At no point in our recent history has the annual budget assumed a greater primacy than it has today as the world is buffeted by the following international developments of crisis proportions:

• Continuing escalation of the prices of food and other basic commodities.
• Fluctuating price of fuel at high levels.
• The Wall Street financial market fiasco.
• And possibly an even worse calamity, the rejection by the US House of Representatives of the US $700 billion bailout plan, even as it is reported today that the US Senate has approved the bailout plan which would necessitate further bicameral Congressional action.

No country is insulated from the ill-effects of these triple “F” crises on food, fuel and the financial market.

As these economic and financial tsunamis have worldwide repercussions reaching Philippine shores, the Philippines is just a mere spectator in the gallery of this global turmoil.

While we do not cause these upheavals, neither can we offer redress.

Our role is limited to mitigating the adverse effects of these crises to shield our people, particularly the marginalized and disadvantaged. We can only offer buffers and safety nets.

Perforce, we must play and deliver this role to the hilt.

It is most opportune that we are still in the process of crafting and approving the 2009 General Appropriations Bill (GAB). We must succeed in formulating the annual budget as a proactive response on behalf of our people and our institutions, without being bound to a rigid calendar requiring the GAB’s approval with undue alacrity and haste.

We must mold the budget measure in the furnace of confrontation and debate because this House is a deliberative assembly. We must, however, not hold it hostage to irrelevant interpellations, dilatory maneuvers, vain grandstanding and myopic parochial concerns.

We must all be aware that the General Appropriations Bill is not a mere compendium of budgetary allocations. It is, more importantly, a document of policy directions.

When the President of the Republic submitted on 26 August 2008 to the House of Representatives the National Expenditure Program (NEP) or the President’s annual budget proposal, which is principally and traditionally incorporated in the budget bill (this time House Bill No. 5116) as the basis for our deliberations and debates on second reading, the financial market crisis in the Untied States and its immediate impact and medium as well as long-term complications, have not been anticipated and, therefore, not addressed.

When the alarming, even crippling, developments in the US financial market started to unfold on 15 September 2008, the country’s economic advisers in the Development Budget Coordinating Committee (DBCC), namely – the Budget Secretary, the Finance Secretary and the NEDA Director-General together with the Governor of the Bangko Sentral ng Pilipinas (BSP) had already briefed the Committee on Appropriations on 03 September 2008 or 12 days earlier, regarding the macroeconomic assumptions and parameters of the proposed National Expenditure Program for 2009.

On 17 September 2008 when the US Federal Reserve announced that it will lend the American International Group (AIG) up to US $85 billion in emergency funds, the various department and agency briefings to the Committee on Appropriations had already ended, except for the briefing by the Department of Public Works and Highways which was terminated the following day, 18 September 2008.

Ideally before we start the interpellations and debates on the respective proposed budgets of the various departments and agencies, we must, perforce, call back the members of the DBCC together with the BSP Governor to brief us candidly and extensively on the immediate impact and the medium as well as long-term implications to the Philippine economy of the Wall Street financial market fiasco, in conjunction with our debates on the general principles and provisions.

Mr. Speaker, for this purpose, I strongly suggest that the leadership of the House and the Committee on Appropriations consider very seriously transforming the House of Representatives into a Committee of the Whole so that Members of this Chamber can directly ask searching questions to the country’s economic managers and secure from them the necessary and relevant information and empirically-based projections.

This process assures that the General Appropriations Bill would be truly responsive to and supportive of our people’s needs and interests in this critical time.

We must not hesitate to cut to the bone overstated budget proposals. We must reduce allocations which are not implementable during the incoming fiscal year. We must not reward non-performing agencies and those whose absorptive capacities are below par. Only by doing these can we create a pool of resources which we can realign to augment further basic services and infrastructure development.

In connection with our responses to the triple “F” crisis on food, fuel and the financial market, I wish to reiterate what I have been saying since the 8th Congress or for two decades now that we cannot bail out our country from the economic doldrums if we are unable to successfully confront and solve two ballooning problems: the inordinately huge debt service which devours an enormous portion of the annual budget, and a rapidly growing population which virtually makes the yearly appropriations meaningless because of the multitude of beneficiaries sharing finite resources.

Mr. Speaker. I also strongly recommend that we reiterate the special provision in the 2008 General Appropriations Act prohibiting the Executive from paying the interests for fraudulent, wasteful and/or odious loans like the Austrian loan on medical waste incinerators which have been found indubitably as substandard from the very start and whose utilization has been subsequently banned under the Clean Air Act.

We must even extend the injunction to the payment of principal amortizations for such loans.

The country’s debt service for foreign loans alone as outlaid in the President’s 2009 National Expenditure Program is P111.543 billion, while the off-budget payment through automatic appropriation for principal amortizations on foreign loans amounts to P88.835 billion, or a combined total of P200.378 billion, which is 14.16% of the P1.415 trillion proposed annual budget and P12.660 billion more than this year’s total outlay. These figures do not include the bigger amounts to service domestic loans.

In this connection, the leadership of the House must also prioritize the passage of Joint Resolution No. 04 creating a Congressional Commission to audit the procurement, utilization and repayment of all loans and House Bill No. 329 together with allied proposals to repeal the automatic appropriations for debt service as provided for in the Revised Administrative Code as a copycat of PD 1177.

We must recapture this Chamber’s constitutional power over the purse which has long been derogated.

The problem of the Philippine government in responding to crisis situations is made extremely arduous, complicated and compounded because of a burgeoning population of 88.4 million Filipinos today.

We are obligated to serve and save the teeming multitude so much so that the per capita budgetary support for each Filipino becomes grossly minimal.

For example, in the proposed 2009 annual budget of P1.415 trillion in total obligations, the amount of P768.405 billion or 54.3% represents the non-productive portion of the budget which does not accrue to the general public consisting of (a) debt service interest payment of P302.650 billion; (b) personal services of P429.727 billion; (c) P12.157 billion net lending; and (d) P23.871 billion for other mandatories. Consequently, the real productive budget only totals to P646.595 billion or only 45.7% of the obligation budget.

If we divide the total productive budget of P646.595 billion by 88.4 million Filipinos, the annual per capita budgetary allocation is P7,314.42 annually or a miniscule P20.04 daily per Filipino. This cannot even buy the cheapest kilo of NFA rice or much more a liter of diesel.

Our people’s share in the budget pie will correspondingly become bigger if we are able to mitigate further the population growth rate.

Verily, the Congress of the Philippines , more particularly the House of Representatives, must directly confront and adequately address in the General Appropriations Bill the twin problems of a huge debt service and an expanding population as positive and clear responses to the triple “F” crises on food, fuel and the financial market.

Thank you, Mr. Speaker. Thank you, distinguished colleagues.