MANILA, Philippines—President Gloria Macapagal-Arroyo plans to ask Congress to pass a P1.4 trillion budget for 2009 to boost infrastructure and limit the deficit to less than P40 billion, Palace officials said Tuesday.
The draft budget bill would set the deficit ceiling at P40 billion, or half a percentage point of the gross domestic product (GDP), compared to one percent of GDP for 2008, they said.
Spending for roads, bridges and other public works, along with the farm sector, schools, social welfare and the government’s health insurance program, “would be the major recipients,” Cabinet Secretary Silvestre Bello III told reporters.
The proposed budget would be about 15 percent higher than the P1.227-trillion budget for 2008.
“Of course we want the highest possible growth and the reason for that is simple, the faster you grow, the more jobs you create and the less poor that there should be,” said Economic Planning Secretary Ralph Recto.
“But we live in a different environment today, you have high oil prices, you have inflation up there and that will also affect our ability to raise revenues,” he added.
Bello said the budget were among the topics discussed at a closed-door Cabinet meeting Tuesday in a resort in Mabini, Batangas, where the President welcomed the new members of her official family, Recto and Bello.
Malacańang has to submit to Congress its proposed budget for next year 30 days after the President’s State of the Nation Address, which she delivered at the reopening of Congress last Monday.
In a phone patch interview, Bello said the Palace has adopted a new policy for the new budget called “performance budgeting.”
Recto explained that the idea of a performance-based budgeting policy was “those who perform well—such as departments that were able to implement projects based on the 2008 funding—will naturally get more resources and those who have the absorptive capacity to spend, chances are will get more resources as well.”
Agriculture, public works and highways, and education will be among the “major recipients” of additional budget next year in keeping with the commitments that the President set out in her SONA.
The social welfare department and PhilHealth, the state medical insurance program, will also be getting a large share of the budget.
Recto said the P1.4 trillion being quoted was not yet final because the economic managers still have to meet on the “final macro-economic assumptions.”
But he said the amount by which the 2009 budget should exceed the previous year’s should be higher than the inflation rate, “so I would suspect that the budget should increase by 11 to 15 percent for 2009.”
The President, during her SONA, robustly rebuffed calls by the political opposition to lift the 12 percent value-added tax on key items including petroleum products.
As a result of improved revenue streams, the peso has risen 21 percent against the US dollar so far this year, cushioning the effect of surging oil import costs, Recto said. Christine Avendańo and Agence France-Presse
