Today is a historic day.
As the President of the Republic of the , I am submitting to Congress today the P1.541 trillion National Budget for 2010.
It is the final budget of my Administration. One that will oversee the fruition of what this government started eight and a half years ago – reform the economy, invest on infrastructure, put food on every table, create jobs, and make education accessible to all.
But, more than just funding the country’s requirements for next year, the 2010 National Budget looks back and beyond. It is, in fact, completing projects rather than starting new ones to firm up the gains we have studiously laid brick by brick all these years. So that the next generation can build on what this Administration is leaving as its legacy.
That makes today a historic day indeed.
Looking Back: Eight Years of Reforms
Steering the Ship of State is far from easy, especially when the seas are turbulent and the winds come and go relentlessly. But, if the captain and crew are focused on the job at hand, are clear on which direction to take and do so as one, the Ship will not flounder and will reach its destination, despite delays.
I know. In most of our programs, we are but a knot away from what used to be a distant shore.
When I took the post of Chief of State, the first on my agenda was to reform the economy. To tame the budget deficit. It was a Herculean task. Yet, it had to be done if we were to put the economy on a more sustainable path after the Asian financial crisis.
On the fiscal front, through close monitoring of government’s revenue collection, coupled with the right budget prioritization and cost-saving stance, this government was able to accomplish what it promised to do. With Congress’ support, we were able to toughen the fiscal sector to withstand economic storms, the global crisis, and, yes, even multiple destabilization plots.
A government that largely depends on loans and borrowings to finance its programs cannot attain long-term permanent growth. It must have discipline and a self-sustaining economy, one that builds on its own resources and revenues for its operations and the attainment of its developmental goals.
To manage the nation’s ballooning debt, we embarked on a fiscal consolidation journey that reduced the country’s deficit and debt accumulation to a more manageable level. In support of this strategy, we implemented structural and administrative measures to improve tax collections.
These measures include the 3Rs – Run After Tax Evaders (RATE), Run After the Smugglers (RATS), and Revenue Integrity Protection Service (RIPS) – to plug leakages in revenue collections. They make both tax collectors and tax payers honest.
The Lateral Attrition Law (RA 9335), on the other hand, puts a premium on efficiency and results in tax collection.
With the support of Congress, we were able to pass other tax measures.
The most significant of these is the Reformed Value Added Tax (RVAT). Prior to its implementation in 2005, tax effort was on a decline from 17.0 percent in 1997 to 12.4 percent in 2004. In 2006, a year after RVAT was put into operation, the tax-to-GDP ratio climbed to 14.3 percent.
At present, the tax measure continues to contribute billions of pesos to our annual revenue program. In 2008, it added P140.3 billion, or 1.9 percent of GDP, to the government’s coffers. The amount collected has been used to fund critical social services and safety nets, and strategic infrastructure projects.
The RVAT may have been a bitter pill to some but, like most bitter pills, it was a good antidote in times of need. When the country was hit by the global food and oil price crisis in 2008, some P16.0 billion windfall revenues collected from RVAT were used to ease its impact, specially on the poorest and most vulnerable sectors of our society.
Another tax measure we implemented with Congressional blessing was the Indexation of Excise Tax on Tobacco and Liquor (Republic Act 9334). Signed in 2004, this law aimed to enhance the responsiveness of our tax system to the economy by making the periodic updating of specific tax rates on alcohol and tobacco to inflation automatic. Some P7.6 billion was collected from this measure in 2008.
Side by side with revving up of our revenue efforts, we imposed strategic budgeting to ensure that the government “lives within its means” and that it puts the budget where it will yield the greatest impact and benefit the greatest number.
We overhauled the way we prepared the budget to determine the uncommitted fiscal space and debated on how best to use it to address our most pressing and long-term needs. The Medium-Term Expenditure Framework was adopted to systematically map out the funding requirements of ongoing and alternative new projects on a three-year basis.
We developed performance indicators to measure the outputs produced by each agency and their impact. The Organizational Performance Indicator Framework (OPIF) opened up the budgeting process to reorient the way public resources are allocated from input to output-based. It extends beyond units of work measurement to link the activities of the agency or department outputs to our higher development objectives to ensure that all government programs make a difference.
We reformed the way we procured civil works, goods and services to make the process more transparent, competitive, and efficient. Under my watch, the Government Procurement Reform Act (RA 9184) was passed into law in 2003 instituting a system of accountability and public monitoring of the procurement process.
In July of this year, we revised the law’s Implementing Rules and Regulations (IRR) to provide one set of rules on the procurement of domestic goods and infrastructure whether from local funds or from foreign loans, and to lessen documentary requirements needed to establish bidder eligibility. The move will ensure competition and efficiency in the use of funds as well as encourage greater participation from local contractors and suppliers.
We rationalized the mandates, structures, and organizations of a third of the agencies in the bureaucracy, including those in the corporate sector, to minimize redundancies and overlapping of functions, and waste of much-needed resources.
I sincerely appreciate the efforts of those who made these reforms possible.
Reforms on the revenue and expenditure sides have helped shape the good economic fundamentals of the country, one that helped us build a stable macroeconomic environment.
Our proof: from a budget deficit of P210.7 billion in 2002, equivalent to 5.3 percent of GDP, the deficit has been reduced to P12.4 billion in 2007 or 0.2 percent of GDP – the smallest on record since 1998. In 2008, the national debt declined to 56.9 percent of GDP and to 56.4 percent in the first quarter of 2009 from 71.9 percent seven years ago.
The debt portfolio has been restructured to lengthen the maturity profile of both domestic and foreign debt.
GDP grew from 1.8 percent in 2001 to 7.1 percent in 2007, the highest in 31 years. In the intervening years, we have managed to shift the country’s rate of economic growth to a faster tempo, underlined by a more stable set of macroeconomic fundamentals.
Under my Administration, inflation remained in single digits. From 6.8 percent in 2001, it has tapered off to 1.5 percent in June 2009. The peso-to-dollar rate has fluctuated minimally. As a result, prices were kept stable and ensured consumers’ welfare.
While the financial system of other countries suffered from the global credit crunch, ours remained liquid and strong. We have worked on improving the balance sheets of our banks since the Asian financial crisis, raising capital, and adopting conservative lending and financing.
Through the financial supervision and regulation of the Bangko Sentral ng Pilipinas (BSP), our financial system remained strong despite the crisis as indicated in the capital adequacy ratio, asset quality and profitability and liquidity ratios of our banks. All show the healthy condition of the country’s banking sector.
Our country’s Gross International Reserves increased by more than 152.2 percent from US$15.7 billion in 2001 to US$39.6 billion in June 2009. It can now finance 5.6 months worth of imports from 4.0 months’ worth in 2001. Unemployment rate dropped from 11.1 percent in 2001 to 7.5 percent in April 2009.
If not for the global economic crisis, we could have attained our goal of a balanced budget by 2010.
But, as one philosopher once said, “The greater the difficulty, the more glory in surmounting it ….”
Thanks to our economic managers, with their well-thought out fiscal strategies, our economy registered a positive growth of 3.8 percent in 2008 and 0.4 percent during the first quarter of this year amidst the crisis. With strong fundamentals, our economy showed resilience to external shocks. It fared better than many of our stronger neighbors in the region and avoided a recession.
All these we have accomplished. And we will accomplish more, with your help, in the passage of this Budget.
Looking Forward: The Role of the Budget
Our work is far from over.
We have laid the foundation for a strong economic environment not only for the next Administration but also for the next generation. The economy’s uninterrupted growth and the many fiscal and monetary reforms that have been put in place under my Administration will make sure of this.
I – will make sure of it!
In crafting the National Budget, we zeroed in on the completion of my Administration’s flagship projects. It is the best gift I can leave to our people when I step down from the Presidency in 2010.
The completion of my Administration’s priority programs and projects is high in my list of priorities. These programs and projects can only be successful, however, if they are as top priorities in yours.
Armed with the proposed P1.541 trillion National Budget, the government, I am confident, could put the finishing touches to the development tapestry we started to weave almost nine years ago. But, only with your support!
