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HIGHLIGHTS OF THE 2018 NATIONAL BUDGET Primer on the Unified Reporting System SARO now online

HIGHLIGHTS OF THE 2018 NATIONAL BUDGET

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Primer on the Unified Reporting System

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pr 19Jan2018 1

Secretary Benjamin Diokno attended the meeting with the Technical Working Group (TWG) on the Pasig River Ferry Convergence Program held in DBM on January 19, 2018. The Pasig River Ferry Convergence Program is identified in the Budget Call as one of the priority programs of the Economic Development Cabinet Cluster.

In his opening remarks, Secretary Diokno said, “We find huge potential in the Pasig River Ferry Service as an alternative mode of transportation for commuters, particularly those coming from the East side of the Metro to reach specific destinations within the cities of Manila, Mandaluyong, Pasig, Taguig, Marikina and Quezon City.”

Per DBM’s initiative, the TWG was set up to ensure the programs and projects of the different agencies involved support one another towards the common of goal of maximizing the use of the river. The restoration of the Ferry Service is expected to help address problems such as traffic, pollution and lack of connectivity among transport systems in National Capital Region.


          The TWG meeting was attended by representatives from DBM, Department of Public Works and Highways, Department of Environment and Natural Resources, Pasig River Rehabilitation Commission, Department of Tourism, Department of Transportation, Department of the Interior and Local Government, National Economic and Development Authority, Laguna Lake Development Authority and Metro Manila Development Authority.

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pr 2017jan18 forum 1

On January 18, 2018, Department of Budget and Management Secretary Benjamin Diokno discussed the Philippine infrastructure plans for 2018 and its financing strategies at the First Global Forum on Infrastructure Strategies held in Sofitel Hotel in Pasay City.

 

In his presentation, he highlighted the ambitious Build Build Build program as one of the top priorities of the Duterte Administration. “We will spend about $160 to $180 billion in public infrastructure for the entire six years of the administration to make up for the government’s under investment in roads, railways, airports, seaports, and other infrastructure facilities,” he said.

 

He also discussed the financing program of the government to usher in the “Golden Age of Infrastructure in the Philippines”.pr 2017jan18 forum 2

 

“For Fiscal Year 2018, infrastructure spending is pegged at PhP1.1 Trillion, equivalent to 6.3% of GDP and is higher by 27.9% compared to the 2017 budget,” Secretary Diokno said.

 

Infrastructure spending will be ramped up, reaching as much as 7.3 percent of GDP in 2022.

 

The government allotted the second largest budget to economic services at PhP 1.154 trillion for a 25% year-on- year increase. The Department of Public Works and Highways (DPWH) and Department of Transportation (DOTr) got some of the biggest increase in the 2018 national budget to help sustain Build Build Build program.

 

“The budget of the DPWH grew by 40.3% from PhP 454.7 Billion in 2017 to PhP 637.9 Billion in 2018. Meanwhile, the budget of the DOTr grew by 24.4%, from PhP 53.3 Billion in 2017 to PhP 66.3 Billion in 2018,” Secretary Diokno said.

 

He also presented two of the major infrastructure projects of the Administration for 2018 - Metro Manila Subway Project and Clark International Airport Expansion Project.

 

The Metro Manila Subway Project, which is expected to start its implementation as early as third quarter of 2018, will be financed through the Japanese Official Development Assistance (ODA).

 

“This project will cost around PhP 355.6 Billion. The DOTr will be working closely with the Japan International Cooperation Agency (JICA) in ensuring that the project will be built with the technology that is at par with the standards of Tokyo-based railway systems,” he added.

 

The PhP9.4 Billion Clark International Airport Expansion Project, on the other hand, involves the construction of a new passenger terminal building to accommodate 8 million passengers annually.

pr 2017jan18 forum 3

Besides his presentation, Secretary Diokno also participated in the panel discussion moderated by Ms. Bhavna Suresh Chathambeth of the Lamudi Philippines, Inc. He was joined by NEDA Undersecretary Rolando Tungpalan, Chief Representative of JICA Philippines Mr. Susumu Ito, ING Bank N.V. Country Manager Mr. Hans Sicat, KMC Savills Mr. Michael McCullough, First Metro Investment Corp. Chairman Mr. Francisco Sebastian and PSE President & Chief Executive Officer Mr. Ramon Monzon in the panel discussion.

