THE 2020 BUDGET

Higher by 12% than the PhP3. 662 trillion Budget in 2019, the FY 2020 Cash Budget supports landmark
programs and projects on infrastructure and human capital development, as well as the
implementation of game-changing reforms to accelerate economic growth, poverty reduction, and job
generation.

Infrastructure

DPWH, the top gainer this year, has an approved appropriation of P580.89 billion for 2020. It's P116.33
billion (25%) higher than last year.

The multibillion increase may be traced back to the controversies hounding the 2019 budget.

When last year's budget was signed in April 2019, the President vetoed programs and projects worth
P95.3 billion under the budget of DPWH, which the senators alleged were insertions from the House of
Representatives at that time.

Over the course of the budget deliberations, House Speaker Alan Peter Cayetano said in September
2019 that the vetoed allocations in last year's budget may not be reinstated in the 2020 budget.

In late September 2019, the lower chamber passed their version of the budget bill with minimal
amendments, and took some P3.75 billion originally set for right-of-way funds under the DPWH.

But by the looks of it, the DPWH bounced back. The allocation for public works increased – higher than
the vetoed amount in 2019.

Under the original proposal, the DBM allocated new appropriations worth P533.5 billion for DPWH.
When congressmen passed the budget bill, they decreased allocations by P3.75 billion, but by the end of
the bicam discussions, lawmakers decided to give the department a net increase of P51 billion, bringing
sums to a total of P580.89 billion.

The infrastructure sector has a lot of catching up to do with the government's "Build, Build, Build"
infrastructure program. The 4-month budget delay in 2019 held back construction for new programs.

According to the DBM, about one-third of DPWH's funds (P203.8 billion) will be used for its network
development and bridge programs.

Part of its funds for 2020 is the "special road fund" worth P15.57 billion. This was from the motor vehicle
users' charge, transferred from the abolished Road Board. Under the special provisions, this money may
be earmarked solely for the construction, upgrading, and repair of roads, bridges, and drainages.

Education
DepEd's budget for this year stands at P521.35 billion, or about P20 billion more than the 2019 budget
of P501.12 billion.

During budget deliberations, DepEd sought congressional approval of additional funds worth P30 billion,
higher than the amount the DBM proposed under NEP, which was P518.84 billion at that time.

DepEd said then that it will use the extra funds for its computerization program and human resource
development, among others. The fund will also be used to create additional teaching positions, but to
date, there are over 59,026 vacancies within the department.

The latest Commission on Audit report also found that at least 4.8% of the education department's 2018
budget was unused, mainly due to unimplemented projects and unfilled permanent positions.

While the P30-billion request was not granted, DepEd's approved budget was still P2.5 billion higher
than the originally proposed amount by the DBM.

Under the approved fiscal plan, at least P36 billion was allocated for the free tuition law program this
year.

For teachers, those teaching for more than 6 hours would receive extra compensation. In the special
provisions, every hour spent would be paid with 25% of the teacher's hourly rate, but still subject to
DepEd guidelines.

Agriculture

The appointment of Agriculture Secretary William Dar seemed to bring back the economic managers'
trust in the department.

The Department of Agriculture received an increase of P15 billion from last year's P47.29 billion,
bringing its total funds to P62.29 billion.

Under resigned DA secretary Emmanuel Piñol, 2019 funds were decreased because of DA's poor
spending performance in the past years, which was at 55.1% in 2017 and 66.2% in 2018.

This year, DA's budget includes the P10-billion Rice Competitiveness Enhancement Fund. It also includes
some P3 billion to be disbursed as cash grants to farmers affected by the rice tariffication law.

The "Young Farmers Challenge" program was also funded with P100 million, in a bid to encourage the
Filipino youth to stay or return to the agriculture sector. (READ: Birth pains force farmers' kids out of
school)

Meanwhile, the National Food Authority, a government corporation attached to DA, would receive less
subsidy from the government in 2020. The appropriated amount for this year is only P7 billion, down
from 2019's P10 billion.
Social welfare

DSWD has a total budget of P163.811 bilion, a P22.65 billion increase from last year's P141.21 billion.

At least a fifth of its budget would go to the Pantawid Pamilyang Pilipino Program, commonly known as
4Ps, in the form of financial assistance instead of rice subsidy.

On top of DSWD's budget, some P36.5 billion was lodged under the Land Bank of the Philippines for its
unconditional cash transfer program. The fund was placed under Landbank for easier disbursement to
beneficiaries.

THE 2021 BUDGET

President Rodrigo Roa Duterte signed into law the PhP4.506 trillion Fiscal Year (FY) 2021 General
Appropriations Act (GAA), which is the third full cash budget of the Duterte Administration and serves
as the government’s financial blueprint to recovery in response to the COVID-19 pandemic. The
PhP4.506 trillion budget, which is equivalent to 21.8 percent of gross domestic product, is the
country’s largest to date, larger by 10 percent than the FY 2020 budget.

Carrying the theme “Reset, Rebound, and Recover: Investing for Resiliency and Sustainability”,the FY
2021 national budget will help the nation reset by addressing the pandemic, rebound by boosting
infrastructure development and by generating job opportunities, and rebuild by assisting communities
adapt to the post-pandemic life.

Consistent with the provisions of the Constitution,

The education sector shall continue to receive the largest portion of the national budget to the tune of
PhP751.7 billion, or 16.7 percent of the FY 2021 budget.

The Department of Public Works and Highways (DPWH) and the Department of Interior and Local
Government (DILG) will follow suit with PhP695.7 billion (15.4 percent) and PhP249.3 billion (5.5
percent), respectively.

The Department of Health (DOH), being the primary government arm in responding to the COVID-19
pandemic, will receive PhP210.2 billion which is 19.6 percent higher than its FY 2020 budget.

This is followed by the Department of National Defense (DND) with PhP205.8 billion,

Department of Social Welfare and Development (DSWD) with PhP176.9 billion,

Department of Agriculture (DA) with PhP71.0 billion,

The Judiciary with PhP45.3 billion, and the

Department of Labor and Employment (DOLE) with PhP37.1 billion.

The 2021 budget is touted as the recovery budget as it provides additional funding for COVID-19
response and sets a ₱72.5-billion allotment for vaccine purchases. However, only ₱2.5 billion will come
from available cash, as the bulk will be funded through loans.

It allots some ₱283 million for the establishment of the Virology Science and Technology Institute of the
Philippines that would spearhead studies on emerging and re-emerging viruses, and ₱51.56 million for
disease surveillance and monitoring of coronavirus.

It also earmarks ₱1.1 trillion for infrastructure projects, which are expected to create jobs and boost
economic activity after a recession year.

The national budget also allots ₱17.02 billion for the development, reproduction, and delivery of
learning resources, and ₱5.9 billion for the expansion of the Department of Education's Computerization
Program.

Under the spending plan, ₱20.4 billion will be allotted for the Department of Labor and Employment to
help displaced formal and informal workers, while ₱2.4 billion will be earmarked for the Department of
Trade and Industry's MSME Development Program.

The government will also continue to provide cash aid under the Pantawid Pamilyang Pilipino Program,
Social Pension for Indigent Senior Citizens, Sustainable Livelihood Program, and the Supplementary
Feeding Program.

The budget has also allocated ₱4.3 billion for the implementation of the Philippine Identification System.

Separately, bills extending the validity of fund allocations under the 2020 budget as well as under the
Bayanihan to Recover as One Act are also seen to boost government spending and spur greater
economic activity next year.

The government projects that the economy can grow by 6.5-7.5% in 2021 after shrinking by at least
8.5% this year.