Eight percent or P115.0 billion higher than the 2009 budget of P1.426 trillion, the 2010 budget is consistent with our goal of reducing the deficit to 2.8 percent of GDP from this year’s 3.2 percent. It is anchored on the assumption that GDP will grow faster by 2.6 to 3.6 percent next year, from 0.8 to 1.8 percent this year, a conservative picture of recovery supported by more and more external analysts and by the unfolding developments.
By closing the fiscal gap, we will borrow less and will have more elbow room to fund productive endeavors such as basic services and infrastructure programs.
From 2005, we were able to reduce debt service from 31.6 percent to 20.7 percent of the budget in 2008. In 2010, we hope to keep it at 22.1 percent of total expenditures and reduce it further in the following years.
Now that the global economy is stabilizing and recovering from the crisis, there is less need for government pump priming.
Still, we will continue with our Economic Resiliency Plan (ERP), to fortify what we have recouped from external shocks. We shall maintain overall confidence in our development strategy.
Agriculture, infrastructure, education, and health will be among the top priority for budgetary spending as these sectors are in the best position to help create jobs, expand social protection, and invite investors to ensure growth for the economy.
Resources, no matter how limited, can work wonders if spent wisely.
THE 2010 BUDGET: Laying the Groundwork for the Next Generation
Since 2001, this Administration has steadfastly adhered to its commitment to reform and responsible development.
The steadfastness has paid off! The P1.541 trillion National Budget we are proposing for 2010 stands on solid ground: a strong economy and a strong fiscal position.
How will we describe the 2010 Budget?
Decisive is how I would call the 2010 Budget. It caps the promises we made more than eight years ago with finality. Together we dreamed then. And together we shall see those dreams realized now.
The 2010 budget lays the groundwork for a full-scale revving up of the economy in the coming years. Never losing focus, despite distractions and controversies, we have guarded and preserved our economic fundamentals. The never-ending boom-and-bust story that used to characterize our economy before has been finally put to rest.
Our unpopular decisions in the past, particularly on unwanted revenue measures that many thought will result to a slowdown of the economy, are keeping the country afloat. We proved our critics wrong!
These very same measures gave us the resources to stimulate the economy, strengthen governance, and build more and better infrastructure. Because we had the foresight, we now have the wherewithal to finance our dreams: 1:1 pupil and student-textbook ratios, zero housing backlog, green status, sustainable energy, among others.
To sum it up, the 2010 Budget simply wants to ensure a stronger, more stable economy for the next generation to build on.
Financing the Budget: Revenues and Borrowings
While we want to maintain the revenue effort at 15.9 percent, factors such as the uncertain external developments demand further strengthening of our revenue collection effort.
For one, contagion effects of global recession can affect OFW remittances and export receipts that can slow down domestic consumption which, combined with lower investment flows, can reduce GDP growth.
We see target revenue collections to reach P1.336 trillion next year, funding 86.7 percent of our budget proposal. This amount is P96.5 billion or 7.8 percent higher than this year’s target collection, growing only at the same rate as the economy.
We have crafted this budget with the underlying principle of ensuring sustainable revenues while attaining a higher tax effort of 14.3 percent of GDP. A fiscal consolidation strategy demands nothing less. To do that, we need to intensify tax administration measures to further increase tax compliance and enforcement.
Tax administration. We expect to collect P1.196 trillion in taxes next year. That’s roughly P113.1 billion, or 10.4 percent higher than the programmed tax collection of P1.083 trillion this year.
Of the amount, the Bureau of Internal Revenue (BIR) is tasked to collect P875.1 billion from its P798.5 billion revenue goal this year. This represents an increase of 9.6 percent.
For its part, the Bureau of Customs (BOC) must generate some P309.5 billion, or 13.3 percent higher than the revised revenue target of P273.3 billion this year.
The expected increase in the BIR’s tax take will come from the expected improvement in economic growth next year.
Increased collections of the BOC, on the other hand, will come from higher import growth of 10-14 percent from the projected 8-12 percent contraction this year as well as from the projected uptrend of oil prices.
The rest of projected tax revenues for 2010 will come from other offices and taxes such as from the motor vehicle tax (P9.5 billion); from travel taxes (P823 million) and from the Fire Code tax (P578 million).
Taxes on net income and profits will corner 43.4 percent of the total tax revenues with P519.4 billion. This is P49.0 billion, or 10.4 percent, higher than this year’s P470.3 billion.
Taxes on domestic goods and services, on the other hand, will contribute P364.8 billion, or roughly 30 percent of the total tax revenues. Of this amount, some P185.7 billion will come from value-added tax receipts.
We will be fully implementing this year four laws that entail tax relief and tax savings for our citizens.
Republic Act No. 9337 lowers corporate income tax rate from 35 percent to 30 percent; and RA 9504 provides higher personal exemption for individual taxpayers, and exemption of minimum wage earners from income tax.
RA 9505, on the other hand, provides tax incentives to investors in Personal Equity and Retirement Account (PERA).
There is also the National Tourism Policy Act of 2009 which provides tourism-related tax incentives.
The tax relief from these laws are timely and opportune, especially at this time of economic difficulty. But the estimated P50.0 to P55.0 billion we stand to lose – permanently – in tax take means that we are also losing an equivalent level of badly needed infrastructure and social services. We might even say that we have jeopardized the improvement of the life of the Filipino poor. Or, derailed the speed of our economic recovery.
Considerable thought, necessarily, must accompany revenue-eroding bills. We cannot afford to squander the relatively small tax capacity that we have.
That is why I seek, once again, the assistance of Congress in the enactment of revenue enhancement and simplification measures – the Simplified Net Income Taxation Scheme (SNITS), the Rationalization of Fiscal Incentives, and the Simplification of the Excise Taxes on Tobacco and Alcohol Products. Strong government revenues will help government achieve a respectable level of economic growth, prepare for economic upturns, and provide resources for more countryside projects.
We are improving the customer service of our revenue agencies to make the filing and payment of taxes – compliance – easier for our taxpayers. It’s about time that we see them as customers/clients we need to serve.
For this, I am congratulating the BIR for launching a campaign called “Handang Maglingkod”program. Its Partnership for a Transparent and Efficient Revenue Service (PARTNERS) is worth partnering with. It involves the private sector in government’s revenue generation improvement.
A dialogue with the BOC, called PORTAL (Ports Transparency Alliance), is its PARTNERS counterpart.
Finally, the Department of Finance (DOF) must be commended for institutionalizing the Revenue Integrity Protection Service (RIPS) which has instilled greater transparency and accountability in both the BIR and BOC. The RIPS looks into the lifestyle of Customs and Revenue officials and employees.
Privatization proceeds. Total non-tax revenues are seen to reach P139.9 billion next year, P16.6 billion lower than the P156.5 billion this year. The bulk of this amount comes from the income of the Bureau of the Treasury (BTr), with P55.1 billion. Fees and charges follow at P45.1 billion while other fees and charges remitted to BTr amount to P27.2 billion.
This year, we see P30.0 billion proceeds from privatization of government assets. Next year, these non-tax revenues will be lower. Only P12.5 billion worth of privatization proceeds are targeted then.
The decline in the privatization proceeds in 2010 is understandable. Considering that 2010 is an election year, investors would be on a “wait-and-see” mode.
Borrowing Strategy. The global turmoil has made the deficit a necessary evil.
From an original target of P40.0 billion deficit for 2009, we have increased it to P250.0 billion to counter the detrimental effects of the global recession which started in 2008.
In 2010, our fiscal strategy is to reduce the deficit to P233.4 billion, from this year’s 3.2 percent of GDP to 2.8 percent of GDP. This implies an absolute decline in the deficit level.
Over the past five years, we have made significant progress in fiscal consolidation and in strengthening debt management. Our external debt to GDP ratio was reduced to 24.1 percent in 2008 from 38.3 percent in 2003.
The maturity profile of our external debt has been lengthened. It has an appropriate mix of fixed rate and floating rate debt to minimize interest rate risk. In the domestic front, Domestic Bond Exchange, Retail Treasury Bonds, and Small Investors Program are offered to develop the local capital market.
Our country has built a good reputation when it comes to managing its debt. Its improved fiscal performance and sound macroeconomy have enhanced its credit rating.
The P233.4 billion deficit will be financed mainly from domestic sources with P203.7 billion, or 87.3 percent of the total borrowing requirement. Some P51.3 billion will come from foreign creditors to cover the budget deficit and raise the necessary cash balances in the Treasury.
