| Philippines Analytical Brief | January 24, 2017 Author: Riley Smith |
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2017 Philippines National Budget On December 22, President Rodrigo Duterte signed into law Republic Act 10924, also called the 2017 General Appropriations Act (GAA) for Fiscal Year 2017. The P3.35 trillion (US$67.4 billion) national budget is the highest passed by any administration to date. During his speech accompanying the signing ceremony, Duterte said the budget was “pro-people, pro-investment, pro-growth and pro-development,” and that it embodied “Filipinos’ clamor for change.” Rooted in the administration’s 10-Point Socioeconomic Development Agenda, the budget includes major outlays for departments and agencies that will be tapped to carry out the government’s key economic initiatives. Among these initiatives are a significant increase in infrastructure spending and promoting human capital development by increasing support to education. The Department of Education receives the highest allocation—P544.1 billion (US$11.0 billion)—compared to all other executive departments, while the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr) receive increases of over 18% and 25% from 2016. A further P850 billion (US$17.1 billion) will go to construction of roads, schools, hospitals, and other transport and public works infrastructure. The 2017 also provides significant support for social programs, such as the government’s Conditional Cash Transfer program (Pantawid Pamilyang Pilipino Program, or the 4Ps), which are important to the Duterte administration’s objective to ensure economic growth is more inclusive than under previous administrations. While campaigning, Duterte had said that his three top budget priorities would be agriculture, education, and health. Out of these, only the Department of Education is among the top five agencies receiving the largest allocations in the final budget—the other four being the DPWH, the Department of the Interior and Local Government, the Department of National Defense, and the Department of Social Welfare and Development, which carries out the Conditional Cash Transfer program. The importance of defense and security issues to the administration is evident in increases in budget allocations to both the Philippine National Police (PNP) and the Department of National Defense (DND). While not explicitly spelled out in the administration’s 10-Point Socioeconomic Development Agenda, Duterte’s economic team—which includes Secretary of Finance Carlos Dominguez, Secretary of Socioeconomic Planning Ernesto Pernia, and Secretary of Budget and Management Benjamin Diokno—has consistently maintained that rule of law issues are the foundation of the agenda. Unsurprisingly, the PNP, which carries out Duterte’s controversial violent crackdown on illegal drugs, received a 26% increase in their budget from 2016. Other crime-fighting agencies also saw substantial increases in their budgets from the previous year. For example, the Philippine Drug Enforcement Agency’s budget increased by 92%, while the Office of the President’s confidential and intelligence funds increased by 400%. A portion of the P148 billion (US$2.98 billion) allocated to the Department of the Interior and Local Government (DILG) will also go towards anti-narcotics efforts. Even amid an apparent détente between China and the Philippines, the government is still increasing the DND’s budget by nearly 17% over 2016. The P137.2 billion (US$2.76 billion) in funding will be directed to support territorial defense, other security and stability services, and the Armed Forces of the Philippines Modernization Program. Among the departments that received a cut in funding from 2016 are the Department of Health (DOH) and the Department of Agriculture (DA). At P96.3 billion (US$1.94 billion), DOH’s budget is over 20% less than for 2016, despite the improvement of the healthcare system and the implementation of the Responsible Parenthood and Reproductive Health (RPRH) Law being important parts of the Duterte administration’s 10-Point Socioeconomic Development Agenda. Secretary of Health Paulyn Ubial explained the cut in this year’s DOH budget by saying that the 2016 budget included the PhilHealth subsidy for premium payments for indigent families and senior citizens, while the 2017 budget has it as a separate outlay. When the PhilHealth subsidy is included in the DOH’s 2017 budget, the department’s allocation increases by 19% from 2016. As for the implementation of the RPRH law, parts of which are under a nearly 2-year-old temporary restraining order imposed by the Philippine Supreme Court, Duterte issued an executive order on January 10 to ensure that there will be “‘zero unmet needs for modern family planning’ for all poor households by 2018.” The executive order came after it was revealed that lawmakers opposed to the RPRH had scrapped the P1 billion (US$20 million) that was originally allocated to purchase contraceptives for poor families. The Department of Agriculture’s budget for 2017 is only slightly less than for 2016. However, the budget allocates P38.4 billion (US$772 million) to the National Irrigation Authority so that farmers no longer need to pay irrigation fees. The government also plans to grant crop insurance for 1.3 million subsistence farmers. The following are highlights of the 2017 budget: Budget
Education
Infrastructure
Support for Local Governments
Defense & Security
Social Programs
Healthcare
Agriculture
Macroeconomy
Reactions to the National Budget
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