a Daan sa Kasaganaan: Walang Iniiwanan Room 140 Alumni Center Building Magsaysay Ave., University of the Philippines Diliman, Quezon City Telefax : +632 4366054 E-mail : [email protected] Website : www. socialwatchphilippines.org FOREWORD III “Daan sa Kasaganaan: Walang Iniiwanan” There are two worlds that exist in the Philippines. One is of prosperity; a world where life is filled with possibilities. In this world, there is wealth that goes around providing for the needs and wants of the people who have it. People can sleep at night without thoughts of hunger, or thirst, or the sun or rain that can tear down their homes. This is a world where people are not afraid to dream big. This is a world where hope never dies. The other world is the simply the opposite. Here, hunger is cruel and it claws at your belly at night when the wind is cold and wet. The mornings are hot as you try to sleep under a bridge. The sound of horns and the rumble of heavy wheels on concrete vibrate in your bones and in your heart. And you are always hungry. You are at the margins… at the extremes of poverty and hunger. We live in a country that is divided in many ways- from the disparities in wealth, to the degree of social protection we enjoy, to the possibilities and dreams we allow ourselves to have. Even with the country’s extraordinary growth in the past year, with the 7.5% increase in our Gross Domestic Product, poverty, hunger and unemployment continue to rise. And these are confirmed by government and independent studies. The Alternative Budget Initiative (ABI) is an effort that began in 2006 basically pushing for a national agenda that aims to create a country where disparities are less and prosperity is more inclusive. On its eighth publication, the ABI Orange Book has, at its core, the theme “Daan sa Kasaganaan: Walang Iniiwanan”, where the national budget can be made to become the instrument to redistribute wealth and catalyze development. It is through this that we call for greater inclusiveness in national growth, where nobody gets left behind. Our engagement with Congress was met with much appreciation and optimism, as Congress promised to incorporate ABI’s proposals in crafting next year’s budget. The proposals for next year aim for proper redistribution of wealth through the abolition of all lump sum appropriations and their realignment to frontline agencies; greater scrutiny on Automatic Appropriations; and the integration of Off Budget items to the General Appropriations Act. We also call for the abolition of the Special Purpose Funds, which has no constitutional basis and which the infamous “pork barrel” or Priority Development Assistance Fund is a part of. We also call on Congress to insist on the implementation of Section 86 of the proposed General Appropriations Act, on the submission of quarterly reports on the utilization of the SPFs and other lump sum expenditures. A mechanism to get Commission on Audit reports on Intelligence Funds in confidence or in Executive sessions must also be present for accountability in the spending of these funds. Through the years, Social Watch Philippines and the ABI’s clusters on health, education, social protection, environment and agriculture, have worked hard and will continue to work hard to bridge the gaps that currently divide this nation. We have looked through heavy budget documents and the fine prints; we have gone to the grassroots, made studies and have written our proposals and our stories. We know all too well that ABI-Orange Book is hardly the final answer to our country’s problems. But it is a publication that is filled with hope and one that aims to fill others with the hope that solutions do exist…we just need to focus on what is key and work hard on it. Through the Orange Book, we continue to engage the government and the people to do what must be done so that we may achieve a Philippines that is just, fair, safe and rid of corruption… a Philippines where all Filipinos are able to live a decent life with pride and dignity. To those who were left behind or felt that they were and are being left behind, this book is dedicated to you. PROF. LEONOR MAGTOLIS BRIONES Lead Convenor, Social Watch Philippines Daan sa Kasaganaan: Walang Iniiwanan TABLE OF CONTENTS V Foreword .................................................................................................................................................. III PART 1. Macroeconomic and Social Development Context of the 2014 Budget The 2014 National Budget, “Paggugol na Matuwid: Tungo sa Kasaganaan”: Is Government Prepared to Engage in an Honest and Credible Fiscal Administration? ............................ 1 A. State of Poverty in the Philippines ........................................................................................................ 1 a. Official Poverty Statistics ........................................................................................................... 1 b. Self-Rated Poverty ..................................................................................................................... 3 B. Economic Performance ......................................................................................................................... 5 a. Income Distribution ................................................................................................................... 5 b. Employment, Unemployment and Underemployment .............................................................. 5 c. Economic Sector Performance .................................................................................................. 8 C. Overview of Macroeconomic Assumptions ......................................................................................... 9 D. Importance of the National Budget and the Role of Congress in National Development .................... 9 E Analysis of the Proposed 2014 National Budget in Comparison with the 2012 and 2013 Budgets ... 10 a. Fiscal Program ......................................................................................................................... 10 b. 2014 National Expenditure Program ....................................................................................... 11 c. Sectoral Distribution ................................................................................................................ 12 d. Allocation by Department ....................................................................................................... 13 e. Allocation by Object of Expenditures ..................................................................................... 14 f. Regional Allocation .................................................................................................................. 14 g. Special Purpose Funds ............................................................................................................ 15 h. Unprogrammed Funds ............................................................................................................. 16 i. Automatic Appropriations ........................................................................................................ 17 F. Revenue and Borrowing Program ........................................................................................................ 18 a. Revenue Program .................................................................................................................... 18 b. Financing/Borrowing Program ................................................................................................ 18 c. Government Debt Service ....................................................................................................... 19 G. Summary ............................................................................................................................................. 20 a. Comparison of Agency Budgets, Special Purpose Funds, Unprogrammed Funds and Automatic Appropriations ...................................................................................................... 20 b. Congress’ Power of the Purse versus the Executive’s Power over the Treasury ..................... 20 c. Lump Sum Appropriations Must be Reformed or Abolished .................................................. 22 H. Conclusion: Two Worlds in a Planet ........................................................................................... 22 a. Social Watch and Alternative Budget Initiative (ABI) Campaign ........................................... 22 References ................................................................................................................................................ 24 Daan sa Kasaganaan: Walang Iniiwanan VI TABLE OF CONTENTS PART 2: Alternative Budget for Fiscal Year (FY) 2014 A. The Alternative Budget Initiative Proposals • Agriculture: Promoting Inclusive Growth and Ensuring Resilient Rural Communities ............25 • Education: Getting All Learners Up to Speed in the Race to 2015 ........................................... 31 • Environment: Investing in Resiliency and Adaptive Capacities: Are We There Yet? .............. 43 • Persons with Disabilities: Towards Inclusive Public Spending for Persons with Disabilities ........................................................................................................... 55 • Social Protection: Broadening Commitment to Social Protection: Balancing Budget Allocations for Other Vulnerable and Marginalized Sectors ....................................................