Next year-end stock of National Government debt is estimated to reach P4.7 trillion or 56.9 percent of GDP, comparing favorably to the 56.3 percent realized at the end of 2008.
The Government will continue to source funds in a transparent manner consistent with its medium-term debt management objectives.
Allocating the Budget: Expenditures
How different indeed this Budget is that I am putting before you today!
In 2002, because of the rapid fall of the revenue effort and the historically large budget deficits bearing down on us, there was very little productive fiscal space that we could work with.
Interest and net lending payments were eating up 28.2 percent of each budget peso from 2002 to 2004. The debt burden had climbed from 3.3 percent of GDP in 1997 at the start of the Asian financial crisis to 5.2 percent of GDP during the 2002-2004 period. The level of productive resources was down to 13.3 percent of GDP from 2002 to 2004 from 16.1 percent of GDP in 1997.
Today, after a relatively successful run of controlling the deficit, (even surpassing our targets in the last three years) and the benign interest and foreign exchange rate environment, the projected debt burden in the 2010 budget amounts to P355.8 billion, equivalent to a smaller 4.3 percent of GDP and comprising 23.1 percent of total expenditures. This, despite the temporary resurgence of the deficit this year.
With a relatively tight budget ceiling to work on, after removing the debt burden component, we set out to restructure the budget, to maximize its economic impact.
Next to fiscal consolidation, we embarked on a journey to raise the level of capital investments.
By object of expenditures. Total capital outlays for 2010 amounts to P235.8 billion, 2.8 percent of GDP, and accounts for 15.3 percent of the budget. Infrastructure will get P161.3 billion, or 68.5 percent, which will fund the remaining ongoing priority projects comprising of roads, bridges, irrigation systems, and the like that will not reach completion by the end of this year.
Hence, for the last three years of my Administration, capital outlays funded in the budget will reach 3.2 percent of GDP and comprise 17.5 percent of the budget. Infrastructure and other capital outlays will account for 2.3 percent of GDP.
In 2002 to 2004, we spent 2.4 percent of GDP on CO, marking 12.8 percent of the total budget. Infrastructure spending reached 1.6 percent of GDP.
Current Operating Expenditures (COE) will get the biggest share of next year’s budget with P1.291 trillion, 15.5 percent of GDP. This represents 83.8 percent of the total budget, compared to its 86.3 percent share in 2002. Maintenance and Other Operating Expenses (MOOE) will receive P229.4 billion. This level of spending is equivalent to 2.7 percent of GDP and 14.9 percent of total expenditures which compare to 1.8 percent of GDP and 9.5 percent of budget in 2002.
The amount of P340.8 billion for interest payments represents a growth of 34.9 percent from 2009 to 2010. Personal Services (PS) will also increase by 15.2 percent due to the second tranche implementation of Joint Resolution No. 4 passed in June 2009. Personal Services is down to 5.9 percent of GDP compared to 6.8 percent of GDP in 2002.
We increased the allocation to Local Government Units (ALGU) by 7.2 percent, from P261.1 billion in 2009 to P279.9 billion in 2010. We also increased the subsidy and other support to Government-Owned-and-Controlled Corporations (GOCCs) by 5.6 percent, from P19.8 billion in 2009 to P20.9 billion in 2010, the largest assistance going to National Food Authority (NFA), with P8.0 billion;Bangko Sentral ng Pilipinas (BSP), with P4.0 billion; and National Housing Authority (NHA), with P3.5 billion.
By sectoral allocation. Consistent with the government’s thrust to achieve the Millennium Development Goals (MDGs) and alleviate poverty, the social services sector will get the biggest share of the 2010 budget with 31.1 percent or P479.9 billion. It is followed by economic services, 23.1 percent (P356.5 billion); debt service, 22.1 percent (P340.8 billion); general services, 17.9 percent (P275.2 billion); and defense, 4.8 percent (P73.6 billion).
Netting out the debt burden (net lending and interest payments), the relative share of the sectors increases. The social sector will have a 40.5 percent share of the budget versus its 31.1 percent gross share. Economic services follow with 30.1 percent; general public services, 23.2 percent; and defense, 6.1 percent. In terms of percentage of GDP (net of debt burden), social services constitute 5.7 percent of GDP, followed by economic services with 4.3 percent, and general public service with 3.3 percent.
The corresponding percentage to GDP in 2002 amounts to 5.8 percent for social services, 3.8 percent for economic services, and 3.4 percent for general public services. This indicates our relative success in restructuring the budget towards more economic services.
By department/agency. I thank Congress for passing the P11.3 billion supplemental budget for the automation of election. With this budget, we can have a clean and honest election next year. One with accurate results.
The top 10 departments in 2009 receiving the biggest allocation are the same departments occupying the top 10 list for 2010, not necessarily in the same order.
The Department of Social Welfare and Development (DSWD), for instance, advances from the 10thplace last year to 8th place in 2010, due to the increase in the budget for the Pantawid PamilyangPilipino Project from P7.9 billion in 2009 to P12.0 billion in 2010. The program targets a million chronic poor families.
Overall budget of the DSWD increases from P10.7 billion to P16.5 billion, or 54.2 percent.
The Department of Education (DepEd) remains at the top, with the highest allocation of P172.8 billion, to include its School Building Program of P2.0 billion under the Special Purpose Funds. The Department of Public Works and Highways (DPWH) comes second with P105.2 billion, and the Department of the Interior and Local Government (DILG) follows with P65.4 billion of which P1.4 billion will fund the hiring of 10,000 police officers.
While the DPWH retains the second highest share of the budget, there is a 23.5 percent reduction from its P137.5 billion budget for this year to P105.3 billion in 2010. The decrease is due to the completion of the SONA projects in 2009, particularly roads and bridges and flood control. The decline is also attributed to the transfer of all locally-funded projects previously implemented by the former Air Transportation Office to the newly created Civil Aviation Authority of the .
The Judiciary retained its level of P13.0 billion for the second year to fund its reform programs.
The Departments that received an increase in their 2010 budgets, aside from the DSWD, are the Department of Agrarian Reform (DAR), 46.4 percent higher, from P13.5 billion to P19.7 billion; and the Department of National Defense (DND), 1.7 percent, from P61.6 billion to P62.7 billion.
The 2010 ranking may be summarized thus: 1) DepEd, P172.8 billion; 2) DPWH, P105.3 billion; 3) DILG, P65.4 billion; 4) DND, P62.7 billion; 5) DA, P37.8 billion; 6) DOH, P28.5 billion; 7) DAR, P19.7 billion; DSWD, P16.5 billion; 9) The Judiciary, P13.0 billion; and 10) DFA, P12.5 billion.
Prioritizing the Budget: Programs
I cannot help but reflect on how much and how quickly the budget structure has changed since my first budget proposal in 2002.
But, definite in every budget that we have crafted is that the focus is defined. The priorities are clear.
We are focused on what matters: infrastructure, agriculture, education, health, poverty reduction, and good governance.
Next year, our priority is to continue funding ongoing programs and projects for completion. We want the impact of these programs and projects to be felt for years to come, long after we have played our swan song and taken a bow from the center stage.
Infrastructure. My Administration has remained focused all these years on strategic infrastructure development. The goal? To link the country’s urban and rural economies and spur growth.
Strategic infrastructure matters because it supports productivity and economic competitiveness.
Believing this, we embarked on massive investments in infrastructure from 2001 to 2009. These infrastructure projects – in transport, energy, agriculture, and social sectors – were implemented and, I am proud to say, completed during the period.
We completed the construction of 47,409 kms of major roads and 246,588 linear meters of bridge projects costing P226.2 billion. These include the world-class 93.77-km Subic-Clark-Tarlac Expressway, completed in 2008. As I said in my SONA, the SCTex creates wealth as the flagship of the Subic-Clark Corridor.
We constructed and/or improved 373 municipal ports, through the Department of Transportation and Communication (DOTC), and completed 47 fishery infrastructure projects (including the expansion of General Santos Fish Port Complex, improvement of eight regional fish ports, and construction of 39 municipal ports) through the Philippine Fisheries Development Authority (PFDA), from 2001 to June 2009, with a total cost of P520 million.
