2005 budget now reenacted

With the failure of Congress to enact the proposed P1-trillion 2006 national budget, the government is now operating on the basis of the much lower P907-billion 2005 outlay.

It will take the Senate and the House of Representatives at least three months to finish tackling this year’s spending bill. The two chambers will resume their sessions on Jan. 16.

The House committee on appropriations, chaired by Rep. Rolando Andaya Jr. of Camarines Sur, is still scrutinizing the 2006 budget proposal. To expedite the budget enactment process, the Senate has started parallel hearings.

Andaya has assured the more than one million government workers that they would get the eight percent increase in their monthly allowance in March or April, when lawmakers expect to enact the budget.

He said the adjustment would be retroactive to the beginning of the year.

That is one of the downsides of the failure of Congress to approve the 2006 budget, though the legislature can pass a special appropriations bill providing funds for the small increase in the allowance of government workers.

Some senators don’t want the higher 2006 budget approved and are proposing that the government continue to run on last year’s outlay, which is about P100 billion lower than the spending bill President Arroyo had proposed for this year.

They hold the view that with the government operating on the 2005 budget, it would be able to drastically bring down the annual P200-billion financing deficit, if not wipe it out.

They estimated than with a budget of P907 billion and increased revenues due to the imposition of the expanded value added tax, the financing gap could be reduced by more than half.

The proponents of a reenacted budget argued that much of the increase in the national outlay could anyway be lost to corrupt officials and personnel.

Besides keeping the budget deficit down, the reenactment of this year’s outlay could prevent senators and congressmen from increasing their priority development assistance fund allocations. The PDFA is a euphemism for the congressional pork barrel.

Last year, because the government was supposed to be observing austerity measures, the pork barren allocation was cut to P40 million to each of the 236 House members and P120 million to each senator.

Senate President Franklin Drilon and opposition Senators Panfilo "Ping" Lacson and Alfredo Lim had given up their allocations. In the case of Lacson, it was the fourth year that he had not been touching his pork barrel. He deducts it from the national budget before the outlay is approved.

There are moves in the House to restore PDAF allocations to P70 million for each House member and P200 million for each senator. The proposed restoration would require an additional P9 billion. Congressmen argue that it’s time they reaped the benefits of the expanded value-added tax law that made life more difficult for the people.