Secretary Carlos Dominguez III told senators Wednesday the approval of the P17.3-billion budget of the Department of Finance (DOF) for 2020 will keep it on track in accomplishing its goals of ensuring fiscal stability and further increasing revenue collections to achieve sustainable and inclusive economic growth that will benefit all law-abiding Filipinos.

Next year’s proposed outlays of the Department and its attached agencies will put flesh into the DOF’s fiscal objectives, which were honed to support President Duterte’s priority programs, such as his “Build, Build, Build” infrastructure modernization plan and public investments to improve the lives of the people, Dominguez said.

Dominguez said the P17.29-billion proposed budget of the DOF and its attached agencies is P1.59 billion or 8 percent lower than its 2019 budget of P18.89 billion, which is likewise below the preceding year’s P19.73-billion allocation.

If automatic appropriations, unprogrammed appropriations and budgetary support for government-owned and -controlled corporations (GOCCs) are included, the DOF’s total budget for 2020 amounts to P56 billion, he said during the budget hearing of the Senate finance committee.

The committee, chaired by Sen. Sonny Angara, is currently conducting hearings on the proposed national budget or General Appropriations Act (GAA) for fiscal year 2020. The House of Representatives approved the proposed GAA on third and final reading last Sept. 20.

“Our fiscal objectives were honed to support the administration’s priority programs, such as the massive infrastructure program and public investments to improve the lives of our people. The timely approval of our proposed budget for 2020 will keep us on track in accomplishing these goals,” Dominguez said during the hearing.

Dominguez said the DOF has been at the forefront of the Duterte administration’s reform efforts to modernize taxation; reduce red tape and stamp out corruption; broaden the base of the financial system; adopt new technologies to enhance governance; and negotiate official development assistance (ODA) with the country’s multilateral and bilateral partners to support the cash-intensive “Build, Build, Build” program.

He said “2018 was a banner year for the Department of Finance. The DOF has been engaged in a broad range of reform efforts.”

During the hearing, Dominguez took the opportunity to thank the Congress for passing two game-changing reforms that will help the Duterte administration achieve high growth and financial inclusion for the people—the Tax Reform for Acceleration and Inclusion (TRAIN) Law or Republic Act (RA) No. 10963 and the tobacco tax reform law (RA 11346) that raised excise taxes on cigarettes and other tobacco products.

He pointed out that the TRAIN Law has led to significant increases in the collections of the Bureaus of Internal Revenue (BIR) and of Customs (BOC), which will ensure a sufficient revenue stream for the government’s programs on infrastructure and human capital development.

The higher taxes on cigarettes, meanwhile, will help plug the huge funding gap needed for the full implementation of the Universal Health Care (UHC) program, Dominguez noted.

He expressed confidence that high–and inclusive–growth can be achieved and sustained in the years ahead with further administrative reforms and the completion of the comprehensive tax reform program (CTRP) with the support of the Congress.

The approval of the remaining CTRP packages and passage of other economic reforms, such as the amendments to the Public Services Act, Retail Trade Act and Foreign Investments Act, will secure for the Philippines an “A” credit rating in two years’ time, Dominguez said.

A higher credit rating lets the government and private companies borrow funds abroad at cheaper costs.

“Completing the reform measures will guarantee the revenue flow and the equitable sharing of the contributions to underwrite our social and infrastructure programs. It will also ensure fiscal stability long into the future,” he said.

The DOF’s proposed automatic appropriations of P1.4 billion for 2020, covers retirement and life insurance premiums of P720 million and special accounts in the General Fund of P700 million.

Its unprogrammed appropriations of P211 million include the refund of the service development fee for the Nampedai property in Japan, while the budgetary support to GOCCs includes the P36.4 billion for the cash transfers under the TRAIN, and P97 million for the implementation of the specialized tax training and education management program of the Philippine Tax Academy (PTA).

The budgetary support also covers the P500-million subsidy for the Trade and Investment Development Corp. of the Philippines (TIDCORP) for its capacity to cover additional guarantee volume it has committed to deliver in 2020. This is to address the monitoring by the Bangko Sentral ng Pilipinas (BSP) of capital adequacy and TIDCORP’s liquidity.

Among the DOF-attached agencies, the BIR got the largest allocation of P8.46 billion to further improve the agency’s tax administration and enforcement capabilities.

The BIR’s budget for personnel services rose in 2020, as it plans to increase its filled-up positions from 10,671 this year to 11,448 in 2020.

The agencies with the biggest reduction in the proposed 2020 budget are the Bureau of the Treasury (BTr) and BOC.

BTr’s proposed budget of P4.77 billion for 2020 dropped P1.3 billion or 21 percent compared to its 2019 appropriations of P6.04 billion, as it would be paying this year the final installment of the paid-in capital of the country to the Asian Infrastructure Investment Bank (AIIB).

Its proposed budget also maintained the P2-billion insurance premium for government assets against natural or human-induced calamities, epidemics, crises and catastrophes.

The non-approval of the Medium-Term Information and Communications Technology Harmonization Initiative (MITHI) projects of the BOC under its modernization program led to a 14-percent decrease in its proposed budget for 2020 of P2.26 billion as compared to the bureau’s appropriations this year of P2.62 billion.

For the Office of the Secretary (OSEC), its proposed budget for 2020 of P836.61 million decreased by 1 percent from this year’s P843.33 million.

The budget of the Securities and Exchange Commission (SEC) of P550.68 million decreased by 11 percent from this year’s P618.43 million.

The remaining five DOF-attached agencies have a combined budget plan of P421.44 million, which is only 2 percent of the general appropriations of the proposed 2020 DOF budget.

These agencies are the Bureau of Local Government Finance (BLGF), with P259.48 million; Privatization Management Office (PMO), P81.54 million; National Tax Research Center (NTRC), P62.26 million; Central Board of Assessment and Appeals (CBAA), P18.16 million; and the Insurance Commission (IC), P6,000.

The IC sources its funds for personal services from the retained amount of the fees, charges and other income derived from the regulation of pre-need companies, while its maintenance and other operating expenses (MOOE) comes from its 25-percent share from the premium tax collection of the BIR.

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