Also under transport services, we extended subsidized fares and discounts to 1.1 billion passengers as recorded by the Light Rail Transit Authority (LRTA) and Metro Rail Transit Authority (MRTA) from 2001 to the present.
In 2006, we introduced the Super Regions strategy to optimize the use of limited resources. A total of 149 SONA-priority infrastructure projects were committed by my Administration to the five Super Regions. To date, 39 projects are completed; 67 are ongoing, and 43 are undergoing project design and civil works.
Complementing these 149 priority infrastructure projects are five vital infrastructure programs that we are fast-tracking: farm-to-market roads, national and communal irrigation systems, electrification of barangays, upgrading of 35 hospitals, and low-cost housing for families affected by the Northrail-Southrail projects. They support the Administration’s objective of providing vital infrastructure that will stimulate agricultural growth and facilitate the delivery of basic services to raise the quality of life of our citizenry.
Of these 5 priority programs, we aim for a hundred percent completion of at least 2 by the end of this year. These are the provision of low-cost housing to affected families and electrification of 41,980 barangays nationwide.
We intend to complete by 2010 all on-going projects and commitments that we have set out to do more than eight years ago.
We will achieve this by infusing some P134.0 billion for infrastructure. Of this amount, P104.6 billion, or about 78.0 percent, will be spent for locally-funded projects.
Serving as arteries for goods transportation and people movement, roads and bridges corner a big share of the infrastructure budget with P73.5 billion, or 54.8 percent of the total P134.0 billion.
Locally-funded projects under this program include the decongestion of traffic in Metro Manila and other areas (P8.8 billion); completion of nautical highways (P5.8 billion); construction of roads to support peace and development in Mindanao and other conflict-affected areas (P3.0 billion); and the construction, completion, and continuation of on-going bridges (P2.8 billion).
Flood hazard mitigation facilities, on the other hand, have been provided some P7.4 billion to reduce flood risks to tens of thousands of our people, and to prevent loss of billions of pesos in economic infrastructure and major transportation corridors.
The level of air navigation facilities, an important indicator in the improvement of aircraft operational safety, must be given funding attention for the service to keep pace with the changing dimensions of the aircraft industry and the increasing volume of air traffic.
For this purpose, we have set aside some P3.3 billion to underscore the economic contributions of our airports and navigational facilities. Major allocations will go to the P1.7-billion Laguindingan Airport Development Project and the P1.6-billion New Communications and Navigation Surveillance/Air Traffic Management Systems Development Project.
Land transport, on the other hand, will be given a boost with some P6.5 billion. This amount funds the Light Rail Transit Line 1 South Extension Project, P748 million; Metro Rail Transit 3 Operation and Maintenance (EDSA LRT III), P645 million; and Subsidy for Mass Transport (MRT 3), P5.1 billion.
As more and more priority projects are completed, the economic gains from infrastructure development continue to bring hope to more and more communities in the country’s cluster of super regions.
Agriculture. Agriculture is the heart of the rural economy. It is the nation’s lifeblood.
Like the human heart that beats life into the bloodstream, the agriculture sector provides the nation with the basic necessities of food and raw materials to keep it alive.
The sector also provides employment to one-fifth of the country’s population.
Through our programs on land development and provision of credit to farmer-beneficiaries, the agriculture sector was able to generate a total of 2.2 million jobs from 2005 to the first quarter of 2009, just 0.6 million short of our 2010 target.
A force that drives the economy, the agriculture sector can put in an annual 19 percent to the country’s GDP despite the onslaught of the sector’s adversaries – typhoons, drought, pests and diseases, and high cost of fertilizers.
The overall annual productivity of the sector increased at an average of 3.8 percent, from P198.6 billion in 2001 to P258.0 billion in 2008.
Without a doubt, this sector can do a lot for the country, not only for the hands that till the soil but also for those who are dependent on it, directly or indirectly, for sustenance and livelihood.
Indeed, agriculture is also our weapon against poverty and hunger.
The Ginintuang Masaganang Ani (GMA) Rice Program and Hybrid Commercialization Program that we “sowed” from 2002 to 2005 have yielded positive results.
Rice production has been growing steadily at an average rate of 3.8 percent since 2002 until 2008. Five years back, it reached an all-time high of 7.4 percent.
Our concerted efforts on food production to achieve long term food sufficiency that will put food on the table was intensified, particularly during the food crisis last year. We launched in April 2008, during the National Food Summit, the P43.7 billion F.I.E.L.D.S. Program, a six-assistance package involving the provision of major interventions: Fertilizers, Irrigation and other infrastructure facilities,Extension and education, Loans for inputs, Dryers and other post harvest facilities, and Seed subsidy on quality genetic materials.
The F.I.E.L.D.S. Program, implemented by the Agriculture Department to support the government’s Rice Self Sufficiency Plan (RSSP), intends to develop farmers’ capabilities in raising their income from rice farming through increased yields.
Since its inception, the Program has served 1.8 million farmers who benefited from 3.6 million fertilizer discount coupons worth P250/coupon or a total of P890 million fertilizer subsidy covering 1.8 million hectares of rice lands at one-hectare-per-farmer basis. An additional 334,904 farmers and 123,000 farmer-fisherfolks, on the other hand, have availed of loans provided through Land Bank and the Agro-Industry Modernization Credit and Financing Program, respectively.
Irrigation and other infrastructure, like farm-to-market roads and related infrastructure investments, are specifically set for targeted input production areas. A total of 136,477 hectares of new areas have been irrigated, and 1.3 million hectares restored and rehabilitated with a total fund of P67.0 billion.
To date, a total of 696,967 farmers and agricultural extension workers have been trained through 15,222 various agricultural training programs while 37.8 million farmers and fisherfolk-borrowers benefited from a P322.8 billion agricultural loan and credit assistance released nationwide.
Our assistance to farmers and fisherfolks does not end at the initial stage of farming, Come harvest time, dryers, postharvest processing and trading centers, and cold storage facilities for fishery products, as well as bagsakan centers are necessary provisions to lessen yield losses.
A total of 10,846 postharvest equipment have been distributed nationwide while 19,489 units of postharvest facilities have been constructed and rehabilitated. Some 715 flatbed dryers benefited 47,905 farmer-households involving 71,500 hectares.
To reduce cost of farm inputs, we have subsidized certified and hybrid rice seeds. We have distributed 20 million pieces of various crops and fruit tree seedlings and planting materials; 30,000 head of various livestock and poultry animals; and 161 million pieces of fingerlings and broodstock.
Still, despite these gains, we should not be complacent. We should be up and ready when another crisis strikes.
And, we will be!
I am confident that this sector can – and will – lead us to food security and food self-sufficiency.
Investments have already been made. We only have to infuse a little more to put the agriculture sector on the fast lane to bring us closer to attaining a hundred percent food self-sufficiency level by 2013.
This year, given the good performance of the sector, we expect to achieve a 92 percent sufficiency level.
For 2010, we will apportion 5.5 percent, or P84.6 billion of the National Budget, to this sector. Some P37.8 billion will go to the Department of Agriculture (DA), to include the modernization of agriculture under the Agriculture and Fisheries Modernization Act (AFMA).
Of the total budget allocated to DA, some P8.7 billion will go to the GMA Banner Programs, distributed as follows: GMA Rice, P3.1 billion; GMA Corn, P658 million; GMA High Value Commercial Crops (HVCC), P1.8 billion; GMA Livestock, P476 million; and GMA Fisheries, P2.7 billion.
The amount set aside for the GMA Rice Program will be used to distribute 60.8 million kilos of seeds to 860,000 farmer-beneficiaries, and train 373,290 farmers and extension workers.
A portion of the funds provided for the GMA Corn and Livestock will be tapped to dispense 3,220 kilos of corn seeds and 26,416 heads of various livestock to 603 and 1,242 beneficiaries, respectively.
We will also distribute 10.6 million pieces of planting materials and 44,156 kilos of vegetable seeds to some 421,165 qualified beneficiaries.
Aside from crops and livestock, fish production shall be promoted through fish breeding to augment the daily dietary protein requirement of the population and address overfishing and destructive fishing.
Fisheries, an important economic sector component, provides substantial employment and income to many Filipinos. In 2008, the fisheries subsector posted the biggest production gain with 5.8 percent output or 4.96 million metric tons as compared to other agriculture subsectors which grew by only 1.1 percent (livestock), and 4.1 percent (crops).
