Gov’t finalizing P2.6-T national budget for ’15

Finalizing next year’s national government budget—estimated at P2.6 trillion—may take longer than expected due to the need for agencies to prepare for “Yolanda”-like natural calamities, which would make projects more expensive.

Budget Secretary Florencio Abad said the Development Budget Coordination Committee (DBCC) was still finishing the administration’s budget proposal for 2015. This will be submitted to Congress the day after President Aquino’s State of the Nation Address next month.

“What’s delaying it is the ‘build-back-better’ order,” Abad told reporters Monday, referring to the administration’s directive to all agencies to be aware of the possible effects of future natural calamities.

“We have to introduce resiliency. We have to tell those in vulnerable areas to adjust their designs to prepare for disasters, but that will entail cost,” he said.

Abad said next year’s budget would likely be around P2.6 trillion, 15 percent higher than this year’s P2.26 trillion. By 2016, the government is expected to spend P3 trillion.

Reconstruction efforts in provinces affected by Supertyphoon “Yolanda,” considered the strongest storm to ever make landfall anywhere on the planet, is expected to cost the government P106 billion over the next three years.

The DBCC, which is made up of representatives from the Department of Finance, the National Economic Development Authority, and the Bangko Sentral ng Pilipinas, among others, has until July 29 to prepare its budget proposal for Congress—a deadline Abad is confident will be met.

Since President Aquino took office, Congress has consistently passed the national government budget ahead of schedule. In the previous regime, budgets were passed late, which constrained the government’s ability to spend on various projects.

The national government’s annual budget plays a key role in the Aquino administration’s economic agenda.

Among others, it details the government’s infrastructure spending plan that should allow the country to catch up with its neighbors in the region.

Next year, the government intends to spend P600 billion on infrastructure or the equivalent of 4.1 percent of gross domestic product (GDP), up from 3.3 percent this year. By 2016, the government will spend the equivalent of 5 percent of GDP on infrastructure.

Amid talks of next year’s budget, Abad said the government was still scrambling to find ways to speed up spending in the coming quarters.

In April, the government recorded a record-high monthly budget surplus of P80.9 billion, nearly wiping out the state’s deficit built up since the start of the year. The expected improvement in collections by both the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) partly explained the surplus.

However, spending for the month was down 6 percent, despite the need for higher spending in Visayas.

At the end of April, the government’s budget deficit stood at P3.3 billion, lower than last year’s P29.7 billion.

“It’s an issue of delivery and execution,” Abad told reporters. He said the slow procurement processes of most agencies, mainly as a result of the lack of manpower, meant that money could not be spent as fast as the government wanted.