Secretary of Finance
July 30, 2024
Magandang umaga po.
Maraming salamat po sa pagkakataong inyong ibinigay sa amin upang linawin – at ituwid ang mga haka-haka – na nagdudulot ng maraming maling akala sa paksang ito.
It is good that clarifications will be done in this institution because the legal authorization that is at the root of this matter emanates from here.
As a compliant agency, we in the DOF hope that at the end of this meeting, you can offer guidance on how to move forward.
But first, allow me to correct some of the inaccurate information orbiting our social media universe.
Una, sinasabi nila na “ilegal ang hakbangin ng DOF sa pagkolekta ng mga natutulog na pera ng GOCCs, partikular na ang PhilHealth.”
Hindi po ito ilegal. Ito po ay naaayon sa batas na Republic Act No. 11975, o ang General Appropriations Act 2024. Tumatalima lang kami sa batas na pinagtibay ninyo.
At hindi automatic naming in-implement ito dahil binusisi muna namin kung may merit ang kautusan.
Dumaan muna ito sa masusing pag-repaso ng DOF para malaman kung makakatulong nga ba ito sa paglago ng ekonomiya.
Kung ito ay legal ba, nakipag-ugnayan rin kami sa GCG at sa abogado ng mga GOCCs–ang OGCC. At mayroon kaming nakalap na mga pabor na legal opinion galing sa OGCC at COA.
Kami ay naabisuhan na hindi kasama ang subject PhilHealth remittance sa mga pondong ipinagbabawal na gamitin ng gobyerno ayon sa Universal Health Care Act.
Ito ang payong legal na aming sinusunod. At hindi lamang ito legal, ito’y makakatulong sa paglago ng ekonomiya at pagbibigay ng trabaho.
Pangalawa, ilalagay daw “ang mga pondong nakalap sa Maharlika Investment Fund”.
Hindi po. Walang kinalaman ang MIF sa paggagamitang pondo ng mga GOCCs.
Pangatlo, sabi rin nila na “kailangang ibalik ang P90 billion pisong nakuha sa PhilHealth, at now na.”
P20 billion pesos pa lang nga po ang remitted ng PhilHealth sa Treasury. Nirerespeto namin ang cash management operations ng PhilHealth. Kaya’t mayroon po tayong remittance schedule. Hindi ito one time big time.
Pang-apat, may akusasyon na “dahil dito, simot ang pera ng PhilHealth. Magiging bangkarote ito.”
Hindi po. May natitirang P500 billion benefit chest fund ang PhilHealth. Ayon mismo sa kanila, labis-labis at kasyang-kasya ito sa mga bayarin para sa multi-year claims. Patuloy rin na tatanggap ng subsidiya ang PhilHealth mula sa pamahalaan.
Pang-lima, kumakalat din na “babawasan nito ang mga benepisyong makukuha mo sa PhilHealth kung ika’y magkakasakit.”
Hindi po. PhilHealth na mismo ang nagsabi na ni isang kusing, walang kaltas sa mga benepisyong matatanggap, batay sa kasalukuyang patakaran.
Bagkus, nabanggit pa nga ng Pangulo sa kanyang SONA na tataasan ang mga benepisyo ng PhilHealth para sa mga outpatient, mga may malulubhang karamdaman gaya ng cancer, at mga batang may kapansanan.
Pang-anim, sabi nila “mga kontribusyon ng members ng PhilHealth ang kinuha”.
Hindi po gagalawin ang kontribusyon ng mga miyembro ng PhilHealth.
Sapagkat ang pondo ay mula sa sobra at hindi nagagamit na mga subsidiya ng pamahalaan.
Pampito, sabi rin nila “walang health-related project ang mapupuntahan ng mga PhilHealth funds.”
Muli, hindi po totoo ‘yan. ‘Yung unang P20 billion ay ipinangtustos sa pagbayad ng utang na Covid allowances sa mga frontliners. Magkano po ito? P27.5 billion. Ilan po ang claims? 5.04 million.
Syanga pala, P121.3 billion na ang nabayaran ng national government para sa ating mga frontliners. Nagpapasalamat po kami sa lahat ng kanilang serbisyo noong pandemic. At ayon sa DBM, wala na pong utang ang gobyerno sa ating mga frontliners.
Pang-walo, kinakalat rin na “walang menu, nakatago, at discretionary ang mapupuntahan ng mga GOCC remittances.”
Kung ano po ang listahan sa Unprogrammed Appropriations, na akda ng Kongreso, doon lang po maaaring dalhin ang pondo — walang labis, walang kulang.
Mahirap pong malusutan ang DBM dito. Hindi pwedeng lumabag sa GAA, ang bibliya ng gastusin.
Ito po ang listahan ng mga proyekto at programang popondahan sa unprogrammed appropriations. Ilan dito ay ang:
– Davao City By-Pass Construction Project
– Samal Island Davao City Connector Project
– Panay-Guimaras-Negros Island Bridges
– Bataan-Cavite Interlink Bridge Project
– Metro Manila Subway Project
– Salary Standardization 6 na may halagang P40 bilyon para sa empleyado ng pamahalaan
Makikita niyo sa screen ang kompletong listahan ng mga proyekto at programa.
Karamihan po dito ay Official Development Assistance o foreign assisted projects, under which we are committed to honor our financing obligations, or failing to do so, pay commitment fees and interests on the loans.
While these projects have been shelved aside to the Unprogrammed Appropriations column, these are vital projects that have to be funded. These are not just the President’s projects, but the people’s projects as well.