Given its significance in securing food production, allocation for the GMA Fisheries will grow by 43 percent from the 2009 level of P1.9 billion. Under this program, more than 1.8 million fish seed produced will be distributed to 21,875 qualified beneficiaries.
We will be providing P140 million for the establishment and maintenance of 261 mariculture parks. In addition to the existing 41 mariculture parks established since 2001, we have put up 15 new parks in 2008 to allow fishermen to breed high value marine species in submersible cages.
Apart from providing inputs to food production, we have also established logistics and food delivery systems and facilities to link farm producers with consumers. Some 308 Barangay BagsakanCenters/Food Terminals and 52 Bagsakan Centers (drop-off points) were put up since 2007 until June 2009. In 2010, we are allotting P500 million for the implementation of market-oriented programs including Barangay Food Terminals/Bagsakan Centers.
Also in 2010, we will spend P13.1 billion for the various irrigation programs and projects of the National Irrigation Administration (NIA). Some 237,908 households are expected to directly benefit from the construction, rehabilitation, and restoration of irrigation systems. Target service areas to be rehabilitated and restored are 91,300 hectares and 138,429 hectares, respectively.
To complement this agriculture infrastructure, we will also repair and rehabilitate 4,190 kilometers of farm-to-market roads in various areas of the country. Some P9.1 billion has been set aside for this purpose.
Equally significant as our physical investments in agriculture is the empowerment of the Filipino farmers to liberate them from the claws of poverty.
When I signed the law extending the Comprehensive Agrarian Reform Program (CARP) in August this year, I did not only continue the reform that my father, the late President Diosdado Macapagal, started; I also fulfilled a promise.
I made sure that my father’s legacy remains intact. By extending the CARP until June 2014, we will provide the means to equitably distribute land as well as make it more productive.
To make this a reality, we have set aside, in the 2010 budget, a larger Department of Agrarian Reform (DAR) allocation of P19.7 billion, including the Agrarian Reform Fund, to provide for land acquisition and distribution as well as agrarian justice delivery under the CARP.
I hope that, when my term ends in 2010, the seeds sowed in years past will thrive to sustain not only the immediate needs of today’s generation but also that of the next and future generations.
Education. Our country is beset by ever-present problems on the reach and quality of education in the country, particularly in the public school system. When I assumed the Presidency, I made a crusade of addressing these challenges through the institution of reforms in the education sector.
In 2001, we redesigned the school curriculum to focus on five specific key learning areas – Filipino, English, Science, Math, and Makabayan. To prepare our youth to be the next generation of knowledge workers, we upgraded Math and Science teaching in basic education: extending its time, expanding the facilities, and improving teaching skills.
We improved the English competency of teachers through intensive training programs so that English is taught as a second language starting Grade I and as the medium of instruction in English, Mathematics, and Science from Grade III.
In 2004, we created the Ladderized Education Program to establish equivalency and access for easier transition and progression between technical-vocational education and training (TVET) and higher education. To date, eight pilot disciplines, such as Information Technology, Hotel and Restaurant Management/Tourism, Engineering, Health, Education, Maritime, Agriculture, and Criminology, with 1,225 TVET Qualification Systems, are already embedded in the curricula of 671 higher education institutions.
In 2009, we launched the Philippine Main Education Highway to make the education sector more globally competitive. This is the blueprint for putting the country on a faster road to a robust, knowledge-based economy. It envisions every Filipino child to be assured of the opportunity to get a high quality education that leads “to becoming a whole person … and a productive and responsible citizen.”
This we hope to do by incorporating two elements – tighter linkage of tertiary education with industry, and provision of lifelong learning mechanisms and interventions.
With education as one of the pillars of my Administration, we have continuously striven to accord it the biggest budget among the sectors. The total budget of the education sector for 2010 is P235.2 billion, 87.6 percent more than the corresponding sectoral allocation of P125.4 billion in 2002. The budget of the education sector comprises the bulk (49.0 percent) of the P479.9 billion budget for the social services sector and represents 15.0 percent of the total National Government Budget.
We have actively provided financial subsidies and scholarships to poor but deserving students. The total amount we have allotted for the Government Assistance to Students and Teachers in Private Education (GASTPE) Program has reached P19.2 billion since 2001, when I assumed the Presidency, to SY 2009-2010, enabling a total of 1.3 million beneficiaries to leave overcrowded public schools for private high schools.
For SY 2010-2011, we have allotted P3.9 billion for 703,318 slots to comprise 54.0 percent of total enrolment in private secondary education.
We have provided technical vocational training scholarships and other educational assistance from 2001 to 2009 through the different programs of TESDA. From the 13,800 scholars under the Private Education Students Financial Assistance (PESFA) in 2006, the number of slots has increased to 31,868 or 131.0 percent in 2010 with a budget of P200 million.
We have increased the number of beneficiaries enrolled under the Pangulong Gloria Scholarship (PGS) Program for SY 2009-2010 to 246,359 scholars. Consequently, we have raised its budget to P5.6 billion this year. As of June 2009, the number of TESDA’s graduates from its various programs has totaled 9,907,944.
In higher education, some 724,143 beneficiaries have benefited from scholarships and financial assistance amounting to P9.6 billion from SY 2001-2002 to SY 2009-2010. These include 473,060 beneficiaries of CHED’s regular Student Financial Assistance Program (STUFAP), with a budget of P4.7 billion, and 87,562 college and post-graduate students with scholarship grants from the DOST-Science Technology Resource Development Program (STRDP).
Other PGMA Scholarship Programs have benefited 163,521 students since 2004 to 2009 with a total of P1.8 billion in financial benefits. The One-Town, One-Scholar Program, which we launched early this year, has benefited 1,500 beneficiaries with a budget of P46 million.
The other scholarship programs which we continue to provide are SAFE for SR (Student Assistance Financial Education for Strong Republic) with 43,344 beneficiaries; PGMA-HELP (Higher Education Loan Program) with 15,867 beneficiaries; E-FAST (Emergency Financial Assistance for Education) with 30,850 beneficiaries; and the New SAFE in 2008 which has benefited 71,890 students with a total budget of P1 million in scholarships and loans.
We have supported an educational assistance program for secondary, tertiary, and vocational education for student-members of cultural communities. In 2009, with a budget of P167 million, some 19,289 beneficiaries have been benefited, with 5,789 more than the 13,500 students served in 2008.
I consider teachers as the most important educational resource in the country. To raise the quality of teaching, we have increased the annual budget for teachers’ training to enhance their competencies and skills systematically through various training and development activities in the areas of English, Science, Math and other Core Areas.
The training of 276,534 teachers and school heads, especially those who are non-majors in English, Science and Math; 121,317 supervisors; mobile teachers of the Alternative Learning System (ALS), and other non-teaching staff is allotted a budget of P1.0 billion in 2010.
The shortage of teachers causes a Pupil-Teacher Ratio of 1:50 (with severe teacher shortage) and 1:45-49 (with moderate teacher shortage). This results to teaching overload, or more than the 6-hour day of actual classroom teaching. To achieve a Pupil-Teacher ratio of 1:45, we have created 15,448 teaching and non-teaching positions with a budget of P3.5 billion for FYs 2008-2009, wherein 13,068 are teacher positions, For 2010, we will create 14,729 teaching and non-teaching positions with a budget of P2.1 billion, wherein 10,372 are teaching positions.
Good education, in addition to good teachers, is the key to a better life. We have improved thus our school facilities and materials. Since 2001, we have constructed 7,230 public and private schools nationwide, reducing the number of barangays without access to elementary education from 1,617 in 2001 to 227 in 2008, and the number of municipalities without access to high school education from 43 in 2001 to 1 in 2008!
We have constructed 95,337 new classrooms, including science and internet laboratories and library hubs, from 2001 to 2009. Of the 10,533 classrooms targeted for completion in 2009, we have already built 7,054 units as of June 30, 2009. For 2010, we have allotted P127 million for the construction, repair and renovation of buildings for the Library Hub Program and education learning centers, including the operations and maintenance of library hubs.
From 2005 to 2009, we repaired 29,620 classrooms to maintain a 1:45 classroom-to-student ratio, single shift. Schools with three shifts were reduced from 338 in 2002 to 38 in 2008.
