President’s Budget Message

Pursuant to my Constitutional mandate, I hereby submit to Congress a national budget amounting to P1.415 trillion to support our priority programs and projects for the year 2009.

Just a few months ago, we ended 2007 with the strongest economic growth in a generation, with low inflation, a strong peso and millions of new jobs being created. We were all looking to a brighter, more hopeful future for our children.

Because tough choices were made, our nation was finally on the move. For the first time in a long time, we were on track to balance our budget. We had the needed revenues in the bank to invest in our people. Invest we did: in education, the environment, healthcare. In roads, bridges and basic infrastructure to improve our transportation system and ability to move people and products.

Then, almost overnight, the global economic environment turned upside down. The dramatic surge in the price of fuel and food has created a global price crisis unseen since the Great Depression and the wake of World War II.

Some blame speculators moving billions of dollars from subprime mortgages to commodities like fuel and food. Other point to the very real surge in demand as millions of Chinese and Indians move up to the middle class.

Whatever the reasons, we are on a roller coaster ride of oil price hikes, high food prices and looming economic recession in the US and other markets. Economic uncertainty has moved like a terrible tsunami around the globe, wiping away gains, erasing progress.

In the domestic front, we faced the same specter of oil price hikes, escalating commodity prices and economic downturns.

One thing is also clear in this new world in which we now live: the Philippines must – and is – taking greater control of our own destiny.

The global crisis did not catch us unprepared or without reserves. Through foresight, grit and political will, we built a shield around our country that has slowed down and somewhat softened the worst effects of the global crisis. We have the money to care for our people and pay for food when there are shortages; for fuel despite price spikes.

Neither we nor anyone else in the world expected this day to come so soon but we prepared for it.

This is a complex time that defies simple and easy solutions.

How do we solve these many complex challenges? First we must have a targeted strategy and set of actions today to ease the price challenges we are facing. Second, we must continue to invest in the future so that we can leave our fiscal house stronger. Third, we must become more self sufficient, energy independent and self reliant as a people and a nation.

Our Value Added Tax program is central to meeting all three of these challenges.

The program was designed to address several historic problems.

First, more revenues to pay down our foreign debt and shore up our fiscal independence.

Second, more investments in infrastructure and in people.

Third, enough money left over to advance our Pro-Poor Agenda.

Though unpopular with many, VAT yielded a windfall of P4.0 billion during the first four months of the year for our safety net and social protection programs. We allocated P4 billion pesos from VAT on oil – P2 billion to help pay the electric bill of four million indigents; P1 billion for college scholarships or loans for 70,000 low-income students; half a billion of loans to convert the engines of thousands of jeepneys to the less costly LPG, CNG or biofuels; and half a billion to shift to fluorescent lamps in public places.

Government will go on harnessing increased resources to help families crushed by higher costs and worsening calamities, while investing more in keeping up the shield against future crises.

To meet the challenge of today, we will feed our people now, not later, and help them get through these hard times. To meet the challenges of tomorrow, we must become more self-reliant, self-sufficient and independent, relying on ourselves more than on the world.

We must attain greater food self-sufficiency, especially for rice which is the most important staple of Filipinos. As with fiscal and food challenges, the global energy crunch demands better and more focused resource mobilization, conservation and management. We must become less dependent on foreigh fossil fuels.

We must continue to invest in our long-term priorities – infrastructure, education and health, among others – that will enhance our chances of becoming a truly modern nation.

In the area of fiscal management, government shall continue to improve revenue collections, spending these wisely and prudently, while bringing down our debt and deficit.

Balancing the budget this year would have been a nice feather in the cap for our fiscal turnaround, but given the adverse global economic environment, this is a milestone we may have to postpone. If the environment turns more benign in 2009, we can try again then. We must not abandon the fundamental principle of fiscal prudence.

International finance agrees with our progress. Credit rating agencies have kept their positive or stable outlook on the country. Our world competitiveness ranking rose five notches. We are sticking to, and widening, the fiscal reforms that have earned us their respect.

II. THE 2009 BUDGET: Surmounting the Global Crisis

The P1.415 trillion national budget that we propose holds our hopes of tiding our people over the difficulties, and emerging as a nation capable of attaining sustainable growth.

A sound budget must not only carefully weigh immediate and long-term priorities against the nation’s financial capabilities. It must also consider how each and every instrumentality of government can best contribute to the efforts to achieve our national goals.

In crafting the 2009 budget, we looked at the performance of our agencies and departments over recent years, analyzing their capabilities to use funds to deliver much-needed results. This performance-based approach is our guide to ensure the judicious allocation of our resources, ensuring that our taxpayers’ money count to the last centavo.

To complement this budget, and to manifest our serious intent to deliver performance, we shall be submitting to Congress a book containing the output targets of each government agency and department. This shall be our book of outputs, against which our agencies’ accomplishments shall be reckoned at the end of the year.

Our departments and agencies shall be held accountable for attaining the targets that we have funded and laid out in this budget. That we deliver on the goals, programs and projects contained in this budget is our government’s commitment to the Filipino people.

In keeping with our budgeting approach, funds were carefully allocated to agencies corresponding to our priorities as well as to those which have proven efficient in utilizing their funds.

In response to the global crisis, priority funding shall be given to food production, social protection and other measures to cushion the effects of global food and fuel price increases. This includes hunger mitigation, ensuring supply stability of rice and conditional cash transfer programs.

In this light, the Department of Agriculture’s budget has been increased by 61 percent, mostly for the Agriculture and Fisheries Modernization Program which supports our efforts on rice self-sufficiency.

Funds for our poverty alleviation programs have been likewise increased, with the Department of Social Welfare and Development getting an increase of 114.3 percent (P10.5 billion) from its P4.8 billion budget in 2008.

At the same time, we shall not neglect our long-term commitments. We will continue to fund our infrastructure, education and health requirements as well as programs to clean and green the environment.

The entire allocation for infrastructure outlays has been increased by 20.7 percent to P147.0 billion in 2009, distributed among the departments of Public Works and Highways, Agriculture, and Transportation and Communications, among others. The Department of Environment and Natural Resources, including its attached agencies, gets a 47 percent increase in its 2009 budget, a large part of which is to be spent on its reforestation program.

Getting a priority share of the budget for 2009 is governance – for improving the justice system, ensuring peace and order, and automating the elections.

III. BUDGET HIGHLIGHTS: Sustaining our Commitments

A. Financing the 2009 Budget

We shall deliver the commitments set forth in this budget.

To fulfill our commitments, our revenue-collection agencies shall work overtime to attain our revenue targets for the year. Tax administration policies will continually be improved to deliver higher revenues.

revenues must grow!