Our cost-benefit analysis shows that the projects to be funded by the Unprogrammed Appropriations–na utos ng Kongreso–will hike real GDP growth by 0.7%, increase an additional P23-24.4 billion in revenues, and create hundreds of thousands of jobs.
These will help us hit faster our target of 6% to 7% growth rate for the year. And they are more so needed now after Typhoon Carina ravaged Metro Manila, our economic powerhouse that comprises 31% of our GDP.
The flip side is that if we deny them of funding, the implementation is delayed, and we rack up opportunity costs that will be borne by the public deprived of the conveniences such projects bring.
For instance, if we were to fund these projects with additional borrowings, it would increase our deficit ratio from 5.6% to 6.4% in 2024. Our debt ratio will also rise from 60.6% to 61.4% this year. Magbabayad tayo ng karagdagang P12.7 billion na interest payments kada taon.
In effect, we will not hit our Medium-Term Fiscal Program. And this may put pressure on our investment grade rating.
A credit rating downgrade will increase our borrowing rates by around one full percentage point. This translates to additional interest payments of at least P15 billion pesos annually.
A downgrade will also generate significant uncertainties that may destabilize our macroeconomic environment and jeopardize the Philippines’ recovery efforts from the pandemic.
Tandaan po ninyo, nagsisimula pa lamang tayong bumangon mula sa pandemya, kung saan naranasan natin ang pinakamalubhang pagbagsak ng ekonomiya simula noong inilabas ang GDP data noong 1947 matapos ang World War II.
Before I discuss this issue further, I think it would be wise to explain the context within which these policy moves are being undertaken. The big picture so to speak.
For this year, based on the GAA, we have appropriations of P5.768 trillion.
Of which, only P4.273 trillion are supportable by revenues.
Thus, reckoned on a daily basis, our expenditures amount to P15.8 billion a day, of which P11.71 billion will be financed by revenue collections, and the rest, P4.10 billion, by loans.
Every 24 hours. Kada bente-kwatro oras.
The national budget is a catalogue of expenditures, every item therein has a price tag –- paid in taxes, or by debt.
Our role in the DOF is to pick the tab of what the budget has ordered. Kung kulang, we pay in credit.
And we are wary not to max out the national Philippine credit card.
So against the Herculean task of funding our gargantuan budget, excuse me for employing some appropriate hyperbole here, we have to scout for resources without inflicting new taxes on the present or bequeathing debts to be paid by the future generations.
That is why in 2024, the DOF hiked dividend rates to 75% from 50% of GOCCs’ annual net earnings, which is now our major source of non-tax revenues.
This is pursuant to Republic Act 7656 or the GOCC Dividend Law.
Minabuti rin naming i-recalibrate ang priority revenue measures ng DOF upang hindi ito makadagdag sa pasanin ng mga mamayan. In your docket of pending bills are more taxpayer-friendly and refined versions.
Even in the absence of such, our main revenue agencies have stepped up with higher collection performances.
For the first half of the year, the BIR collections grew double-digit or 11.7% to P1.36 trillion.
The BOC also posted a 5.1% growth in collections, reaching P455.5 billion.
Meanwhile, non-tax revenues recorded a 63.3% increase, totaling P314.2 billion.
We are on track to meet our fiscal program in 2024, as we are already halfway through our targets.
To fund the unprogrammed appropriations, Congress determined that there is another way aside from new taxes as well as debts.
At ito ay sa pamamagitan ng pagkolekta sa mga natutulog at hindi nagagamit na pera ng GOCCs na binabayaran pa natin ng interest. Ito po ay mismong nakagalay sa 2024 GAA na aming sinusunod lamang.
Halimbawa, yung P90 billion sa PhilHealth, binabayaran iyan ng taxpayers ng P5 billion na interest habang natutulog.
So perhaps, moving forward as we discuss NEP 2025, we ask Congress to help us, in the executive branch, to carefully choose projects in the budget that create the most economic growth and more jobs.
But please curate the expenditure program without inflating the unprogrammed appropriations side, because this distorts the country’s fiscal plan.
Let us operate within the parameters of the Medium Term Fiscal Program that reduces our deficit and debt gradually, creates jobs, and decreases poverty in the process.
It is in obedience to this fiscal framework that I have been steadfast in my position that there is no way that the P731.4 billion Unprogrammed Fund can be fully funded. There is a fiscal red line we will not cross.
I have been an advocate of the “PAYGO” or pay-as-you-go system in budgeting in which laws that beget expenditures must have a clear source of funding – identified by the proponents themselves.
At this juncture, let me assure the public that there is no advocate more committed to higher health spending than the DOF.
Personally, I have championed higher sickness benefits and faster processing of claims by the state health insurer.
My being in the executive has not altered my position which I have espoused in my 30 years in Congress.
And I believe that the present management is in the best position to implement needed reforms, and they have adequate financial resources to leverage these into reality.
Before I bowed out of the Senate and the House, two of my advocacies, the Doktor Para sa Bayan Act, and the Regional Medical Center Act, became laws.
And the Recto amendment in the TRAIN Law and Sin Tax Law which removes the sales tax on medicines for diabetes, high cholesterol, hypertension, cancer, mental illness, tuberculosis, and kidney diseases kicked into effect.
It is also on record that I am the principal author of the Universal Health Care Act.
At the end of the day, my dear honorable members of the Senate, dahil kayo ang may akda ng GAA na pinapatupad lang namin — magsabi lang po kayo ng inyong mga panukala kung paano popondohan ang mga proyektong nasa pambansang badyet, at handa kaming makinig at sumunod sa inyong utos.
Magandang umaga at maraming salamat. Handa po tayong sagutin ang lahat ng inyong mga katanungan.