In 2010, we have allotted P6.4 billion for the School Building Program. Of this amount, some P1.6 billion has been earmarked to build 2,462 classrooms for elementary and secondary schools in areas experiencing severe classroom shortage, and P2.3 billion for the construction, repair, and rehabilitation of 3,756 classrooms; 2,755 water sanitation facilities; and science and internet laboratories.
With support from private and non-government partners, we have acquired computer laboratories for 4,019 public high schools as of April this year. More than half of this number are already connected to the internet. By the end of the year, we hope to provide all 6,650 public high schools nationwide with computers and internet connectivity. In 2010, we will make available the amount of P1.1 billion for the purchase of computer sets for 577 secondary schools and for the internet connectivity of 9,048 elementary and secondary schools.
We have scaled up the School–Based Management System to empower all schools, their communities and their stakeholders, to take a more active hand in improving the learning of students in all public schools nationwide. This will be attained through School Improvement Plans (SIPs) for which we have made available P500 million to reward 10,000 schools with well-prepared, feasible SIPs.
With reforms in textbook procurement, the government was able to procure more than 135.6 million textbooks for public school students, making possible a 1:1 book-to-student ratio as a norm across all public schools in 18 different subjects. For 2010, we have earmarked the amount of P2.1 billion for the purchase of 39.6 million more textbooks and instructional materials for Filipino and Makabayan in the elementary and secondary levels.
To realize our vision of making 5-year old children ready for formal schooling by 2015, and to improve access to and effectiveness of pre-school services, we allotted P1.8 billion for the Pre-School Education Program to benefit 1,271,536 of these children in 2010. There is also the Education-For-All Program to provide education to more than 2.2 million special children who need schooling.
All in all, we will be able to provide free education to 13,607,517 of our children at the elementary level and 5,754,477 at the secondary level, a total of 19,361,994 children for 2010.
There has been a marked improvement in the major basic education indicators from SY 2005–2006 to SY 2007-2008. Greater effort, however, has to be exerted to achieve 2010 targets of 96 percent net enrolment rate, 80 percent cohort survival rate, and a minimal 3 percent dropout rate (from the 7.4 percent in 2005) for elementary schools.
At the secondary level, the targets for the same period are 85 percent, 93 percent, and 2 percent for net enrolment rate, cohort survival rate, and dropout rate, respectively. The dropout rates for a three-year period, from 2005 to 2007, were 12.5 percent (2005), 8.6 percent (2006) and 7.5 percent (2007).
Reforms outlined in the Basic Education Sector Reform Agenda (BESRA) are, therefore, crucial; their implementation requires strong commitment from the succeeding Administration, particularly that of the DepEd leadership.
Health. As the great Chinese Philosopher Lao Tzu once said, “Health is the greatest possession.”
During my Administration, the budget for health saw a steady increase. From P12.9 billion in 2001, it rose to P38.4 billion in 2009. In 2010, it will stay at that level – the largest public investment in health in the nation’s history.
While it cannot buy health, money, if used wisely, can help cure, control, and prevent diseases through provision of health insurance for the poor, affordable and quality medicines, and adequate medical facilities/health centers, and health and sanitation services.
Before I step down in 2010, I will see to it that more Filipinos will benefit from the health services the government is providing.
In my 2001 SONA, I vowed to enroll 500,000 indigent beneficiaries within a year. Three years later, in 2003, 54 percent of Filipinos have been enrolled in PhilHealth. In May 2009, some 79.6 million Filipinos, or 86.0 percent of the 92 million population, have already been enrolled. Of those enrolled, 18.3 million are indigents.
Next year, I hope to maintain the PhilHealth coverage for indigent families to give them access to quality health care through social health insurance.
True to my word, I have brought down the prices of medicine by half.
Republic Act No. 9502, otherwise known as the Universally Accessible and Cheaper Quality Medicines Act of 2008, which I signed on June 6, 2008, allows government to intervene in certain aspects of the pharmaceutical market, such as cost of medicines, so that more and more people will have greater access to low-cost quality drugs.
The law has brought the country closer to my 2001 SONA pledge of “universal access to essential medicines at half price ….”
This year, we moved a step further by placing a maximum retail price on drugs/medicines for diseases that account for the leading causes of morbidity and mortality among Filipinos. This we have done through Executive Order No. 821, which I signed in July 2009, in an unfailing conviction “that health is a basic human right.”
Now, we can truly celebrate freedom from high cost of medicines.
To ensure that affordable medicines are available nationwide, particularly in poorest areas, we have established the Botika ng Barangay and Botika ng Bayan (BnBs). Launched in 2001, BnBs in the barangay level have grown from the original 580 to 13,498 in 2009. At the municipal level, some 1,971 BnBs are operational where low-priced medicines are available to the public, particularly the poor.
Next year, using some P93 million, we will add 3,724 more BnB outlets so that poor Filipino families can avail of cheap drugs. Health will be their wealth.
We have likewise upgraded hospitals and health facilities and services. Since 2001, a total of 69 hospitals has been repaired and upgraded amounting to P1.6 billion. As of April 2009, a number of barangay health stations (118), rural health stations (36), and level 1 hospitals (170) have also been upgraded.
In support of the Millennium Development Goal (MDG) to reduce child mortality, we have allotted some P961 million for the Expanded Program on Immunization which will benefit 2.538 million eligible children age 0-11 months. This MDG calls for a reduction of under-five mortality rate by two-thirds, or 67 percent, between 1990 and 2015.
With the various health programs we are providing to reduce child mortality, incidence of death among children below five years old is on a decline. It dropped from 80 deaths per 1,000 live births in 1990, to 54 in 1993, to 48 in 1998, to 40 in 2003, to 33.5 per 1,000 in 2008.
Based on preliminary results of the 2008 National Demographic and Health Survey, infant mortality rate in the country also declined, from 35 infant deaths per 1,000 live births in 1993-1997 to 25 deaths per 1,000 live births in 2003-2007.
In support of the other MDGs on health – improving maternal health and combating HIV/AIDs, malaria, and other diseases – we have included in the FY 2010 budget of the Health Department some P1.4 billion to finance government’s family health and family planning program. The amount covers upgrading of health facilities and procurement of needed medical equipment for Basic Emergency Obstetric and Neo-Natal Care activities.
Some P123 million is also set aside for the implementation of the Doctors to the Barrios and Rural Health Practice Program, including the provision of contractual midwife services.
Of the P28.5 billion budget provided for the Health Department in 2010, some P1.2 billion will be spent for the control of tuberculosis, a major cause of illness and death in the country. Given the funds we are infusing to fight this disease, mortality rate due to TB has decreased from 38.7 deaths per 100,000 population in 1999 to 33 in 2003.
Next year, we will use P595 million to help eliminate diseases considered as public health threat such as malaria, leprosy, and schistosomiasis.
Indeed, the Administration’s belief that health is wealth cannot be put at risk.
Housing. When I assumed the Presidency in 2001, I made housing my centerpiece program to improve the living conditions of our people and to provide affordable housing to the bottom percent of households who have least access to formal housing assistance.
Since 2001, nearly a million families have benefited from the shelter and secure tenure programs of the government. It is an unprecedented accomplishment I might say.
Strongly committed to the Millennium Development Goal of improving the lives of slum dwellers by 2015, we addressed the shelter needs of low-income families. We reduced the number of families with substandard dwellings and with no access to safe water and basic services through a two-pronged strategy.
One, providing security of tenure to informal settlers, slum dwellers, or residents of blighted areas through the Community Mortgage Program (CMP) which provides financing to enable them to acquire ownership of the private land they occupy.
From 2001 to July 2009, a total 104,614 families have been assisted to acquire lots through 907 CMP projects at a cost of P5 million for 2009. For 2010, we have allotted P500 million as subsidy to the CMP.
Two, creating the Social Housing Finance Corporation (SHFC) to take care of the needs of the bottom 30 percent of the population.
To decongest Metro Manila, we relocated informal settlers-families affected by priority rail and road projects. A total of 78,474 families representing 80 percent of censused families have been relocated from 2001 to July 2009. The program, covering both the Northrail and Northrail-Southrail Linkage Resettlement Projects, is the biggest and most successful resettlement program undertaken by the government. It aims at providing some100,000 families secure housing tenure and healthful living conditions while clearing the way for rehabilitation of the country’s main railways.
