How will government fund the 2018 budget?
MANILA, Philippines – The proposed 2018 national budget is one step closer to being passed by the House of Representatives, as plenary debates began Monday, September 4.
For 2018, the national government is proposing a budget of P3.767 trillion – an amount 12.4% higher than the 2017 national budget and and is 21.6% of the gross domestic product (GDP). (READ: For Dutertenomics to work, the President has to take charge)
In a sponsorship speech at the opening of the plenary debates on Monday, Davao City 1st District Representative Karlo Nograles, chairman of the committee on appropriations, echoed the administration line that House Bill 6215 is a “budget that reforms and transform.”
But where will government gets this huge budget from?
According to the appropriations committee, the following will be the funding sources of the proposed budget:
TAX, NON-TAX INCOME
The 2018 budget will be sourced from some P2.84 trillion in target revenue collections in 2018 or 16.3% of the projected GDP. Over P2.67 trillion will come from tax revenues and P166.8 billion from non-tax revenues.
The prospective fund sources are broken down as follows:
- P2.67 trillion from tax revenues
- P2.005 trillion from the Bureau of Internal Revenue
- P637.1 billion from the Bureau of Customs
- P29.6 billion from other agencies
- P166.8 billion from fees and charges from other agencies, income from Treasury operations, and another non-tax revenues
- P2 billion from privatization proceeds
The Philippine government will be borrowing P888.23 billion from “domestic and foreign sources” to finance the deficit in the budget. The appropriations committee says over 80% will come from domestic borrowings and the rest will be from foreign sources.
According to a Philippine Star report, the projected value of loans for 2018 is 22.05% higher than the P727.74 billion in the 2017 budget. Even if more will be borrowed from domestic sources, foreign loans will rise by over 72.1%, according to the same report.
The government will also be relying more on loans than bond issuances when it comes to foreign sources.
Nograles said the proposed budget “follows credible and disciplined fiscal policy” – the government will only take on loans “to invest and not to fund current, non-productive spending.”
The Davao City legislator, who recently moved to President Duterte’s PDP-Laban, said the budget would focus on “equitable progress and social order.” I would also be “reflective of our policies.” This is the first budget wholly attributable to the Duterte administration.
The 2017 budget was used by the Duterte administration but was crafted by the previous administration.
The administration also aims to “enhance” its relationship with local government units, Nograles said in his sponsorship speech.
Nograles said the 2018 budget would put an emphasis on “accountability and transparency” by stipulating that it is valid for only one year.
“We will do away with the two-year lifespan,” said Nograles during the interpellation for the Department of Budget and Management (DBM) budget.
It’s not the first time that the DBM has attempted to impose a one-year lifespan on the budget.
Nograles, in defending the DBM budget, pointed out that the previous administration had recurring underspending problems, resulting in the eventual reversion of funds to the treasury after they were left unspent.
“This will ensure fiscal discipline,” said Nograles.
Read the priorities in the 2018 budget, as outlined by Nograles in his speech:
The House committee on appropriations expects to finish plenary debates on the budget by September 8, after which it will be transmitted to the Senate. Barring any hitches, Congress expects the 2018 budget to be signed into law by Duterte by November 15. – Rappler.com