B. Na Onal Government Fiscal Program
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Technical Notes on the 2016 Proposed National Budget Produced by: Department of Budget and Management August 2015 Produc on Team: Knowledge Management-Technical Working Group Lead Writer Joy S. Almazan Wri ng Team John E. Lansangan John Alliage Morales Rupert Mangilit Mercelle Therese Matundan Ranel Ram Cheng Jose Escalante Data Coordinator Jeannie S. Ponio Design & Layout Nardsunga Jeannie S. Ponio Emmie Alma M. Albangco Informa on Coordina on: Fiscal Planning and Reforms Bureau Budget Technical Bureau Budget & Management Bureaus Other DBM offi ces/units Key government agencies Editors: Overall: Francis Y. Capistrano Style: Deedee Sta. Cruz-Espina Adviser: Undersecretary Laura B. Pascua About the Technical Notes on the 2016 Proposed Na onal Budget “The President shall submit to Congress, within thirty days from the opening of every regular session as the basis of the general appropria ons bill, a budget of expenditures and sources of fi nancing, including receipts from exis ng and proposed revenue measures.” - Sec on 22 Ar cle VII of the 1987 Cons tu on To further increase fi scal transparency, the Aquino administra on has been improving the informa on presented in the annual proposed Budget that it submits to Congress. The Na onal Expenditure Program (NEP), the proposed budget in the form of the general appropria ons bill, has increased from one volume in fi scal year 2011 to three volumes in 2016. These expanded versions of the NEP are the results of eff orts to show in greater detail the reduc on of lump sum funds, as well as to present programs, ac vi es, and projects. Likewise, with the adop on of the Performance-Informed Budget structure, the NEP now presents the agencies’ performance targets alongside their proposed appropria ons. Moreover, the NEP exhibits the new informa on that the government has introduced in the Budget of Expenditures and Sources of Financing (BESF): from the medium-term macroeconomic and fi scal program to the es mates of tax incen ves. This publica on, the Technical Notes on the Proposed Na onal Budget, which broadly discusses the policies, strategies, and priori es that shaped the proposed Budget, is a supplement to the President’s Budget Message. Beginning with the 2015 Proposed Budget, the government has produced this publica on to provide narra ve descrip ons of the fi gures presented in the NEP and BESF. Produced by the Department of Budget and Management (DBM), it comprehensively discusses the policies and reforms embedded in the proposed Budget; the government’s fi scal program and macroeconomic assump ons; and key priority programs, their objec ves, targets, and accomplishments so far. In addi on, the Development Budget Coordina on Commi ee (DBCC) has seen it fi t to publish the Fiscal Risks Statement together with the proposed Budget. This document, fi rst introduced in 2013, discusses and quan fi es the macroeconomic, external, environmental, and other risks to the government’s fi nances, and presents measures being taken to mi gate these risks. Moreover, to cater to non-technical audiences, the DBM sustains the publica on of the annual People’s Proposed Budget, which presents simplifi ed informa on on the proposed Budget using plain language and illustra ons. The government hopes that this edi on of the Technical Notes, together with the other Budget publica ons, enables Congress and other stakeholders to easily understand and straigh orwardly scru nize the proposed Budget for 2016. TABLE OF CONTENTS I. INTRODUCTION AND PRINCIPLES OF THE PROPOSED BUDGET 1 A. Spending Within Means: A New Millieu of Fiscal Sustainability 3 B. Inves ng in the Right Priori es: Resources Focused on the Requirements of Inclusive Growth 4 C. Delivering Measurable Results: Transforming the Way Government Implements the Budget 7 D. Empowering Ci zens Through the Budget: Greater Fiscal Openness and Wider Spaces for Engagement 12 E. Consolida ng PFM Reforms Beyond 2016 13 II. FINANCING THE NATIONAL EXPENDITURE PROGRAM 15 A. Macroeconomic Environment 15 B. Na onal Government Fiscal Program 21 III. DIMENSIONS OF THE PROPOSED 2016 NATIONAL BUDGET 30 A. The Budget by Sector 30 B. The Budget by Expense Class 37 C. The Budget by Region 40 D. The Budget by Department and Special Purpose Fund 41 E. Appropria ons for 2016 44 IV. EXPENDITURE PRIORITIES 48 A. Good Governance and An -Corrup on 48 Comba ng Corrup on 48 Streamlining Public Financial Management 49 Op mizing the Delivery of Frontline Services 50 Strengthening Ins tu ons 51 Meaningful Ci zens’ Par cipa on 52 Pursuing Electoral Reform 53 B. Making Growth Inclusive 56 Social Protec on and Social Services 56 Social Protec on 56 Sustainable Livelihood Program 58 Community Driven-Development 59 Social Pension for Indigent Senior Ci zens 59 Supplementary Feeding Program 60 Basic Educa on 61 Hiring More Teachers and