A total of 27 resettlement sites have been developed in Metro Manila, Bulacan, Pampanga, Cavite, and Laguna to provide 76,840 housing units for families opting to be relocated to government-provided relocation sites. For families affected by the NLEX-C5 Road Project, some 2,334 housing units have been made available.
From 2001 to 2009, housing and shelter programs of the National Housing Authority (NHA) have benefited 273,859 poor families. In 2010, the bulk of the P3.5 billion allotment of the NHA, amounting to P3.1 billion, will be used to subsidize the Resettlement Program.
To enable low-income earners to acquire their own homes, we have been conducting Housing Fairs annually since 2006. Some 40,000 foreclosed/acquired properties are offered every year by shelter agencies at a very low cost. Since it started, House Fairs have disposed of 16,485 acquired units for government and private employees at a cost of P4.9 billion.
We liberalized the housing loan program of the Pag-IBIG Fund by increasing the loanable amount, lowering interest rates, and extending repayment periods. While the Fund is not directly from the National Budget, it has nevertheless provided some P139.5 billion from its corporate funds to finance 312,100 lots and housing units from 2001 to May 2009.
In 2008, a total P34.0 billion, the Fund’s biggest since its creation, was granted to 62,507 families, exceeding the P25.0 billion target allocation and 45,455 target beneficiaries for the year.
During the three-year period, from 2006 to 2008, home lending to individual members increased annually at an average of 45 percent, the highest growth ever.
For 2009, the Pag-IBIG Fund allocated P85.0 billion as the housing sector’s contribution to the economic stimulus package to enable the government to address the effects of the economic crisis. In June this year, I signed the Home Development Mutual Fund Law of 2009, otherwise known as Pag-IBIG (Pagtutulungan sa kinabukasan: Ikaw, Bangko, Industriya at Gobyerno) to further boost the Fund’s housing loan program.
We engaged the support of the private sector and local government units to help us provide for the housing requirements of our people. The Housing and Land Use Regulatory Board (HLURB) established one-stop shops in all regions to meet the housing requirements of these areas. From 2001 to 2009, a total of 1,345,982 housing units covered by 16,903 licenses to sell were issued by HLURB. The HLURB also assisted 1,143 LGUs in preparing and updating their Comprehensive Land Use Plans.
We allotted the HLURB some P193 million for 2010, slightly higher than its P180 million budget for 2009. The amount will help HLURB in operationalizing policies and standards, rules and regulations on human settlements.
The Rent Control Law, which Congress passed in 2005, regulated the increase in rent to 10 percent every year. To protect some 1.6 million low-income tenants renting houses for P10,000 and below per month from the threat of exorbitant rental increases and to provide them with some safety measures to reduce their cost of living as a result of the recent global economic crisis, I signed the Rent Control Act of 2009 (RA 9653) which provides that no rent increase shall be imposed for a period of one year from the date of its effectivity, after which the allowable rent increase is pegged at not more than 7 percent per annum until December 2013.
I also signed, in 2008, Republic Act No. 9507 on Socialized and Low-Cost Housing Loan Restructuring and Condonation that will benefit 418,000 delinquent housing loan borrowers. A total of 5,328 such borrowers have already availed of the program, from March 2009 to May 2009 alone, with an estimated condoned penalties and surcharges amounting to P264 million.
The budget of P5.0 billion for the housing sector in 2010 spells our commitment to address housing problems in the country. Of this budget, the NHA gets P3.5 billion which will be used to further strengthen the sector through more reforms and revitalized programs. The Home Guaranty Corporation (HGC) gets P600 million for insurance guarantee.
With this budget, we shall continue to provide shelter security to improve the quality of life of our citizens. We shall continue building a stronger housing sector not only to meet the Millennium Development Goals but also to meet our 10-Point Agenda of creating jobs for our people.
Through housing construction and its large multiplier effect, we have created 4.9 million jobs generated through the development of lots and the construction of 653,138 housing units from 2001-2009.
This goal we shall continue to meet headlong.
Social welfare. “The welfare of the people is the ultimate law.” A philosophy that rings true to this day as when it was first uttered in the Roman senate more than 2000 years ago.
Chosen by the people to serve the nation, your government officials live to serve the interests and well-being of the Filipino people.
When the crisis on food and fuel struck countries last year, our immediate response was to cushion its blow by providing subsidies and other safety net measures to the vulnerable and poorest sectors of society.
Using the P16.0 billion windfall from the RVAT, we implemented the Pantawid Kuryente to provide families consuming less than 100 kilowatt hours of electricity a month with a one-time P500 cash subsidy. More than six million households, or 94.0 percent of the targeted 6.4 million lifeline users, have benefited from this measure.
A similar P500 one-time cash subsidy was also provided to senior citizens 70 years old and above who have no regular income and are not covered by GSIS, SSS, or any other government benefit.
This year, we are granting a P5.0-billion conditional cash assistance to our poorest households as part of the government’s Pantawid Pamilyang Pilipino Program (4Ps). From our initial target of 321,012 poor households, we expanded it to 640,000 households in December 2008 when I approved an additional P5.0 billion for the program.
As of July 2009, some 700,000 household beneficiaries have been identified from 255 municipalities and 15 cities with pockets of poverty. Of this number, some 687,509 are now receiving cash grants nationwide, conditional to certain social requirements like children’s regular attendance to school , and mothers’ regular check-up at health centers.
By November 2009, an additional 9,000 families of indigenous peoples are expected to be reached by the program.
For 2010, we are augmenting the budget for 4Ps to P12.0 billion to sustain the number of households availing of the Program. The fund, lodged under the Department of Social Welfare and Development (DSWD), aims to improve education, health, and nutrition of target beneficiaries.
To ensure that our social protection programs truly go to the poorest who need them most, the DSWD will continue implementing its National Targeting System (NTS) to identify who are truly indigent and where they are located. The NTS, an approach of conducting household survey using proxy means test in geographic areas not covered by the 4Ps, aims to establish a socio-economic database of poor households that can be used as target beneficiaries of social protection programs at the national and local levels.
We have set aside P723 million for this activity in 2010 to cover 4.1 million households in areas with 60 percent poverty incidence.
Committed to provide the poor access to affordable food (rice, noodles, meat, and vegetables), we will establish 7,713 more Tindahan Natin outlets next year to supplement the existing 14,581 such outlets established nationwide that have already served 15 million households. Some P160 million will be used for this purpose.
Not only are we going to provide our people access to cheap quality food; we will also provide food – free of charge – to school children through our Malusog na Simula, Yaman ng Bansa program.
As the future of this nation, our children need to grow healthy and strong.
To do this, we will employ P5.3 billion to fund the nutrition feeding program implemented by both the DSWD and the Department of Health. Of this amount, P1.9 billion will go to DSWD to provide 448,043 day care children a kilo of rice each for 120 days. Milk and hot meals will likewise be served to 146,811 day care children, aged 3 to 5 years old, for five days a week for a total of 200 days. Beneficiaries are school children in 4th to 6th class LGUs and those in depressed areas in the National Capital Region.
I am happy to report that the Food for School Program has yielded positive results. School attendance improved from 90 percent in 2006 to 95 percent in 2007 while levels of malnutrition among school children dropped from 21 percent to 17 percent during the same period.
Side by side with our efforts to sustain economic development, we will uphold the well-being of the less privileged. Our people deserve no less.
Environment and natural resources. One of the Millennium Development Goals is that of ensuring environmental sustainability. In support of this MDG, and to protect the environment, I have signed into law several environment-related legislations.
These laws include Ecological Solid Waste Management (RA 9003) and Wildlife Resource Conservation and Protection (RA 9147) in 2001; Protection of Plant Varieties (RA 9168) in 2002; Clean Water Act (RA 9275) in 2004; Biofuels Act (RA 9367) in 2006; and various other laws declaring selected sites as protected areas.
We implemented programs to protect the environment through reforestation; management of solid waste; air quality, and water quality management; land management; and conservation of natural resources.
From 2001 to 2008, in partnership with the private sector, we planted trees in 193,276 hectares of open and degraded areas. As a result of these reforestation efforts, our forest cover, as of 2009, has increased to 7.7 million hectares from 5.4 million hectares in 2001.
