MANILA, Philippines – (UPDATE) The House of the Representatives will sit as a committee of the whole Thursday to get a briefing from the country's economic managers on the impact of the US financial crisis on the Philippine economy and to see if there will be a need to change figures in the proposed 2009 budget.

Albay Representative Edcel Lagman made the proposal in his sponsorship speech of the proposed budget, saying it was necessary to hear it straight from President Gloria Macapagal-Arroyo's managers how the US financial market fiasco will affect the country, adding that there was no crisis yet when the managers made the macroeconomic assumptions for the 2009 appropriation.

Lagman also called for a cut in debt payments and channel the funds instead to social services. He also said that agencies, which could not implement programs, should have reduced budget.

Majority Leader Neptali Gonzales made a motion on Lagman's proposal, which the body approved. They will convene from 2 to 5 p.m. for the briefing with the economic managers before proceeding with the plenary debates on the budget at 5 p.m.

Representative Junie Cua, chairman of the committee of appropriations, said they would want to know if the macroeconomic assumptions would be revised because of the US crisis.

Asked if the changes in the macroeconomic assumptions could lead to a change in the proposed P1.4-trillion budget for 2009 or to realignments, Cua said, "Not necessarily."

"I would like to believe it will not lead to that. A budget is merely
a guide for future authorized expenditures and revenues," he said in an interview.

Cua said the House was planning to have the budget bill passed in the plenary before the break on October 10.

Lagman said the briefing with the economic managers was necessary before interpellations and debates on the 2009 budget begins.

"This process assures that the General Appropriations Bill would be truly responsive to and supportive of our people's needs and interests in this critical time," he added.

Lagman continued, "We must not hesitate to cut to the bone overstated budget proposals. We must reduce allocations which are not implementable during the incoming fiscal year."

Echoing Lagman's idea, Bayan Muna partylist Representative Teodoro
Casiño said discussion on the impact of the US financial crisis could "facilitate the revision of the entire budget."

"Such deliberations should be treated as a prejudicial issue and thus a requirement before proceeding to the individual agency budget," he said in a text message.

Meanwhile, the Freedom from Debt Coalition called anew on Congress to end the automatic debt servicing, saying that "debt driven appropriations bill makes the country more vulnerable to the global financial crisis."

"It is as if we are helping the US and other rich countries in crisis bail themselves out by giving our money to them, while our country is under threat from the possibility of a global recession," the group said in a statement.

Lagman said debt payments and the ballooning population have made it more difficult for the government to respond to crisis situation.

In the proposed P1.4-trillion budget for 2009, Lagman said P768.4 billion or 54.3% represented the "non-productive" portion of the budget which would go to debt service interest payments (P302.65 billion); personal services (P429.72 billion); P12.15 billion net lending; and P23.87 billion for other mandatories.

"The real productive budget only totals to P646.59 billion or only
45.7% of the obligation budget," he said.