MANILA - The House plenary early dawn on Friday approved on second reading the P1.541 trillion budget of the national government without major amendments.

On the last session day before Congress takes a three-week break, solons stayed in the plenary for 17 hours to finish deliberations on the budget. The budget was approved at 2:41 a.m. on Friday, ending two-week marathon deliberations that began on October 6.

The P1.541 trillion budget proposed by Malacañang for fiscal year 2010 is 8.1% higher than the P1.426 trillion budget in 2009.

However, as usual, bulk of the increases would go to debt service payments (P340.8 billion) and to salary adjustments of government employees (P494 billion in personal services).

The congressmen hardly touched Malacañang's proposed budget.

House Speaker Prospero Nograles created a special committee committee to accept individual amendments to the budget. The committee is composed of House committee on appropriations chair Quirino Rep. Junie Cua, majority leader Iloilo Rep. Arthur Defensor, and South Cotabato Rep. DarleneAntonino Custodio to represent the minority.

"We will have our third reading when we return from the recess," Nograles announced before the session was adjourned. Congress will resume on November 9.
After third reading, the budget will be transmitted to the Senate, which will come up with an approved budget.

In the bicameral conference, representatives of both chambers will consolidate their versions. This is when major amendments and insertions in the budget traditionally happen.

Calls have been made to overhaul the 2010 budget and make it responsive to the disasters wrought by storms "Ondoy" and "Pepeng" in Metro Manila and northern Luzon, respectively.

But Nograles previously said that the new P12 billion allocation committed to the affected areas is more than sufficient to address the concerns.

Congress earlier passed a separate resolution authorizing the use of the "Unprogrammed Funds" not exceeding P12 billion for the relief operations, rehabilitation, and reconstruction of areas affected by natural calamities.

Under the Senate resolution, the funding will be sourced from the royalties earned from the sale of Malampaya natural gas.

Contentious offices

Controversial issues were raised against the budget of various offices--the Commission on Elections (Comelec), Office of the President, Department of Interior and Local Government (DILG), National Power Corporation (NPC), and the Metro Manila Development Authority--and other lump sum appropriations, but no actions were taken on recommendations to slash their budgets.

Deliberations on the budget of the Comelec was delayed by questions on the legality of the 2010 automated polls. In the end, solons agreed to hold another caucus with the Comelec to iron out these concerns when sessions resume.

The Department of Budget and Management was also questioned for not releasing allocations.

"Even allies don't get releases. This is the first time, I, as congressman, am made to look like the messenger. We have to beg for releases of things that are already in the budget," complained Manila Rep. Amado Bagatsing.

"We will file our certificates of candidacy soon. We would like to be guided. Can I deliver what I promised to my area? A lot of our colleagues here have been devastated by the series of calamities," Bagatsing added.

To rush the budget's approval, the House convened plenary sessions at 9:30 a.m. five days a week instead of the regular 4 p.m. Monday to Wednesday schedule.

Zero Capital Outlay

Various sectors expressed concerns that the 2010 budget does not fit the country's needs.

According to a paper by the Congressional Planning and Budget Department (CPBD), the House of Representatives' think-tank, the 2010 budget actually represents a negative growth of 2.2%, if inflation is taken into account.

The allocation for capital outlay―allocation for new buildings and other long term assets, including equipment and infrastructure―was slashed by 21.5% to P183 billion from P233 billion in 2009. Several government agencies, like the Office of the Ombudsman, got zero capital outlay.

"This budget violates economic wisdom. Sensible economists tell us that during an economic downturn, government must increase spending, especially capital outlays," said Akbayan Rep. Walden Bello during the deliberations.

Even administration congressmen had opposed the cuts on capital outlay on the ground that the pump-priming package put together in 2009 should be sustained.

In 2009, government officials and legislators drew up a P330 billion stimulus plan to cushion the impact of the global economic slowdown on the local economy. (Read: Solons question P50-B cut in 2010 capex budget)

President Arroyo's State of the Nation (SONA) infrastructure projects also hang in the balance. The CPBD warned that when Arroyo step down in June 2010, the infrastructure projects that she promised would not yet have been completed. (Read: SONA infrastructure projects hang in the balance)
 
But, in the end, House appropriations committee chair Quirino Rep. Junie Cua acknowledged that spending more for pump-priming projects would run the risk of a big fiscal deficit.

Smaller pork

The congressmen also retained the Priority Development Assistance Fund (PDAF) or the "pork barrel," which was reduced from P9.7 billion in 2009 to P6.9 billion in 2010.

The 2010 budget is actually only restoring the original allocation for the PDAF. It was a bicameral committee which increased the PDAF for 2009 to P9.666 billion. (Read: Palace vows better use of pork in 2010)

In terms of expense class, the P1.541 trillion budget is allocated as follows: P494 billion (32.1%) will to go personal services; P864 billion (56.1%) will go to maintenance and other operating expenses; and P183 billion (11.9%) will go to capital outlays and net lending.

In nominal terms, the highest budgetary increases will go to Department of Agrarian Reform (P6.3 billion) and Department of Social Welfare and Development (P3.8 billion).

The increase in DSWD budget is due to the Pantawid Pamilya Program (4Ps), which doubled in 2010. From P5 billion in 2009, the program will get P10 billion or roughly 69% of the entire budget of the department

The biggest cuts will be on the Department of Public Works and Highways (P32.3 billion), Department of Telecommunications and Communications (P9.8 billion), Department of Agriculture (P4.7 billion), and State Universities and Colleges (P3.2 billion). These are the same agencies and offices that benefited from the P50 billion realignment in 2009 from interest payments.