In 2009, some 54,425 hectares have been targeted for reforestation. The project has an allocation of P1.5 billion.
Trees combat global warming and also help cleanse the air. To save the country‘s forest and to help improve air quality, we launched the Green Philippines Highways in 2006. The program involved planting 845,656 seedlings of ornamental and tree species in 4,112 kilometers of the country’s major highways.
In 2007, we planted and nurtured 20 million seedlings under the Green Philippines Program, or “Trees for Life,” the reforestation component of the President’s Green Philippines Environmental Plan. A total of 27,888 hectares and 1,854 kilometers of roadside were planted with 20 million seedlings.
In my 2008 SONA, I committed P2.0 billion for reforestation to mitigate climate change. I ordered the Department of Environment and Natural Resources (DENR) in June this year to expand reforestation projects in the country. Reforestation is a key factor in combating the frequency and intensity of typhoons which cost the country P15.0 billion or 0.5 percent of its GDP every year.
We vigorously pursued solid waste management, especially in Metro Manila which generates about 6,169 tons of garbage per day, emitting an estimated 555.21 tons of methane. We allocated P2.8 billion in grants to LGUs to facilitate the shift to sanitary landfills. Some 1,489 LGUs have been assisted in closing and rehabilitating open dumpsites.
We must protect our environment as our commitment to a sustainable quality of life. We need to breathe clean air. From 2006-2008, we tested 75,403 vehicles nationwide for compliance to emission standards.
To improve the water quality of 19 priority rivers, we launched the “Sagip Ilog Program” in 2003. Thirteen of these rivers have showed improvement. Eleven of them are already within water quality standards in terms of oxygen levels.
We also restored and rehabilitated the Manila Bay area. As of July 2009, we have demolished 241 illegal structures in the Cavite side of Manila Bay; dismantled 88 illegal fish cages in Laguna Lake; cleaned the Pasig River by relocating 7,758 households, representing 78 percent of the targeted 10,000 households to be relocated to six sites.
We instituted programs for land management. We completed the Philippine Submission for an Extended Continental Shelf (ECS) on the Benham Rise Area in May 2009. This will entitle us to sovereign rights over 135,000 square kilometers of additional seabed area in the Pacific that is potentially rich in mineral resources.
We also completed the Global Positioning System (GPS) survey of the outermost points of the outermost islands of the Philippine archipelago. This became the basis for the passage of Republic Act 9522 or the 2009 Archipelagic Baseline Law of the Philippines.
To fast track the land distribution program of the government, I ordered the conduct in May 2007 of land classification surveys of 348,220 hectares of unclassified land of the public domain.
The conservation of our natural resources stands high in our environment priority list.
We strengthened the protection of ecologically fragile areas, especially watersheds and areas where biodiversity is threatened. From 2001 to June 2009, we have established 109 protected areas covering 3.5 million hectares. Of these protected areas, 29 are marine areas consisting of 1.4 million hectares, while 80 are terrestrial areas covering 2.13 million hectares. As of June 2009, ten of the 109 established protected areas have been legislated.
In 2006, I issued EO 578 establishing the National Biodiversity Policy that directed the creation of Verde Task Force to ensure the protection, conservation, and sustainable use of the biodiversity in the Verde Island Passage Marine Corridor, identified by scientists as the “Center of the Center of Marine Shorefish Diversity in the World.”
As a result of our policy initiatives on biodiversity, several protected areas have been designated as World Heritage Sites, notably the Tubbataha Reefs, and the Puerto Princesa Subterranean River in Palawan. Mt. Apo Natural Park and Mts. Iglit-Baco National Park have been designated as ASEAN Heritage Parks.
EO 533, which I issued, also in 2003, adopted the Integrated Coastal Management (ICM) as a national policy to ensure sustainable development of the country’s coastal and marine resources. Some 550 LGUs were provided technical assistance in the preparation of their Coastal Municipal Environment Profiles and Coastal Resource Management Plans as well as in the establishment of marine sanctuaries.
One of the grave issues confronting the world today is climate change. To lessen its impact on our country, I designated the DENR in 2004 as the national authority for Clean Development Mechanism (CDM). To date, the country has 20 projects registered with the United Nations CDM Executive Board in Bonn, Germany consisting of renewable energy projects (wind power, hydropower, and geothermal energy) and energy efficiency projects (methane recovery for electricity generation, and wastes to power generation).
The Philippines is one of the top eight countries that have the most number of CDM projects for reduction of greenhouse gas emission.
I think it is also good to mention that we have included climate change in the science curriculum at the elementary and high school levels starting in June 2009.
To prepare our people for disasters, we will continue to sustain the implementation of the Four Point Plan of Action on Disaster Preparedness. As of June 2009, we have accomplished the following:
Of 1,630 municipalities, some 1,348 (or 82 percent) have flood and rain-induced landslide hazard maps completed under the DENR-MGB’s Geo-Hazards Mapping Program. The remaining 18.0 percent will be completed by the 3rd quarter of 2010.
We have also successfully established community-based early warning system (CBEWS) for flood in eight provinces (Surigao del Norte, Surigao del Sur, Aurora, Leyte, Southern Leyte, Cavite, Laguna, and Ilocos Sur) and CBEWS for tsunami in 12 pilot barangays.
Of the six priority targets of DENR, Forest Protection, with a target of 4,903,855 hectares in 2008, completed within the period, will receive an allocation of P27.6 million in 2010. Forest Boundary Delineation, on the other hand, has completed 53 percent of its total target of 76,291 kilometers. To complete the remaining balance of forest boundary delineation and land use allocation, some P239.6 million for 19,445 hectares has been allotted in 2010 for the project.
The Database Management and Information System has been allotted P507 million in 2009. This will be increased to P563 million, or by 11 percent, in 2010. The amount will fund systems development and maintenance as a prerequisite for gathering information from cadastral surveys and forest boundary delineation for database updating.
Cadastral Survey, covering 109,350 hectares, will be allotted P328 million. The survey will serve as reference for an improved land valuation and improved revenue collection, zoning and land use program, and bases for the settlement of claims and adjudication of land cases.
For the remaining months of my Presidency, I vow to attain a sustainable and more productive utilization of natural resources. For this, we have provided the environment and natural resources sector with P12.9 billion pesos in 2010, with the DENR (including its attached agencies), receiving P11.3 billion. Of this amount, P1.3 billion, a 7.2 percent-increase over its budget for 2009, is allocated to the massive Reforestation Program that will cover a total of 58,448 hectares for the rehabilitation of denuded forestlands, agro-forestry, rehabilitation and maintenance of watershed and mangrove areas.
The measures we have taken and will continue to take is our way of contributing to the protection of the earth and our place on it.
CONCLUSION: Looking Beyond
Ladies and Gentlemen of the 14th Congress of the Philippines, I offer for your consideration the FY 2010 National Budget.
I do so with faith, with confidence, and with hope.
With faith in what the Executive – we – can do when this Legislature looks on our budget proposal with favor.
With confidence in where we’re going and how we will get there.
And, yes, with much hope for the future.
The 2010 National Budget is the embodiment of all that this Administration has worked for all these years. And, as its chief proponent, I put all my faith, all my confidence, and all my hope in it.
I hope Congress does so also.
Because the proposed 2010 Budget will secure a home for the Filipino. It will help him put food on his table, provide schools for his children, and take care of his well-being.
As my father, President Diosdado Macapagal, ingrained into his children’s consciousness that “the strength of the nation lies in the well-being of the common man”, so do I pass on to our countrymen this time-honored truth that has defined our psyche as a people.
Truly, 2010 is no ordinary year. It is a time when the end becomes a beginning. The close, yes, of an Administration but the start, too, of the fruition of its labors. Not for itself but for the farmer and the fisherfolk in the rural area, the urban poor living in the slums, the ordinary Filipino aspiring to a good life.
The 2010 National Budget lays down the groundwork for these aspirations to come true. It is the culmination of the development agenda we set in motion several years past. Our legacy to the 90 or so million Filipinos of this and the next generation.
It is for this Congress to see beyond tomorrow. What we leave behind is not what is engraved in stone but “what we have woven into the lives of others”.
Maraming salamat po.