 

For more information on the Department of Budget and Management, visit: www.dbm.gov.ph and follow @DBMgovph on Facebook and Twitter.

pr 2017jan17 bwb 1

Department of Budget and Management Secretary Benjamin E. Diokno holds a press briefing in DBM on January 17, 2018.

          

          DBM Secretary Benjamin Diokno categorically stated that he is “not opposed to the increasing the salaries of our teachers” in a press conference this morning at the DBM Central Office.

          “I understand the crucial role teachers have in nation-building and I do believe they should be rewarded accordingly,” he said.

 

Teachers’ Compensation with SSL and TRAIN

          According to the budget chief, the take-home pay of teachers has already increased this year with the implementation of the Third Tranche of Salary Standardization Law (SSL). Furthermore, government personnel, including teachers, may expect another round of salary adjustments with the Fourth Tranche of SSL set to be implemented in 2019.

          Currently, an entry-level public school teacher (Teacher 1), having Salary Grade 11 under Tranche 3 of the SSL, earns a monthly salary of P20,179. Annually, he/she will enjoy bonuses and allowances of P74,358[1]. This rounds up the monthly compensation package of teachers to P26,375. By 2019, their monthly salaries will increase to P20,754 and their total annual bonuses and allowances will increase to P75,5081, rounding up their monthly compensation package to P27,046, or P671 more per month.

          At the same time, the significant reduction in taxes with the lower personal income tax rates imposed by TRAIN will significantly increase the take-home pay of teachers. In fact, a Teacher 1 is tax-exempt under the TRAIN law as his/ her annual taxable income falls below P250,000.  Additional take home pay due to lower taxes for Teacher 1 will amount to P35,537, 176% of his/her monthly salary.

The combined effect of the increase in salary from the SSL and lowered tax rates due to the implementation of TRAIN law will result to an additional take home pay of P43,363 per year. In 2019, annual tax savings will increase to P37,262 as it is indexed to salary. Additional take home pay due to SSL and TRAIN increase to P45,312.

 

Budgetary Impact of Doubling the Salaries of Teachers

          The DBM estimates that doubling the salaries of teachers in 2018 will require an additional P343.7 billion in Personnel Services (PS) costs. In the 2018 GAA, the programmed PS costs for teaching positions is set at P381.1 billion. Doubling the salaries of teachers will require PS costs of about P724.8 billion, implying a financing requirement of P343.7 billion.

The DBM Secretary cited the budgetary impact as the reason behind previous statements in which he cautioned against the doubling of teachers’ salaries. He clarified that the President’s instruction is “to look into increasing their salaries, not doubling them”. “We have to ensure that our public sector deficit remains manageable,” the Budget chief said. “Financing this P343.7 billion may require hiking the deficit from 3% of GDP to 5% of GDP, and it may put at risk the excellent international financial standing the Duterte Administration has built over the past 18 months,” the DBM Secretary said.

“Alternatively, we may raise more taxes or reduce other expenditure items,” Sec. Diokno mentioned. “Raising P343.7 billion is a monumental task,” he said. “Consider that Package 1A of TRAIN is expected to deliver about P90 billion in revenues, yet this is only about one-fourth the amount needed to finance the doubling of salaries of teachers,” the Secretary added.

On the other hand, the DBM Secretary also cautioned against sacrificing spending for other Budget priorities such Build Build Build, Free College Tuition, Marawi Rehabilitation, the Cash Transfer Programs of the government, among other things. “We must think and prioritize long-term solutions for our country’s development and for the people’s general welfare.” Sec. Diokno said.