Higher revenues will allow us to fund our vital programs without resorting to borrowing. Stronger revenue collections will get us closer to realizing our goal of balancing our budget by 2010 without setting aside our present priorities.

Our expected revenue collections, amounting to P1.39 trillion next year, represents an 11.4 percent increase over this year’s target collection. This shall support 97.2 percent of our projected budget disbursements for the year. Borrowings from the domestic and international markets will finance only three percent of our budget.

Of the total revenues, some P1.28 trillion, or roughly 91.8 percent, will come from taxes on net income and profits (P567.8 billion); property (P1.4 billion); domestic goods and services (P408.8 billion); and international trade and transactions (P300.9 billion).

With tax revenue as a percentage of the national budget steadily increasing since my assumption to office, from 69.8 percent in 2001, 80.7 percent in 2007, 91.6 percent in 2008, and 90.4 percent in 2009, we are slowly but surely improving the national government’s balance sheet.

Indeed, despite the loss of potential revenues from Republic Act 9504 – which exempts our minimum wage earners from paying income tax – and the absence of new legislative tax measures, our tax effort will continue to improve next year to 14.7 percent from 14.6 percent in 2008.

The need thus for borrowings to finance the deficit has been reduced from P75 billion this year to only P40 billion in 2009 even with the global downturn.

Next year, we propose to spend P40 billion more than our income to sustain economic activity and protect the economy from spillover effects of high food and oil prices. This is equivalent to only 0.5 percent of GDP, a minuscule amount in terms of our past deficit spending.

With performance-based budgeting put in place, the public is assured that frivolous spending has no place in this Administration.

Our continuous enhancements being undertaken in the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) is resulting to much-improved tax collection efforts.

To build the capabilities of these agencies further, we will provide the Bureau of Internal Revenue (BIR) some P1.0 billion to hire some 3,400 revenue assessment, collection and monitoring officers and legal officers, and beef up BIR’s operating funds.

We are allowing the Bureau of Customs (BOC) to use P260 million of its income from the Super Green Lane and the Container Security Fees to augment BOC’s operating budget.

We are making permanent the RIPS (Revenue Integrity Protection Service), the RATE (Run After Tax Evaders), and the RATS (Run After The Smugglers) in the DOF, BIR, and BOC, respectively.

On my instructions, the BIR and Customs established government-civil society tie-ups for information gathering and tax evasion and smuggling monitoring.

I say again, the reformed value added tax is very critical in financing various social and major public infrastructure programs today. It shall continue to be critical in the coming years.

We will spend 100 percent of the VAT reform proceeds for infrastructure and social services such as health, education, agriculture, roads and bridges, technology/tourism, shelter/security (HEARTS).

Our government has always been transparent in the use of the VAT. The taxpayers have the right to know how and where we use the revenues we collect from them.

Our annual information caravan on basic services showcases how the gains from VAT are being returned to the people through social services and infrastructure projects such as the creation of some 14,928 teaching positions, construction of 4,768 classrooms, and establishment of 19,912 Botika ng Barangay, to name a few.

Another source of good news is our reduced dependence on non-tax revenues.

Non-tax revenues from fee-collecting agencies (P59.0 billion), Bureau of the Treasury income (P45.4 billion) and privatization proceeds (P10 billion) have been set at P114.4 billion next year. The amount is P12.9 billion lower than this year’s P127.3 billion, with the decrease in the privatization target.

The collection of fees and other income for 2009 is better than expected. This is made possible with the P22.2 billion estimated income of the Department of Energy from the end of the take-or-pay provision in the Malampaya gas field agreement. Incremental Malampaya national revenues of P4 billion will go to our rice self-sufficiency.

Other major non-tax revenue contributors include some P5.8 billion representing the income from ePassport services of the Department of Foreign Affairs, P3.3 billion income of the Air Transportation Office, P2.2 billion income of the National Telecommunications Commission, P2.5 billion income of the Land Transportation Office, and the P1.9 billion in fees collected by the Bureau of Immigration.

I am also counting on Congress to pass our unified fiscal incentive bill that will rationalize numerous incentive laws and spur foreign direct investments. Countless incentive laws over the years have resulted in too many confusing incentive programs that have led to foregone revenues.

B. Viewing the Budget at a Glance

I thank our countrymen – the Filipino people – who have never failed to be there for us.

Their faith in this country and in this Administration has played a major role in shaping the budget I present to Congress today.

By Sector. In these challenging times, government shall allocate more funds for subsidies and other social assistance while at the same time address the constraints which often stand in the way of our growth momentum.

Consistent with our battle cry, “Labanan ang Kahirapan,” the social services sector corners the biggest share of the budget pie with 30.7 percent, or P434.0 billion; followed by economic services with 25.5 percent, P361.4 billion; debt burden with 21.4 percent, P302.6 billion; general public services with 16.9 percent, P239.6 billion; defense with 4.6 percent, P65.2 billion; and net lending with 0.9 percent, P12.2 billion.

Debt service’s 21.4 percent share in the national budget next year shows a conspicuous continuous decline from 31.6 percent in 2005 and 23.2 percent in 2007, in accordance with our deficit reduction strategy. This means more resources can now be used for essential spending on investments on our human and capital resources.

Our bias for pro-poor and labor-intensive programs and projects is evident in our allocations for the social and economic sectors.

Posting significant double-digit increases from this year’s budget are the economic sector, growing by 20.9 percent from P299.0 billion; the general public sector, 15.5 percent from P207.4 billion; and the social sector, 15.0 percent from P377.5 billion.

By Expense Class. Next year’s budget shows the same growth orientation with more funds going towards capital outlays and less for debt service.

Capital Outlays will get 17.9 percent or P253.1 billion, up by 19.2 percent from this year. The increased budget for capital outlays reflects our resolve to invest in infrastructure.

Current Operating Expenditures (COE) gets the bulk of the FY 2009 proposed national budget with P1.15 trillion, 14.7 percent more than this year’s budget. The amount represents a smaller 81.2 percent of the total, compared to the 82.6 percent share last year. Within this, interest payments will account for P302.6 billion, a lower 21.4 percent of the total budget.

The P1.15 trillion budget for COE includes, among others, beefed up provisions for Personal Services with P429.7 billion. This represents an 11.9 percent increase from this year’s P384.0 billion largely due to the provision for the proposed Salary Standardization Law III. We have to pay government people good wages in order to get and retain quality civil servants.

We have, under the Rationalization Program, been streamlining and improving the skills in the bureaucracy by promoting outsourcing of non-core and non-technical tasks, removing redundant and duplicative functions, and updating the needed competencies in government.

