THE Executive on Monday submitted to the House of Representatives its proposed P5.024-trillion National Expenditure Program (NEP) for 2022. This last budget of the Duterte administration, falling on an election year, will focus on people’s health, including booster vaccines and economic recovery, as the response to the Covid-19 pandemic continues.
With the theme, “Sustaining the Legacy of Real Change for Future Generations,” the 2022 NEP is equivalent to 22.8 percent of gross domestic product (GDP) and is higher by 11.5 percent than this year’s national budget.
In his last budget message to the members of Congress, President Rodrigo Duterte said the proposed P5.024-trillion budget will energize the economy enabling the country to regain consumer and business confidence, as the Philippines pursues a real GDP growth target of 7 to 9 percent for next year.
“To ensure that the 2022 national budget would be an effective impetus to drive us back to a strong and genuine recovery, the crafting of the P5.024-trillion proposed budget is guided by three main pillars: building resilience amidst the pandemic; sustaining the momentum towards recovery; and continuing the legacy of infrastructure development,” he said.
For 2022, the President said the government expects to generate P3.290 trillion in total revenues, representing 14.9 percent of the GDP.
Also, he said the deficit as a share of GDP will reach 7.5 percent next year, lower than the 9.3 percent of GDP program this year.
“Financing requirements will rely mostly on domestic sources, with a borrowing mix of 77:23 to ensure fiscal sustainability, as we gradually bring the deficit back to pre-Covid levels over the medium term,” the President said.
“Notwithstanding the challenges ahead, we still commit to a manageable and sustainable debt-to-GDP ratio over the medium-term. Evidently, despite our debt-to-GDP ratio reaching 54.6 percent last year due to Covid-19 spending and inevitable drop in revenues as a result of the pandemic, our prudent and effective fiscal, debt, and liability management strategies in recent years, as reflected in our historically low deficit and debt-to-GDP ratios, enabled us to afford the temporary deviation and expansion of the deficit from the pre-pandemic program of 3.2 percent of the GDP,” he added.
Duterte, however, admitted that the onslaught of the Covid-19 pandemic has reversed some of his administration’s gains.
“Almost 18 months since the outbreak of the pandemic in our country, the unseen enemy persists to threaten our fragile progress, especially with the emergence of new variants of the virus. This, however, does not deter us from continuing our effective pandemic response focused on vigorously-pursued vaccination programs, among others,” Duterte said in his budget message.
“Today, I present the proposed national budget of P5.024 trillion for 2022. It is the last full-year financial program crafted by my administration—a crucial documents because it is key to our success in the battle against Covid-19 in the coming year,” he added.
Spending priorities
In a statement, the Department of Budget and Management (DBM) said the NEP was carefully crafted to provide the necessary funding requirements to support the country’s resilience against the pandemic, to sustain the trajectory of economic growth, and continue the legacy of infrastructure development.
The agency said the government will continuously support the implementation of the National Health Insurance Program, with a budgetary support of P80.0 billion, to subsidize the health insurance premium of 13.2 million indigent families and 7.3 million senior citizens.
To combat the spread of the Covid-19 virus, the DBM said the intensified rollout of the Prevention, Detection, Isolation, Treatment and Reintegration (PDITR) strategy will be prioritized through the procurement of 758,700 complete sets of personal protective equipment (P819 million) and 11 million GeneXpert cartridges (P5.1 billion).
The DBM said about P45.4 billion is also provided under the proposed FY 2022 Unprogrammed Appropriations to cover the Covid-19 booster shots of 93.798 million fully vaccinated Filipinos.
Meanwhile, it said P17 billion will also be allotted for the continuous hiring and deployment of health service professionals through the Human Resources for Health Program.
On the other hand, to further strengthen the capacity of the health-care sector and improve medical infrastructure, the department said P19.6 billion is allocated for the construction and upgrading of health facilities and purchase of medical equipment and ambulances under the Health Facilities Enhancement Program.
Of this amount, it added P1.4 billion will cover the requirements for newly established government hospitals; and P106 million, to ensure the efficient health facility referral system of the One Hospital Command Center.
DBM said government will continuously invest in medical research and development (R&D) by allocating P1.3 billion to support the Covid-19 R&D efforts of the Department of Science and Technology. This includes P983 million allotted to set up the Virology Science and Technology Institute of the Philippines and P140.0 million for the conduct of biosurveillance and immune-biosurveillance of Covid-19 variants under the Philippine Genomic Information and Resource Hub.
Recovery
Recognizing of the community quarantine measures on the most vulnerable groups of the country, the DBM said the national government packaged the 2022 NEP to provide essential funding support to foster socioeconomic recovery.