 

Public School Teachers’ Salaries vs Private Sector

          Secretary Diokno also cited two recent studies done in 2015 and 2016 by Towers Watson as commissioned by the DBM and by Dr. Rosario G. Manasan, respectively. Both studies show that the pay for public school teachers are significantly higher than their private sector counterparts. Towers Watson shows that an entry level teacher makes 46% more than his/her private sector counterpart. Meanwhile, Dr. Manansan found that pay in public schools is much more stable and constant across regions compared to private schools.

At around First Quarter of 2019, the DBM will commission an independent firm to do a benchmarking on the salary of teachers and other government personnel such as doctors, nurses, and lawyers. Based on the results of this study, the DBM will propose the appropriate level of compensation for government workers.

“We recognize the important role of our teachers. However, we would prefer to let the third and fourth tranches of SSL run their course before we propose a new scheme,” the Secretary said.

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[1] amount excludes Performance-Based Bonus (PBB)

 

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pr 12 Jan 2018

The Department of Budget and Management (DBM) hosted the first official meeting of the Participatory Governance Cluster (PGC) of the Cabinet for 2018 on January 11 at the DBM Library.

DBM Secretary Benjamin E. Diokno, as PGC Co-Chair, facilitated the proceedings of the meeting. The meeting, held two months earlier than the Cluster’s prescribed meeting schedule, aimed to flesh out upcoming activities for the development of the expanded PGC Performance and Projects Roadmap (PPR), the blueprint that outlines the key reform programs and initiatives of the Duterte Administration in pursuit of participatory governance.

“We have called this special meeting to present to you some developments and proposals for approval before the roll out of our proposed series of events,” said Sec. Diokno.

During the meeting, he also welcomed the newly appointed Department of the Interior and Local Government (DILG) Officer-in-Charge, Mr. Eduardo Año, as the new PGC Co-Chair.

Said meeting was the second official meeting of the members of the Cluster since it was created by virtue of Executive Order No. 24 entitled, “Reorganizing the Cabinet Clusters System by Integrating Good Governance and Anti-Corruption in the Policy Frameworks of All Clusters and Creating the Infrastructure Cluster and Participatory Governance Cluster,” issued on May 16, 2017.

High-level officials and staff from 12 PGC member agencies attended the meeting to discuss some concerns arising from the first official meeting including, among others, the status of the potential amendment of EO No. 24 to expand the Cluster membership to include other agencies that are directly involved in achieving the goals of the PGC.

At present, PGC member agencies include the DILG as Chair, Office of the Executive Secretary, Office of the Cabinet Secretary (OCS), National Anti-Poverty Commission (NAPC), Presidential Management Staff, Finance (DOF), Department of Trade and Industry (DTI), National Economic and Development Authority (NEDA), Presidential Communications Operations Office (PCOO), Commission on Higher Education (CHED), Presidential Legislative Liaison Office (PLLO), and the DBM as co-Chair and Secretariat.

Director Rolly Toledo of the DBM’s Fiscal Planning and Reforms Bureau (FPRB), which serves as the PGC Secretariat, presented the updates and upcoming activities of the PGC, including the conduct of a survey to map out existing participatory governance efforts under the present Administration. Director Toledo also shared the status of the initiatives of member agencies anchored on the PGC-PPR, with the DBM having been rated with “Good Performance” for its Open Budget Index score and shepherding of the Budget Reform Bill.

Director Toledo also cited the awards and recognition of the Cluster, namely, the Philippines’ recognition as the sole country to meet international standards in extractive industries governance and the DBM as the Freedom of Information (FOI) Champion at the 2017 FOI Awards.

Key policy decisions made from the meeting are the following: 1) creation of an Inter-Agency Working

Group on Citizen Engagement and CSO Accreditation to be led by the NAPC; 2) implementation of the PGC Mapping Survey; and 3) approval of the concept note and roll out of the series of regional dialogues on the crafting of the PGC Roadmap Phase 2.

The next PGC meeting is tentatively set on March 2018 to be chaired by the DILG. 

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