Local government units (LGUs) will get P261.0 billion next year, which is 19.3 percent more from this year’s P218.7 billion due to higher Internal Revenue Allotment (IRA) due them and the recognition of two episodes of IRA monetization.

Of the “tax plowbacks” to LGUs, some P5.4 billion represents their share from VAT collections – P1.4 billion higher from the P4.0 billion allocated this year. The amount is also P1.9 billion higher from the P3.5 billion LGU VAT dividends in 2007.

By Department. If we are to ensure better quality of life for every Filipino as we experience economic growth, we will need to increase our investments not just in infrastructure and basic services, but also in critical public needs and resource-generation such as affordable housing and aggressive revenue collection efforts.

Consistent with Constitutional provision, the P167.9 billion budget of the Department of Education – including the School Building Program – is the highest among the departments.

Other major recipients are the Department of Public Works and Highways, P120.0 billion; Department of the Interior and Local Government, P61.9 billion; Department of National Defense, P61.5 billion; Department of Agriculture (including AFMA), P39.7 billion; Department of Health, P27.8 billion; Department of Transportation and Communications, P23.6 billion; Department of Agrarian Reform, P16.1 billion; Department of Finance, P13.8 billion; and the Judiciary, P12.8 billion.

Departments getting significant increases in 2009 include, among others, the Department of Social Welfare and Development, 114.3 percent higher from P4.9 billion to P10.5 billion; and Department of Health, 36.9 percent higher from P20.3 billion to P27.8 billion.

C. Taking a Stand

1. Shielding the country from crisis

Our strategy at this time of uncertainty should be twofold – Government will go on harnessing increased resources to help families crushed by higher costs and worsening calamities, while investing more in keeping up the shield against future crises.

The rising costs of food and fuel have made life much more difficult for our indigent countrymen. We must ease their burden by providing them monetary support (cash assistance, power subsidies) and food assistance (feeding and nutrition programs, rice subsidies) – relief to fill their empty stomachs.

In addition, we are stabilizing food supply and lowering the prices of food and fuel to make these commodities more affordable for the common tao.

That another global crisis may happen is not impossible. We need to be prepared and invest now on our social protection programs even as we build our infrastructure, agriculture, and research and development bases. We must build a better future for us that is less dependent on rice importation, one that will ensure food on the table of every Filipino family.

Food self-sufficiency. At present, our rice self-sufficiency level stands at 90 percent. Our goal is to attain 100 percent rice self-sufficiency by 2013.

To do this, we need to pour more funding for food production as well as to coordinate programs over suitable areas to increase production.

We have increased investments in the agriculture and agrarian reform sector by 56 percent, from P43.0 billion this year to P67.28 billion for 2009 to support critical areas essential to food production – irrigation, farm-to-market roads, and post-harvest facilities, among others.

Modernizing our agriculture sector is critical to achieving food sufficiency in the country. We have thus increased allocation for the Agriculture and Fisheries Modernization Program by 66.3 percent, from its 2008 appropriation of P25.5 billion to P42.4 billion.

Our farmers, industrious toilers of the field, shall benefit from the P39.7 billion we are earmarking from the AFMA funds to finance in 2009 the Rice Self Sufficiency Plan (RSSP). This program is intended to boost the produce and income of our farmers.

Through our six assistance packages, dubbed “FIELDS” – fertilizers (P3.3 billion); irrigation and other infrastructure facilities (P17.2 billion); extension and education (P7.9 billion); loans for inputs, shallow tube wells, surface water pumps (P878 million); dryers and other post harvest facilities (P1.4 billion); and seed subsidy on quality genetic materials (P9.0 billion) – altogether P39.7 billion – we expect to make food abundant, accessible, and affordable.

Fertilizer is a vital agriculture input. But, with prices of fertilizers in the domestic market doubling from P1,500 to P1,900 per bag, some farmers are left with no recourse but to forego this important agricultural item.

We cannot let this happen. We must protect the hands that feed us.

In partnership with LGUs, we will provide fertilizer subsidies in the form of discount coupons to our palay farmers. With the coupon, farmers can save by as much as P500 when buying two bags of organic/chemical fertilizers.

So far, we have already given out 4.44 million coupons to LGUs for distribution to farmers in the countryside.

Irrigation is the life blood of rice production. Not even the most modern technology can do without adequate irrigation.

Since 2001, new irrigation systems for 146,000 hectares, including Malmar in Maguindanao and North Cotabato, Lower Agusan, Casecnan and Aulo in Nueva Ecija, Abulog-Apayao in Cagayan and Apayao, Addalam in Quirino and Isabela, and the restoration of old systems on another 980,000 hectares have increased our nation’s irrigated land to 1.5 million hectares.

In 2007, we restored and rehabilitated 96,210 hectares. This year, we intend to restore 52,000 hectares and rehabilitate 32,000 hectares to boost palay production.

Next year, we will irrigate more than 24,199 hectares of new area: rehabilitate 50,206 hectares; and restore 99,038 more.

We will also construct/rehabilitate 2,959 kilometers of farm-to-market roads to facilitate delivery of farm produce to the marketplace.

Knowledge of farming technologies can also help our farmers increase their yields.

With the P7.9 billion allocated to extension, education, and training under FIELDS next year, we will be able to provide 9,473 training/seminars for agricultural technicians, farmers and fisherfolk.

Loan assistance at low interest rates shall likewise be provided to farmers for purchasing farm inputs and other farm machineries to aid them in the field.

The Land Bank has quadrupled loans for farmers and fisherfolk. For more effective credit utilization, I instructed DA to revitalize farmers’ cooperatives.

I have directed government-owned and controlled corporations and government financial institutions, including Philippine Amusement and Gaming Corporation (PAGCOR), Philippine Charity Sweepstakes Office (PCSO), Government Insurance Service System (GSIS), Social Security Service (SSS), National Power Corporation (NPC), and the Philippine National Oil Company (PNOC) to set aside 5 percent of their 2007 budget surplus for rice and food production as their contribution to the Agricultural Guarantee Fund Pool (AGFP).

The AGFP shall be used to lessen the risks involved in agriculture lending, thereby facilitating the provision of credit in the agriculture sector.

Next year, we are targeting to assist some 105,788 individuals and 151 groups to have access to loans, guarantee, and insurance.

To reduce yield losses when drying palay, we will distribute 4,134 units of post harvest equipment; establish 1,892 drying facilities and 25 processing plants in rice-producing provinces; construct 128 grain centers, warehouses, Farm Level Grains Center, and cold storage facilities; and conduct 520 market-related events.