Providing Be er Training 62 Basic Educa on Facili es 62 Tools and Equipment Upgrade 63 Textbooks and Instruc onal Materials 63 Assistance for Private Educa on 63 School-Based Feeding Program 64 Universal Health Care 65 Universal Health Insurance 66 Health Facili es Enhancement Program 66 Human Resource for Health Services 67 Family Health and Responsible Paren ng 67 Na onal Immuniza on Program 68 Preven ve and Promo ve Healthcare 68 Early Childhood Care and Development 68 Socialized Housing 70 Socialized Housing 70 Housing for Uniformed Personnel 71 C. Sustaining the Momentum of Growth: Expansion and Job Crea on 74 Transport Infrastructure 74 Road Transport 75 Mass Transport 77 Seaports 78 Air Transport 79 PPP Projects in Transport Infrastructure 79 Agriculture Development 81 Rice Program 82 Corn Program 83 High Value Crops Development Program 83 Coconut Program 83 Livestock and Poultry Program 84 Agriculture Infrastructure and Facili es 84 Fisheries Program 84 Other Assistance to Farmers and Fisherfolk 85 Agrarian Reform 85 Tourism Development 86 Tourism Infrastructure Development 87 Tourism Promo on 88 Manufacturing Resurgence 89 Adequate Infrastructure Support 89 Improving the Business Climate 89 Building Compe veness of Industries 90 Enhancing Support for the MSMEs 90 Human Resource Development 91 Improve Power Security and Facili es 92 D. Climate Change Adapta on and Disaster Risk Build Back Be er 94 Reduc on and Management 94 Mapping and Monitoring Environmental Hazards 99 Ecosystems Management 100 A Climate-Resilient Philippines 101 E. Just and Las ng Peace and the Rule of Law 102 Inves ng in Peace and Development 103 Asser ng Na onal Sovereignty 104 Modernizing Territorial Defense 105 Strengthening Public Safety and Law Enforcement 106 Toward the Swi Delivery of Jus ce 106 Forging Just and Las ng Peace 107 LIST OF TABLES AND FIGURES I. INTRODUCTION AND PRINCIPLES OF THE III. DIMENSIONS OF THE PROPOSED 2016 PROPOSED BUDGET NATIONAL BUDGET Table Table 1 PREXC Pilot Departments 1 Average Na onal Expenditure-to-GDP Ra o of Post-EDSA Administra ons Figure 2 Sectoral Breakdown of the 2016 Budget 1 Fiscal Space, 2009 to 2016 3 Average Share of Social Services, Economic Services, and Debt Burden to Total Budget, II. FINANCING THE NATIONAL EXPENDITURE 1986-2016 PROGRAM 4 Sectoral Breakdown of the 2016 Budget (COFOG) A. Macroeconomic Environment 5 Sectoral Alloca on as % of GDP 6 Subsectors of the General Public Services Table Sector 1 Growth Rate of GDP and its Components, 7 Subsectors of Defense Sector 2004-2015 (First Semester and Full Year) 8 Subsectors of the Public Order and Safety 2 Unemployment and Underemployment Rates, Sector 2004-2015 9 Subsectors of the Economic Aff airs Sector 3 First Semester Poverty Incidence Among 10 Subsectors of the Environmental Protec on Popula on, 2006-2014 Sector 4 Philippine Macroeconomic Indicators, 2010- 11 Subsectors of the Housing and Community 2018 Ameni es Sector 5 Budget Sensi vity to Macroeconomic 12 Subsectors of the Health Sector Parameters, 2016 13 Subsectors of the Recrea on, Culture, and Religion Sector B. Na onal Government Fiscal Program 14 Subsectors of the Educa on Sector 15 Subsectors of the Social Protec on Sector Table 16 Breakdown of the 2016 Budget by Expense 1 Highlights of Fiscal Performance Class 2 Fiscal Aggregates, FYs 2014-2018 17 FY 2016 Infrastructure Budget 3 Revenue Eff ort of Asian Countries, 2009-2014 18 Alloca on By Regionalized and Non- (as % of GDP) Regionalized Budget 4 Breakdown of Revenues, 2014-2018 19 Breakdown of 2016 Budget by Region and 5 Major Reforms Undertaken to Improve Tax Expenditure Per Capita Yields 20 Top Ten Departments 6 Na onal Government Financing, 2014-2016 21 Special Purpose Funds 22 Summary of the Na onal Expenditure Program Figure 23 Unprogrammed Appropria ons 1 Tax Revenue Collec ons, 2004-2014 24 Breakdown of 2016 Off -Budget Accounts By 2 Impact of Proac ve Debt Management Department 3 Outstanding Debt of the Na onal Government, 2004-2014 4 PPP Projects in the Pipeline IV. EXPENDITURE PRIORITIES 17 Treatment of Public Health Diseases and Other Infec ous Diseases A. Good Governance and An -Corrup on 18 Budget for the ECCD Program, DOH 19 Accomplishments of the Socialized Housing Table and Finance Corpora on, 2011-2014 1 Highlights of the Offi ce of the Ombudsman 20 Housing Program for Informal Se ler Families Budget, 2014-2016 Residing in Danger Areas in Metro Manila, 2 Summary of New Projects to be Funded NHA under the MITHI Fund 21 Housing Program for Informal Se ler Families 3 Status of BUB projects, 2013 to 2015 Residing in Danger Areas in Metro Manila, 4 Summary of BUB Projects per Implemen ng SHFC Agency 22 Budget Alloca on for Socialized Housing Projects and Programs Figure 23 NHA Fund Releases for Typhoon Yolanda, 1 How the Philippines fared in the Corrup on 2013-2015 Percep ons Index 2 BUB Alloca ons Per Region (2013 to 2016) Figure 1 DepEd Budget, 2010-2016 B.