Budget Challenge: Wise Use, Sustainable Financing

PHILIPPINES - In Brief 08 Jul 2024 by Diwa Guinigundo

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The Executive Branch through the Department of Budget and Management and the cabinet-level Development Budget Coordination Committee (DBCC) will formally submit a budget proposal for P6.352 trillion for 2025 on July 25, a week after the legislature reopens on July 22. Lower House Speaker and Leyte Rep. Ferdinand Martin G Romualdez yesterday announced Congress is set to approve it in three months. Congress will take a break in September. Together with the budget proposal, Congress is expected to deliberate on various priority bills including those proposing amendments to the power law that privatized the industry, extending the lease period for foreign investments, amending the country’s agrarian reform law and modernizing public budgeting and national defense. This budget amount actually was already trimmed from the original P9.2 trillion budget proposal from various government agencies. Due to what the budget department admitted as limited fiscal space, program readiness, absorption capacity of some agencies and funding issues, the budget was brought down to P6.352 billion. Nevertheless, this level still represents more than 10% increase over the current budget. Some market analysts, however, seemed to have missed the point about the proposed significant increase in next year’s budget, equating it with additional push for higher economic growth. As some academics correctly pointed out, the bigger magnitude is no guarantee of any significant gains in economic growth or development. The bottom line is the ability of the Philippine Government to make wise use of the budget to establish more critical infrastructure like power, address the fundamental issues in health and ...