We are providing seeds at subsidized prices to help our farmers. The P9.0 billion seed subsidy we have set aside under FIELDS will enable us to distribute 0.5 million bags of hybrid rice seeds; 3.9 million bags of inbred certified rice seeds; 137,000 bags of Open Pollinated Variety (OPV) corn seeds; 109,000 bags of hybrid corn seeds; 15 million pieces of planting materials; 50,582 heads of various farm animals; and 183 million of fingerlings and broodstock.

FIELDS is our coordinated and comprehensive approach to boost food production and reduce our rice importation over the years.

While investing in long-term solutions, we can work to ease the near-term pain.

Rice is more than a staple food of Filipinos. It is our way of life! We must ensure that it remains available and affordable.

With our subsidies, NFA rice is among the regions cheapest. We have doubled our subsidy to the National Food Authority, from P2.0 billion in 2008 to P4.0 billion in 2009, for the procurement of 925,000 metric tons of palay at a buying price of P17/kilo and 1.5 million metric tons of imported rice. This procurement level aims to meet a targeted distribution of 2.15 million metric tons of rice for 2009.

We have set aside P500 million for our market-oriented programs which include setting up and maintaining Barangay Food Terminals and Bagsakan Centers.

Utilizing the gains from VAT, we have put up Bagsakan Centers in several areas in the country where farmers and fishermen can directly bring their produce to local consumers.

With these Centers, farmers do not have to go through middlemen to sell their crops, thereby reducing costs and making food and other basic commodities cheaper by at least 5 pesos than those sold at wet markets/retail stores.

Safety nets for the poor. With an adequate supply of rice, we can help keep the price of rice at affordable levels.

To ensure that affordable rice and noodles are available in poor communities, we have established 8,217 Tindahan Natin (TN) outlets nationwide in 2007, benefiting about 2,054,250 families.

This year, we will add, at the average, some 400 TN outlets per region in various localities identified as food-poor areas. Next year, with P160 million in allocation, we will establish 7,700 more, averaging 450 TN outlets per region, to benefit some 1,925,000 families.

From these outlets and the NFA rolling stores placed in various regions nationwide, poor families can still buy subsidized rice.

While working on a long-term solution to food sufficiency, we will cater to the immediate food requirements of our people to shield them from hunger and malnutrition, and other risks.

The World Bank says that in Brazil, the income of the poorest 10 percent has grown 9 percent per year versus 3 percent for higher income levels due in large part to their family stipend program linking welfare checks to school attendance. We have introduced a similar conditional cash transfer program, Pantawid Pamilya.

We have channeled more funds, amounting to P5.0 billion, to the Pantawid Pamilyaprogram to provide cash grants to 321,000 poorest households. By subsidizing the poor’s educational and health/nutrition needs, this direct assistance program intends to break the intergenerational poverty cycle.

To ensure that our cash grants go to the poorest of the poor, our Social Welfare and Development department will use a computerized ranking system – the Proxy-Means Test – to assess socio-economic characteristics such as ownership of assets/appliances, type of housing unit, and access to water and sanitation facilities in order to identify target beneficiaries.

We will also assist them through our Malusog na Simula, Yaman ng Bansa Food for School Program; Self-Employment Assistance – Kaunlaran (SEA-K) Program; and Emergency Operations – Assistance to Conflict-Affected Mindanao (EMOP-ACAM) Project.

With an increased allocation of P5.1 billion in 2009, the Nutrition Program of DSWD and DOH will benefit more than 1.2 million pupils in food-poorest localities. Pre-elementary and elementary students will be provided with a kilo of rice for 180 school days and 40 summer days. In Tawi-Tawi, Zambo Norte, Maguindanao, Apayao, Dinagat, Lanao Sur, Northern Samar, Masbate, Abra and Misamis Occidental and Agusan del Sur, Kalinga, Surigao Sur and calamity-stricken areas, we will launch a massive school feeding program at P10 per child every school day.

We are also providing for the food security needs of our people in conflict-affected areas in Mindanao as a support as well to the peace process in the South.

With the assistance of the United Nations World Food Programme, we have implemented the Emergency Operation Philippines Assistance to Conflict Affected Mindanao (EMOP-ACAM) to help promote education, health, and social development in the area.

Since its implementation in 2006, the project has already benefited some 1.8 million individuals in 54 municipalities and 371 barangays in Cotabato, Lanao del Norte, Lanao del Sur, Sultan Kudarat, Maguindanao, Basilan, Sulu, Zamboanga del Norte, Zamboanga del Sur, and Zamboanga Sibugay.

These areas were chosen based on high poverty incidence, presence of internally displaced persons, and number of conflict-affected municipalities. So far, we have already distributed 23,556 metric tons of food in these areas.

Give a man a fish, and you feed him for a day. Teach a man to fish and you feed him for a lifetime.

In microfinance, loans have reached P102 billion or 30 times more than the P3 billion we started with in 2001, with a 98 percent repayment record. Major lenders include the Land Bank with P69 billion, the Peoples’ Credit and Finance Corporation P8 billion, the National Livelihood Support Fund P3 billion, DBP P1 billion and the DSWD’s SEA-K.

SEA-K provides capital assistance and training in entrepreneurial skills to poor families to establish and self-manage a sustainable community-based micro credit organization.

Contrary to the common perception that the poor are a credit risk, our SEA-K program proves that they are capable of paying loans and building savings.

With a capital seed fund of P1.4 billion, our SEA-Kaunlaran has benefited 324,262 members while our SEA-Kabayan, with a capital seed fund of P203 million and 229 projects, has already benefited 10,133 members. Next year, we are setting aside P39 million to help 14,105 members of SEA-K I and II.

2. Fortifying the shield

We must buttress all avenues for development – infrastructure, energy, health, education, housing, science and technology, to name a few – to fortify our nation against all economic challenges that our country is facing.

Only by doing this can we be certain that we are able to march forward.

More investments in infrastructure. Investments are a key variable in the economic growth equation. They create employment and allow the production and delivery of goods and services that fuel the economy.

For investments to come in, investors’ access through infrastructure development must be sustained and intensified. Which is why, on top of government sources of funding, we need to tap alternative private investment sources for infrastructure development.

The government wields a sizeable P147.5 billion war chest in next year’s budget for infrastructure. The amount is 20.7 percent higher than this year’s P122.2 billion, and represents a larger 1.7 percent of GDP compared to this year’s 1.6 percent.

The bulk of the infrastructure funds, or roughly P83.9 billion, will be used to build and maintain roads and bridges. This represents a 53.6-percent growth compared to this year’s provision of P54.6 billion.

Roads and bridges will again be given priority to widen access to economic activities and reduce logistics costs for businesses.

