Budget Veto
After trimming the budget from P651 billion to P629 billion, Congress passed RA 8760. However, PresidentEstrada vetoed last 16 February 23 general and special provisions, particularly those budgetary items requiring prior Congressional concurrence. All in all, these provisions cover disbursements of P41.9 billion in public funds leading some to conclude that the pork barrel remains tucked into the budget. The items requiring congressional concurrence were found in the budgets for the Departments of Education, Energy, Health, Public Works and Highways, Trade and Industry, Agriculture, and Interior and Local Government.

Minority members of the House of Representatives threatened to initiate an override of the veto, or they dared to question the constitutionality of the executive veto before the Supreme Court. Despite the removal of the "concurrence" provision, the administration reportedly presented a list of projects – farm-to-market roads, schoolbuildings, irrigation, post-harvest facilities, and electrification – to congressional representatives for their districts. Part of the P50 million allocated to each representative will be taken from the Rural-Urban Development Infrastructure Funds. Some P35 million will be devoted to "hard" infrastructure projects while the remaining P15 million will be set aside for "soft" or livelihood projects and medical services.

Deceptive Cuts
According to Budget and Management (DBM) Secretary Benjamin Diokno, the P22 billion net cut consisted of P50 billion in gross cuts from the budgets of some departments and special purpose funds and some P28.2 billion in addition to the budget of DPWH, DSWD, and the Priority Development Assistance Fund recently created by Congress.

Because of the P101.7 billion fiscal and the P83 billion consolidated public sector deficits posted last year, a total of P7 billion in 'hard' cuts had been taken away from the original budget proposed by the DBM to Congress last year. These were cuts in maintenance and other operating expenses and capital outlays.

Some P15 billion in expenditures had been transferred to the unfunded portion of the budget which amounts to P48.7 billion. These items will be released should revenue performance improve this year. Some P5 billion was sourced from 5% across the board additional cuts in agency budgets. Local authorities have every reason to be agitated since P10 billion in internal revenue had been relegated to the category of soft cuts by Congress. Under the 1987 Constitution (section 6, Article X) and the Local Government Code of 1991 (section 286), local government units are entitled to automatic release of their just share of internal revenue taxes. The executive department, believing in their cause, later committed to release the amount to LGUs. According to DBM, P18.3 billion in foreign assisted project counterpart funds have been included in the unfunded portion of the budget.

Millennium Budget
The P629 billion budget for 2000 is 6% more than the adjusted budget of P593.6 billion for 1999. Projected low-end inflation this year is 6.0%. As a share to projected GNP, the 2000 budget's 18.2% is lower than the 18.9% ratio in 1999. GNP growth is estimated to reach a minimum of 4.5% in 2000. The amount covers only 65% of the P965 billion requested by the agencies from DBM for the fiscal year 2000.

Basic Concerns
According to the DBM, the largest budget allocation goes to the social services sector, particularly on three basic concerns – food, education, and shelter. A special purpose fund consolidates the funding for all programs in the budget related to agricultural and fisheries modernization. This is called the Agricultural Fisheries Modernization Program Fund (AFMA). The funding for Internal Revenue Allotment jumps to P128.6 billion in 2000 from P96.8 billion in 1999. Amidst an outcry over cuts made on the budget of the country's premiere state university, state colleges and universities in general are given greater financial autonomy to be more self-sustaining centers of excellence. Information technology-related programs and projects are supported with some P2.8 billion allocated to the Department of Science and Technology.

Social Services
Social services get P213.7 billion, the largest share of the budget at 34%. This sector also gets the biggest absolute increase of P48.4 billion. Education receives P120.4 billion or 56.3% of the social services share. Around P2.0 billion goes to the schoolbuilding program. Land distribution under the Comprehensive Agrarian Reform Program has P4.7 billion, an 88% rise – the largest yearly increase among social services subsectors. Health services, however, get P14.7 billion, 2.2% less than last year's budget, because this basic service has been devolved to local governments. Allocation to government's priority socialized housing program amounts to P4.7 billion. Finally, the Department of Social Welfare and Development receives P1.6 billion to implement, among others, its centerpiece program, the Comprehensive Integrated Delivery of Social Services.

Economic Services
Economic services follow social services in budget priority with P156.4 billion or a 24.9% budget share. To achieve the goals of agricultural productivity and food security, P30.2 billion is allotted to agriculture, agrarian reform, and natural resources. Under this provision, the AFMA integrates provisions for food security, poverty alleviation, and global competitiveness. The fund's beneficiaries are small- and medium-scale farmers and fishermen. Around 39.5% or P61.8 billion of economic services go to infrastructure (airports, navigation, telecommunication, and land transportation facilities).

General Public Services
General public services receive P116 billion or 18.4% share of the budget. Of this amount, P46.2 billion goes to the Philippine National Police and the MNLF Integration Program of the Department of National Defense.

Salary Adjustments
By expense class, P109.7 billion goes to net lending and interest payments or 17.4% budget share. Outside of the amount reserved to creditors, more than half of the budget is devoted to personal services. In general, new positions will not be created in line with the streamlining effort of the government. In connection with the proposed government reengineering, the passage of a reorganization bill will clearly define areas of mission of the government. Also, no new units, cities, and state colleges and universities should be created this year. Hospitals devolved to the local governments will not be renationalized. To accommodate an average of 10% in salary increases of government personnel throughout the year, Congress added a P13.2 billion Salary Adjustment Fund to the national budget. The remainder of expenses goes to maintenance and other operating expenditures, and capital outlays.

Housing
By recipient unit, the national government receives P389 billion. Budgetary support to LGUs amounts to P119.9 billion (including the Internal Revenue Allotment) from P103.8 billion last year. The Internal Revenue Allotment is a sensitive issue between Congress and the vigilant Union of Local Authorities of the Philippines. Because of the cuts in the Internal Revenue Allotment that trickle to LGUs, they threatened the Senate that they would stage a strike late last year.

Budgetary support to GOCCs (government-owned and controlled corporations) includes priority given to housing agencies – the Home Insurance and Guaranty Corporation, the National Home Mortgage Finance Corporation, and the National Housing Authority. This year's budget, though, does not provide for the proposed Department of Housing, Settlement and Urban Development recommended by the Economic Coordinating Council. The agency's forerunner was the defunct Ministry of Human Settlements. The Housing and Urban Development Coordinating Council is headed by Leonora Vasquez de Jesus. Former HUDCC Chair Karina Constantino David came up with a medium-term plan for housing which was recognized by the World Bank.

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