Budget Priorities of the Duterte Administration by Secretary Benjamin E. Diokno

Posted on June 6, 2016

(Financial Executives of the Philippines

Good afternoon!

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 will make 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

For too long, public infrastructure has been neglected. As a result, the Philippine economy is deficient 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.

SOCIAL SERVICES

The Duterte administration will also prioritize education in its budget. For the 2017 proposed budget, we are proposing P118B for the construction of school buildings, which is 44% higher compared to its FY 2016 budget. The budget of the Department of Education will be more than half a trillion pesos.

We will also revisit the conditional cash transfer (CCT) program, more popularly known as the Pantawid Pamilyang Pilipino Program, with the intention of minimizing the leakages (giving benefits to those undeserving and not giving benefits to the deserving) and minimizing 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.

We will adopt economic measures so that a bigger part of the budget will be used for projects that will truly benefit the Filipino people.

For the youth, we are committed to develop them into a productive and healthy work force.

FISCAL REFORMS

First of all, I will put a lot of 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. The latest DBM data showed that while infrastructure spending jumped 52.8 percent to P104.8 billion in the first quarter of 2016, the government continued to underspend. 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.

Second, today, the DBM is giving 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.

I 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.

It is our goal to make the budget and the financial transactions of the Government truly open. Some features of Freedom of Information (FOI) Act, which will initially be issued in an Executive Order, will be incorporated in the proposed Budget Reform Act. We should disabuse our mind thinking that openness is simply uploading in the web tons of information on the budget. Real transparency is when citizens could request relevant data from DBM and the latter is obligated to provide them.

In sum, budgets for 2017, and every year until 2022, will support the president’s promise to improve the country’s poor public infrastructure; invest in human resources and develop the people, especially our youths, into a strong, competent and agile work force; modernize agriculture and transform rural communities; and develop lagging regions.

We have a lot of work ahead of us. We hope that you will become our partners in making true our promise of genuine change.

Thank you!