I say ‘again’ because, as of 2007, we have already paved 71 percent, or 21,007 kilometers (km) of our national roads and made permanent 95 percent of our bridges spanning 297,044 lineal meters (lm).

Under the P120.0 billion budget of DPWH for 2009, we intend to construct, repair and rehabilitate 70,607 kms. of national roads costing P82.0 billion; and replace, make stronger, and construct 7,674 lineal meters of existing and new bridges amounting to some P11.7 billion.

Some P1.9 billion under the Arterial Road Links Development Project (Phase V and VI) will be used to improve and reconstruct roads covering the provinces of Northern Samar, Western Samar and Leyte via the Catarman-Calbayog and Allen-Calbayog-Calbiga roads and Agas-agas Bridge along Tacloban-Liloan Road Section. Thus, the infrastructure links programmed for the poorest provinces like Northern Samar: Laoang-Lapinig-Arteche, currently a mud path; San Isidro Lope de Vega; the rehabilitaiton of Maharlika in Samar.

For the National Roads Improvement and Management Program (Phase 2), some P7.0 billion will fund the improvement and widening of national roads and bridges. This will be complemented by the P1.9-billion Road Enhancement and Asset Preservation Management Program (REAPMP) which aims to improve, preserve and manage our national road system.

Other notable projects include, among others, the P2.5-billion Tulay ng Pangulo sa Kaunlaran Projects (Phase I) to install several two-lane fly-overs, long-span bridges, and compact bridges along congested national highways in urban centers, and the Strong Republic Nautical Highway (SRNH); and the P2.2-billion Mega Bridges for Urban and Rural Development Projects to start the construction, installation and establishment of several girder-type flyovers and “universal bridges” or national bridges along the country’s congested highways and road networks.

These major roads and bridges to be constructed and restored are vital to the community. They serve as arteries for transporting people and goods.

We shall deliver on the infrastructure commitments I made in my previous State-of-the-Nation Addresses.

Of the amount allotted for roads and bridges, 38.6 percent, or P8.8 billion – the biggest share – goes to Mindanao, with Central Luzon getting 31.1 percent or P7.1 billion; North Luzon AgriBusiness Quadrangle, 22.5 percent or P5.1 billion; and Luzon Urban Beltway, 7.8 percent or P1.8 billion.

Specific projects include, among others, the 280.65-km El Nido-Bataraza Road worth P4.3 billion; the 392.73-km Surigao-Davao Coastal Road, P2.6 billion; the 120-km Baler-Aurora-Casiguran Road, P1.7 billion; and the 106.91-km Tarlac-Nueva Ecija-Dingalan Port Road, P821.1 million.

We are cutting costs through more efficient transport. For this reason, we have given the DOTC some P23.6 billion for 2009, most of which will be used to fulfill my SONA commitment to provide the country with an efficient and well-integrated transport system.

On our nautical highways, RORO boats carried 33 million metric tons of cargo and 31 million passengers in 2007. We have built 39 RORO ports during our Administration, 12 more are slated to start within the next two years. In 2003, we inaugurated the Western Nautical Highway from Batangas through Mindoro. Panay and Negros to Mindanao. This year we launched the Central Nautical Highway from Bicol mainland, through Masbate, Cebu, Bohol and Camiguin to Mindanao mainland. These developments strengthen our competitiveness.

An integrated transport system – by air, land, rail or sea – ensures accessibility and the safe and affordable movement of people, goods and services.

Rail projects under the DOTC budget include the closing of the LRT-MRT loop.

The increasing economic importance of airports in today’s borderless and dynamic business environment cannot be overlooked. For this reason, we have set aside some P3.6 billion under next year’s budget to construct and repair 25 airports and navigational facilities.

These projects include, among others, the Puerto Princesa Airport, P300 million; Kalibo Airport, P350 million; Panglao Airport, P308 million; Tacloban Airport, P525 million; Alaminos Airport, P150 million; and Butuan Airport, P282 million. We are repaving airports that are useful for agriculture, like Zamboanga City Airport.

Apart from my SONA commitments, the DOTC budget will also set aside some P499 million to upgrade and modernize 15 air and navigational facilities; P2.0 billion for the New Communications and Navigation Surveillance/Air Traffic Management Systems Development Project to effectively and efficiently control and manage the air traffic within the archipelago; and some P151 million for the Mactan Buoy Base Punta Engaño, Lapu-Lapu City to serve as a main repair and maintenance facility of all aids-to-navigation equipment in the Visayas and Mindanao areas.

Maritime safety is of paramount importance. The recent fate of the commercial passenger ship, MV Princess of the Stars, attests to this. We must see to it that lives will never be lost again due to similar mishaps in the future.

We must put safety first and should invest heavily in ensuring safety at sea. The country’s P50-billion fishing industry, not to mention maritime transportation, will be given the much-needed boost if we improve vessel safety and avoid vessel-related fatalities.

This is the very reason we are funding the P2-billion Follow-On Search and Rescue Vessels Project to construct and commission ten 35-meter search and rescue vessels.

Related to this, we are infusing some P2.0 billion for the protection of life and property at sea, including safeguarding the marine environment and resources, and enforcing all applicable maritime laws.

To provide flood and waterlogging protection to commerce and agriculture, a 26.4 percent increase for flood control and drainage provisions has been included in the 2009 budget. This amounts to some P7.5 billion, up from P6.2 billion this year. Some P4.7 billion of this amount will be used to construct and rehabilitate 756,505 lineal meters of major dikes, riverwalls, revetments waterways, floodgates and mains.

Sufficient funds for social programs. A number one priority of my Administration is services to uplift the lives of the poor. No other priority encapsulates so succinctly the commitments I have made since I assumed the Presidency.

Education is a great equalizer, the means for poor families to escape the clutches of poverty. Our government shall continue to give funding priority to education.

In the 2009 budget, we have raised the funds for education to include a comprehensive package that expands pre-school, reaches the unschooled, keeps students in school, and improves the quality of education at all levels.

The education sector will get some P204.9 billion in 2009, higher by 9.8 percent than its 2008 level of P186.6 billion. Of this amount, the Department of Education (DepEd), including the School Building Program, is allocated some P159.8 billion, which is an increase of 14.1 percent or P19.8 billion from this year’s P140.0 billion DepEd allocation.

Under the DepEd budget, some P2.5 billion will fund the creation of 19,553 new teaching and non-teaching positions. This is on top of the P1.7 billion for 10,000 Teacher I positions and 1,661 Principal positions provided this year.

If budgeting were to be an Olympic event, we would have broken several records in terms of our 6,000 classrooms-per year performance to narrow the classroom gap.