To help displaced workers affected by the pandemic, P21 billion was allotted for the Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) Program of the DOLE.
Meanwhile, budgetary support will also be provided under the Emergency Repatriation Program (P11.2 billion) and Reintegration Services Program (P52.7 million) to assist our repatriated OFWs.
Social protection programs of the DSWD such as the Pantawid Pamilyang Pilipino Program (P115.7 billion), Protective Services for Individuals and Families in Difficult Circumstances (P18.0 billion) and Sustainable Livelihood Program (P4.9 billion) will safeguard the poor and the vulnerable, the DBM said.
In education, P49.7 billion is allocated for the programs of the CHED and Tesda under the Universal Access to Quality Tertiary Education Act. The government has also provided budgetary support for the DepEd’s banner programs, such as the Basic Education Learning Continuity Plan (P15.1 billion) to cover the development, reproduction, and delivery of 924 million learning modules, and the Computerization Program (P11.6 billion) to cover the procurement of 108,177 packages of ICT-related equipment.
The DBM said the National Irrigation Administration’s irrigation services and DA’s National Rice Program will be allocated with P21.8 billion and P15.7 billion, respectively.
Infra development
To boost economic recovery and provide a modernized public transport system, the government will continuously invest in the Build, Build, Build Program.
Of the 2022 NEP, P1.180 trillion is provided for infrastructure.
“This is equivalent to 5.3 percent of GDP and shall be allocated for the major programs of the DPWH and DOTr, such as the Network Development Program [P128.1 billion], Flood Management Program [P113.5 billion], Rail Transport [P110.9 billion] and Land Public Transportation Program [P13.9 billion],” DBM said.
By class
The DBM said bulk of the budget, in the amount of P1.456 trillion or 29.0 percent of the FY 2022 NEP, will go to Personnel Services expenditures for the hiring of health-care workers and teaching personnel, the implementation of the third tranche of the Salary Standardization Law V, and the requirements of the 2018 Military and Uniformed Personnel pension arrears, among others.
Capital Outlays are pegged at P939.8 billion while Maintenance and Other Operating Expenditures will reach P777.9 billion next year, it said.
The agency added the debt burden amounts to P541.3 billion, which corners 10.8 percent of the 2022 NEP and is lower by 3.4 percent year-on-year.
It said the support to government-owned and -controlled corporations, composed of national government subsidies and equity, sums up to P178.0 billion while tax expenditures remain the same with this year’s level at P14.5 billion.
The DBM also said the allocation to local government units (LGUs) will amount to P1.116 trillion. This includes the P959-billion National Tax Allotment share of LGUs, consistent with the Supreme Court ruling on the Mandanas-Garcia case.
By sector
The Social Services sector will still receive the biggest chunk of the 2022 NEP with P1.922 trillion, higher by 15.2 percent than this year’s allocation.
According to the DBM, this will fund health-related services such as the continued implementation of the Universal Health Care Act, purchase of Covid-19 vaccines, procurement of personal protective equipment, and others. Education-related programs, including the implementation of the Universal Access to Quality Tertiary Education, will also be prioritized.
Next is the Economic Services sector, which gets P1.474 trillion or 29.3 percent of the proposed budget, the DBM said. This inched up by 11.4 percent compared to the FY 2021 budget and will largely support flagship programs under the Build, Build, Build Program.
Meanwhile, the General Public Services sector is allocated with P862.7 billion (17.2 percent), the Debt Burden with P541.3 billion (10.8 percent), and the Defense sector with P224.4 billion (4.5 percent).
Top 10
The DBM said the education sector covering the Department of Education (DepEd), State Universities and Colleges and the Commission on Higher Education (CHED), shall receive the highest allocation with P773.6 billion, higher by P21.9 billion or 2.9 percent than its share from the 2021 budget.
This is followed by the Department of Public Works and Highways (DPWH) with P686.1 billion, Department of the Interior and Local Government with P250.4 billion, Department of Health and the Philippine Health Insurance Corporation with P242.0 billion, Department of National Defense with P222.0 billion, Department of Social Welfare and Development (DSWD) with P191.4 billion, Department of Transportation (DOTr) with P151.3 billion, Department of Agriculture (DA) and National Irrigation Authority (NIA) with P103.5 billion, The Judiciary with P45.0 billion, and the Department of Labor and Employment (DOLE) with P44.9 billion.
The total budget of the top 10 departments amounts to P2.71 trillion and comprises 53.9 percent of the FY 2022 NEP.