of the House of Representatives.

Mr. Speaker and distinguished colleagues, approval of this annual appropriation measure is earnestly urged.