For 2009, we intend to build enough new classrooms to achieve a 45:1 elementary student: classroom ratio with an average cost of P650,000 per classroom. Beyond achieving that ratio, we will align the funds to build science laboratories. These classrooms and science laboratories will cost us some P7.5 billion, or 12.2 percent higher from this year’s P6.6 billion classroom budget.

To ensure that every pupil has all the necessary textbooks in all key subject areas at the elementary and high school levels, we will set aside some P2.3 billion for 37.1 million textbooks and 1.7 million instructional materials. This is higher than the P2.0 billion that we have provided in 2008 for 20.9 million textbooks and 1.4 million instructional materials.

Pre-school program is allocated P3.4 billion to prepare 680,855 five-year old children for formal schooling. The amount represents a 47.8 percent growth from the P2.3 billion allocated this year for 636,788 five-year old children.

We have also set aside some P1.7 billion for the purchase of 1.4 million desks/tables/chairs in 2009. Again, this amount is higher (by 61 percent) than the P1.1 billion provided in 2008 for the purchase of 724,000 desks/tables/chairs.

Education is very important to us Filipinos. But, no matter how our parents and students work hard, the main barrier to availing and completing education is lack of financial resources.

That is why aside from free public elementary and high school education, college scholarship funds have doubled, while private high school scholarship funds have quadrupled. I have personally instructed our education officials to increase the provision for scholarships next year.

I am very glad to announce that the P7.2 billion scholarship budget for 2009 represents a 13.3 percent (or P849 million) increase from this year’s P6.4 billion.

The amount includes the P3.7-billion Government Assistance to Students and Teachers in Private Education (GASTPE) for 665,975 grantees; P1.0 billion for Technical Education and Skills Development Authority’s Training for Work Scholarship Program (TWSP) for 150,000 grantees; the P508-million scholarships under the National Commission on Indigenous Peoples and Department of Science and Technology-Science Education Institute for 13,500 scholars; the P851 million under the Commission on Higher Education for 51,797 student beneficiaries; and Philippine Science High School’s P692 million for 3,226 scholars.

On top of the P7.2 billion scholarship budget, state universities and colleges (SUCs) also subsidize students in tertiary education. I have directed the Department of Budget and Management to increase by P2 billion the budget of SUCs – on top of their retained P8.2-billion 2008 income – from P20.2 billion this year to P22.8 billion in 2009.

Enabling every Filipino to lead healthy and productive lives is likewise an utmost concern of my Administration. We intend to further invest on public health and strengthen public health service systems.

The health sector, led by the Department of Health (DOH) and the Philippine Health Insurance Corporation (PHIC), will be given P35.8 billion in 2009, some 24.7 percent higher than this year’s P28.7 billion. In addition, government hospitals will continue to retain and use their income to improve the delivery of health services.

Before I became President, 1.5 million indigents had health insurance. In 2001, we said, we will add half a million. That year, we insured more than one million. Today, 65 million Filipinos have health insurance, more than double that of yeat 2000, including 15 million indigents. The indigent beneficiaries largely come from West and Central Visayas, Central Luzon, and Ilocos.

Some P3.3 billion provided next year under the National Health Insurance Program (NHIP) – PHIC’s main instrument – to cover some 4.7 million indigent households will ensure universal coverage for all indigents, especially in Tawi-Tawi, Zambo Norte, Maguindanao, Apayao, Dinagat, Lanao Sur, Northern Samar, Masbate, Abra and Misamis Occidental. Especially their farmers and fisherfolk.

Likewise, the DOH and its attached agencies will be given some P23.0 billion, which is 13.3 percent higher than its P20.3 billion allocation in 2008. The amount is intended to upgrade the facilities of health agencies (P2.0 billion) and to immunize about 2 million children ages 0-11 months old (P843 million).

We are integrating the programs of DSWD, DOH, GSIS, SSS and other anti-poverty agencies into a National Social Welfare Program to protect the poorest from the global crisis, and to help those whose earnings are limited by illness, disability, loss of job, age and so on – through livelihood projects, microfinance, skills and technology transfer, emergency and temporary employment, pension funds, food aid and cash subsidies, child nutrition and adult health care, medical missions, salary loans, insurance, housing programs, educational and other savings schemes, and now cheaper medicine.

I thank Congress once again for passing the Cheaper Medicines Act which will increase competition, bring down prices and promote better quality medicines. To complement this, we have set aside for 2009 some P1 billion to construct 3,913 Botika ng Barangay and to bring affordable medicines within reach of poor communities.

Equally important is providing affordable shelter for Filipinos.

Housing is integral to the wellbeing and health of children and families. Without proper homes, families cannot manage their daily lives and their children’s safety, health and development are put at risk.

Under my dispensation, housing costs have been made affordable to a low-income family.

Since I assumed office, some 895,099 families have benefited from our housing programs. We have regularized the tenure of informal settler families through the asset reform program, which enables them to acquire the land they occupy.

Pag-Ibig housing loans increased from P3.82 billion in 2001 to P22.6 billion in 2007. This year, it experienced an 84 percent increase in the first four months alone. It’s super overheating.

Notwithstanding my Administration’s policy to allocate P5.0 billion yearly to the housing sector, we will increase the budget for the sector to P5.3 billion next year. The additional P300 million will be spent for the operational requirements of regulatory agencies such as the Housing and Urban Development Coordinating Council and the Housing and Land Use Regulatory Board.

Of the P5.3 billion housing budget, the National Housing Authority gets the biggest chunk with P3.5 billion, roughly 66 percent. The amount will be used to set up resettlement sites and build new housing units.

The National Home Mortgage Finance Corporation will be provided P900 million to assist targeted beneficiaries in purchasing lots from their owners through the Community Mortgage Program (P500 million), and as equity for the payment of mortgages for securitization (P400 million).

Some P600 million will be set aside for the Home Guaranty Corporation to support its credit guarantee program that provides risk cover and task incentives for housing credits extended by finance institutions.

For clean water, so important to health, some P1.5 billion is allocated for the purpose, representing a very significant 171 percent increase from this year’s P554 million.

The amount will install water systems to hundred of waterless towns.

Less energy dependence. As with fiscal and food challenges, the global energy crunch demands better and more focused resource mobilization, conservation and management.

Under my watch, the electrification program has seen an unprecedented success.

When electricity and gas prices go up, the price of everything follows suit.

We are successful in increasing energy self-sufficiency – 56 percent, the highest in our history. We promote natural gas and biofuel; geothermal fields, among the world’s largest; windmills like those in Ilocos and Batanes; and the solar cells lighting many communities in Mindanao.

For this reason, we have infused some P4.7 billion to the Department of Energy, the lead agency in the implementation of the “Biofuels Act of 2006″. The DOE’s Alternative Fuel Program seeks to promote and increase the use of alternative fuels to lessen our dependence on energy importation and eventually achieve a 60 percent self-sufficiency level in 2010.

Biofuels will allow us to curb our dependence on imported oil. Jatropha estates are starting in 900 hectares in and around Tamlang Valley in Negros Oriental; 200 in CamSur, 300 in GenSan, 500 in Fort Magsaysay near the Cordero Dam and 700 in Samar.

Jatropha, a non-food crop, does not compete with food. It is planted only in marginal areas where food crops are not planted or cannot be planted. It is a hundred percent substitute for diesel.

To educate the public and generate awareness of the efficient and judicious use of energy through the adoption of various energy conservation measures, some P33.9 million is allocated to DOE’s Energy Efficiency and Conservation Programs.

The DOE’s budget will support the department’s Philippine Energy Efficiency Program (PEEP) for the next two years. When completed, the project will result in savings for the government from reduced oil import per year and will defer requirements for new power plants, in addition to savings in fuel costs. For households, each lifeline electricity consumer will save about P800 per year for the next seven years.

One of the components of PEEP is the efficient lighting initiative. Lighting accounts for more than 50 percent of the evening peak load in the Philippines. The use of proven technology in efficient lighting can reduce the electricity demand for lighting by 40 percent to 80 percent.

Under my Administration’s electrification program, the DOE’s Barangay Electrification Program Using New and Renewable Energy and Remote Area Electrification Subsidy Program will be allotted P98.8 million and P96.3 million, respectively. The programs intend to energize a total of 95 barangays.

I am very proud to report that for 2009 we have infused some P500 million budget to the National Electrification Administration to enable it to complete the ongoing Rural Electrification Project. This means an additional 166 energized barangays translating to as many communities vigorously contributing to the country’s economic output.

As of end-2007, a total of 34,682 of targeted 36,030 barangays (96.25 percent) have been energized. The project is expected to be completed in 2009.

Support for S & T. The global economy having increasingly become more knowledge-based, we must be a more dynamic player in the various fields of science and technology relevant to our socio-economic priorities. This calls for investing in education and science and technology infrastructure and human resource development, and vigorously pursuing R & D priorities, to include such areas as ICT, alternative sources of energy, biotechnology for health, agriculture and industry, and environment.

The P5.4 billion budget of the Department of Science and Technology for 2009 will narrow the country’s S&T gap with more developed countries. This amount will fund the agency’s S&T scholarship program intended to develop a critical mass of scientists and engineers in the country. A total of 18,253 scholarships will be given to deserving students.

The DOST budget also includes provisions for its technology services program that will cater to 20,907 small and medium enterprises (SMEs), improving their access to available technologies such as testing and calibration, information services, and disaster and hazard mitigation services.

By providing technology, marketing and other business development support to new entrepreneurs, we will increase our productivity and global competitiveness.

Other notable items in the DOST budget getting additional allocations are the construction of the Philippine Atmospheric, Geophysical and Astronomical Services Administration building, and the rehabilitation and improvement of Philippine Science High School facilities worth P282 million.

Some P127 million has also been included in the DOST budget to fund the Philippine Institute of Volcanology and Seismology’s scientific and technological research and development, including disaster mitigation. We must improve our disaster mitigation – and prediction – measures because, coupled with good planning, these protective mechanisms will greatly reduce people’s vulnerability to disasters.

To uphold the Millennium Declaration of making the benefits of new technologies available through improved ICT applications, we are providing some P1.0 billion for our E-Government Fund and P113 million for the Commission on Information and Communications Technology (CICT) for the continued development of the country into a world-class ICT services provider.

We have given DepEd some P720 million to provide an average of 11 computer packages to equip 1,600 new computer laboratories in recipient-schools. This is more than double the P260 million amount provided in 2008. We have also allotted some P1.9 billion to provide for the construction and rehabilitation of 750 science laboratories.

3. Protecting the environment

Equally important as social services, infrastructure, peace and good governance is the protection of the environment.

We join the worldwide campaign against climate change because we value our country. We love our children and we believe that, apart from education, a clean and green environment is the greatest legacy we can give to them.

Green Philippines. On the environment front, we will focus on:

1) Conservation to beautify our barangays and clear our cities of trash; clean up industrial sites that are eyescores and unhealthy; and purify our water;

2) Energy independence to support DOE’s efforts on energy resources development, utilization and conservation activities;

3) Reforestation;

4) National parks and wildlife refuges to turn our coral reefs and beaches — the wonder of the world — our mountain vistas and our tropical forests into national parks and international sanctuaries for eco-tourism and scientific research.

Green Philippines is what I am aiming for in allocating an additional P3.9 billion to the Department of Environment and Natural Resources (DENR) over its 2008 allocation of P8.5 billion, or a total of P12.4 billion for 2009.

Of this increase, P2.0 billion will be used for its reforestation program which includes the rehabilitation and restoration of watershed areas, mangrove rehabilitation, and rehabilitation of forest lands.

The DENR budget also has P547 million for its Database Management and Information System and P613 million for the Environmental Management Bureau. Together, the abovementioned provisions will go a long way on ensuring proper supervision of land, sea, and air quality as well as providing stakeholders adequate data regarding the environment.

Some P11.2 million will to Coastal Hazards Assessment to provide accurate and up-to-date information of the country’s coastal areas so that the impact of rising sea levels caused by climate change may be minimized.

Cadastral Survey gets P786 million to provide for comprehensive and accurate data on land resources of the country; facilitate land disposition, and adjudication of land cases; and provide map-based data for zoning and land use programming.

4. Strengthening the foundations of government

Our investments also include essential ways to strengthen our institutions of governance in order to fight this battle every single day.

With this commitment to fight corruption in government, we can go one step further in having a government that is participatory, accountable, transparent; follows the rule of law; and is effective and efficient in combating all threats to good governance.

Good governance. Leading the charge towards a well-disciplined bureaucracy is the Office of the Ombudsman which, from its dismal past record, has increased its conviction rate to 500%. It filed some 678 cases in 2007 before the Sandiganbayan and the regular courts.

The Ombudsman has a P1.1 billion budget for 2009.

The Commission on Elections, caretaker of the most hallowed of democratic practices – the right to suffrage – is allotted P3.8 billion for ensuring honest and clean elections in 2010. Some P1.8 billion of this amount will go to preparatory activities for both the National and Local elections while P367 million will be used for the Cleansing of Voter Registration Records. An amount of P1.4 billion, on the other hand, will be used for automation of the Electoral System, a national version of the successful ARMM computerized elections.

The Department of Justice will get a total of P7.2 billion in 2009, an increase of P347 million over its 2008 allocation. The highlight of the budget increase is the boost in manpower with the creation of 78 positions, including 50 Associate Prosecutor II positions, involving P23 million under the DOJ-OSEC budget.

The Office of the Solicitor General, meanwhile, will receive P16 million for the reclassification of positions and the upgrading of OSG lawyer positions. Some P3 million goes to special allowances in accordance with Republic Act 9417.

Finally, P13 million will be spent for the upgrading of lawyer positions in the Public Attorney’s Office, making PAO lawyers at par with government prosecutors in compliance with Republic Act 9406. The RA also gives PAO operational independence, thereby assisting the agency to provide better services to indigent Filipinos in need of PAO’s services.

In May of this year a memorandum of agreement creating the Judicial, Executive, Legislative Advisory and Consultative Council (JELAC) enhanced the coordination between the three co-equal branches of government to formulate solutions regarding the Judiciary, and its infrastructure requirements, creation of new positions, and security of tenure of judicial personnel.

The Judiciary, allotted P10.7 billion in 2008, has a budget of P12.1 billion under the 2009 budget. This includes P11.3 billion for the Supreme Court and lower courts; P322 million for the Sandiganbayan; P883 million for the Court of Appeals; and P230 million for the Court of Tax Appeals.

Of the P12.1 billion allotted to the Judiciary, P423 million will be spent for the maintenance of 334 Halls of Justice; P600 million to fund 533 new positions for new court salas; and P20 million for the creation of positions for the third division of the Court of Tax Appeals.

With funding for the improvement of our justice system, we will ensure that the rule of law and uniform and swift dispensation of justice hold true in all parts of our country.

The Department of the Interior and Local Government, on the other hand, is provided P61.9 billion, an increase of P8.7 billion from its 2008 level of P53.2 billion.

The Philippine National Police (PNP) has a total budget of P47.1 billion for 2009, representing an increase of P7.0 billion from its 2008 allocation of P40.7 billion.

In 2009, the PNP, on the second year of its Capability Enhancement Program, requires a budget of P2 billion. For this program, the PNP will use P395 million to hire 3000 new policemen; P1.1 billion to acquire patrol vehicles (watercraft and aircraft), and P176 million to purchase 5,000 firearms.

An additional P100 million is allotted for the construction of new police stations to house the additional policemen and further increase police visibility.

The Bureau of Fire Protection will get P49 million for the salaries and allowances of 500 new recruits and P64 million for the creation of additional 500 Fire Officer I positions. For 2009, a total of P1.1 billion will be spent for the acquisition of 100 fire trucks, along with 545 breathing apparatus and 500 sets of personnel protective equipment such as fire coats, helmets, boots, and gloves.

The Bureau of Jail Management and Penology will spend P63.5 million for 500 new Jail Officer positions. Some P39 million, on the other hand, will be used to construct new jail facilities and 2 regional offices buildings; and P31 million and P127 million, respectively, to procure firearms and 150 prisoner vans.

The training of our uniformed personnel under the supervision of the Philippine Public Safety College will be improved with an increase of P162 million over its 2008 allocation of P711 million. Included in this amount is P10 million for the purchase of equipment for improvement of training.

The Department of Defense is given an allocation of P56.5 billion, an increase of P5.1 billion from its 2008 allocation of P50.9 billion in 2008. Included in this amount is the P5.0 billion increase of the Armed Forces budget pursuant to my directive of eliminating the Communist Terrorist Movement by 2010. This allocation includes P329 million for the creation and operational requirements of 3 infantry battalions.

A more accountable, better paid bureaucracy. Starting July, those earning P200,000 a year or less don’t have to pay income tax. That is a P12 billion tax break for the poor and the middle class. I thank Congress for Republic Act No. 9504 which became effective this July.

In the same vein, I hope that the Legislature will further aid our state workers by making their pay more competitive with the private sector.

Government employees have received a 10 percent increase in pay for the last two years. I urge Congress to pass the Salary Standardization Law (Part 3).

SSL 3 aims to attract and retain competent technical personnel by narrowing the disparity between the salaries in government and the private sector, particularly at the professional and managerial levels. The professionals who will benefit significantly from this measure are the teachers, nurses, lawyers, and medical officers whom we are losing to outside competition.

The proposed law will also rationalize the compensation structure by providing higher salary rate increase to employees with higher levels of responsibility. In 2009, some P20 billion is earmarked for the first tranche of the implementation of the standardization law.

Together with our ongoing Rationalization Program to streamline and create a more efficient bureaucracy, these reforms will pave the way for an accountable and performance-oriented civil service.

Performance-based budgeting. The Department of Budget and Management has, for the past years, been making improvements in the way our public expenditures are managed, a part of which is the implementation of the performance-based budgeting approach.

The approach, hinged on what is called Organizational Performance Indicator Framework (OPIF), aims to focus resources on agencies’ vital core functions and on results that matter most. Under the OPIF, agency performance will be measured against clear and measurable indicators.

In crafting their 2009 budget, departments and their bureaus and attached agencies, as well as OEOs (other executive offices) have been required to fully incorporate the reform measure in their budget proposals. This requirement has been strictly enforced.

More government entities have adhered to an OPIF-based budget in 2009 with the inclusion of State Universities and Colleges (SUCs) and Fiscally Autonomous Agencies.

The years to come will see more applications of this performance-based budgeting approach to improve our overall management of expenditures.

 

IV Conclusion: Emerging Strong from Adversity

Facing a global economic crisis, our government stands ready to take care of our people, and to preserve our nation’s future.

When we would have otherwise crumbled, we remain resilient and poised for a modest economic growth. Because of the sound economy we have built over the years, borne out of the tough choices we made, we have the wherewithal to triumph over all adversities.

The VAT, along with other fiscal and revenue measures, proved to have been prudent decisions.

My responsibility as President is to take care to solve the problems we are facing now and to provide a vision and direction for how our nation should advance in the future.

Our priorities for the year 2009 have been set clearly before us. We must use our available resources to tide us over these hard times. We must shield our people, especially the most vulnerable, from the worst effects of the crisis.

This short-term relief, however, should not be at the expense of our long-term gains. We must continue to invest in our people, if we are to become a truly modern nation within our lifetime.

We must build our capabilities and reduce our country’s weaknesses now, than to be vulnerable once again to crippling external shocks in the future. We must become self-sufficient and self-reliant – now more than ever.

I ask Congress to support us in this endeavor by passing the 2009 budget expeditiously. With its help and that of the Filipino people, our country shall pull through – emerge from the global crisis better and stronger.

Our country and our people have never failed to be there for us. We must be there for them now.

God bless us all!