Wednesday, November 26, 2014

Education sector gets biggest share in Senate approved P2.606 trillion 2015 national budget

MANILA-Voting 13-0 with zero abstention, the Senate today approved the P2.606 trillion proposed national budget for 2015.

          The Department of Education (DepEd) got the largest share of the budget pie with P323.56 billion followed by the Department of Public Works and Highways (DPWH) with 292.57 billion, Department of Social Welfare and Development (DSWD) with P109.34 billion, Department of Interior and Local Government (DILG) with P104.57 billion and the Department of National Defense (DND) with P99.92  billion.

          Senator Chiz Escudero, chair of the Senate Committee on Finance, said the Senate increased DepEd’s budget by P3.636 billion, representing allocations for feeding programs, the Quick Response Fund and chalk allowance.

          Senate President Franklin M. Drilon explained that the hike in the funds for the education sector is part of the Senate’s on third reading goal to improve the delivery of educational services in the country. “The youth are the most important asset our country has to nurture, and part of it is by giving education the highest priority in the budget," he said.

In September, the upper chamber had passed a package of inclusive education bills geared towards the poor, including bills on open and distance learning, and the “Iskolar ng Bayan Act.” In turn, Drilon said that the greater budget in 2015 will help government address pressing challenges to the educational sector, the need for new classrooms, including the repair of facilities damaged by previous calamities.

For his part, Senate President Pro-Tempore Ralph Recto introduced the amendment for the chalk allowance, increasing it to P1,500 next from the present P1,000. “Chalk allowance” is the popular term for the amount given to teachers at the start of the school year for the purchase of “chalk, pens, erasers, cartolinas and other school supplies” they use in teaching.

          Escudero said the Senate’s version of the 2015 national budget had also addressed the concerns raised by Senator Miriam Defensor Santiago in her privilege speech last November 24.

          “The concerns she (Santiago) had, we addressed them in the Senate version. We had improved the other points she raised,” Escudero said in an interview.

          He said the Senate’s version of the 2015 national budget had followed the Supreme Court’s decision on what was allowed or disallowed in the national budget to a dot.

To ensure transparency, Escudero said, the Senate had included a provision in the 2015 General Appropriation Act (GAA) that would prohibit government agencies to use “lump sum funds” without submitting a report or itemized listing to Congress and the Commission on Audit.

He said heads of government agencies will be penalized if they violated the provisions.

“We provided a penalty of six months suspension or imprisonment of one year or a fine equivalent to six-month salary if they fail to submit the report,” Escudero said during an interview.

          While the Senate had realigned P96.58 billion of the proposed 2015 national budget, Escudero said, senators were very transparent on where the money was reallocated.

For instance, he said, the Senate allocated P19 billion for the Rehabilitation and Reconstruction Program to cover past disasters, including Super Typhoons Yolanda, Glenda and Mario.

          He said the Senate had also realigned P2.67 billion under the Information and Communications Technology Office for the implementation of free wi-fi internet in public places. The budget will be sourced from the Digitization Empowerment Program.

          The Department of Science and Technology will set up 50,872 wi-fi hotspots next year, including 7,910 public high schools, 38,694 public elementary schools, 113 state colleges and 1,118 public libraries and public areas in 1,490 towns.

          “We have restored the House cut on the DPWH amounting to P242.6 million under the MFO3 or the “Maintenance and Construction Services of Other Infrastructures” and P1.318 billion under MFO1 under the “National Road Network Services.” In addition, an increase of P1.130 billion will be provided for the Quick Response Fund of the DPWH to bring it to P2 billion,” Escudero said.

          Likewise, he said, the Senate had also increased the Quick Response Fund of the Department of Health by P500 million.

At the same time, he said the Senate had increased the Supreme Court’s budget by P715.36 million for the Enterprise Information System Plan or the IT for e-courts and reallocated and restored P1 billion of the Philippine Children’s Medical Center, particularly for hospital modernization, to be sourced from their budget for Land Acquisition pending the Department of Justice’s (DOJ) opinion on the land swap transaction between the DOJ and the National Housing Authority (NHA).

          Other highlights of the Senate version of the 2015 national budget include:

    Increase of P421.5 million for the Bureau of Customs for Workplace Modernization and various equipment to counter the perennial problem of smuggling;
    Additional budget of P362.472 million for the Department of National Defense as buildings outlay for the National Defense College of the Philippines as well as for Force Sustainment or Enhancement of the various Engineering Brigades of the Philippine Army, Philippine Air Force and the Philippine Navy;
    Increase of P300 million for the modernization program and faculty development of the Philippine Normal University;
    Increase of P108.907 million for Jail Facilities under the Bureau of Jail Management and Penology to be sourced from the cut in Monitoring and Evaluation Cost of PAMANA and the Grassroots Participatory Program of the DILG-OSEC;
    Realignment of P2.915 billion in the budget of the Department of Social Welfare and Development, specifically from the Pantawid Pamilya Pilipino Program and the KALAHI-CIDSS projects to Social Pension for Indigent Senior citizens which will benefit 460,647 senior citizens at a total cost of P2.770 billion in line with Republic Act No. 9994 or the Expanded Senior Citizens Act of 2010; additional funding of P50 million will also be provided for the Comprehensive Project for Street Children, Street Families and Indigenous Peoples-especially Badjaos, as well as an additional P95 billion for protective services for individual and families in difficult circumstances;
    Increase of P15 million for the National Commission on Muslim Filipinos for the Hajj Travel Assistance and Endowment Administration Services.

Escudero said the Senate provided a special provision which would allow the fund for athletes shall be used solely for the benefit of the athletes and that it cannot be realigned for any other purposes.

He said the Senate had also provided for a special provision under the DPWH for the construction of projects that might impinged on heritage sites requiring consultations with all stakeholders concerned.

          “We also provided a provision in so far as the National Museum, National Historical Institute and National Commission for Culture and Arts, allowing such agencies to use its income to maintain the existing heritage sites and their facilities,” Escudero said, adding:

          “We also added a special provision mandating the Land Transportation Office (LTO) to pay its obligations in accordance with the contracts it entered into and a provision in so far as DOH, DPWH, Department of Transportation and Communications (DOTC) and DepEd are concerned, providing for the utilization of their Quick Response Fund to procure insurance policies in accordance with the Government System Insurance Service (GSIS) laws as well as the procurement law to cover infrastructure facilities and other equipment in danger zones and other areas as they may deem feasible.”

Senate okays P82k hike for tax exemption of bonuses

MANILA- Employees from both the private and public sector can expect a bigger take home-pay soon, with the Senate’s approval of a bill seeking to raise the tax exemption ceiling of 13th-month pay and other benefits from P30,000 to P82,000.

            Senator Juan Edgardo “Sonny” Angara, co-author and sponsor of Senate Bill 2437, says that once the bill is enacted into law, employees receiving 13th-month pay and other benefits, including Christmas bonuses and productivity bonuses, not exceeding P82,000 will be exempted from tax.

The original bill pegged the ceiling for tax-exempt bonuses at P75,000 but was raised to P82,000 upon the proposal of Senator Ralph Recto during plenary deliberations. Angara, chair of the Senate Committee on Ways and Means, said he accepted Recto’s amendments because his proposal was the “same figure given by internal Revenue Commissioner Kim Hernares during eone of the hearings on SB 2437.

            “She (Henares) said that P30,000 in 1994 would be worth around P82,000 today,” Angara said.

Senate President Franklin M. Drilon concurred with the hike, saying that the bill’s passage is necessary "to provide relief to state and private workers whose purchasing power has been shrinking for years due to inflation, but still have had to deal with the consequences of an outdated law."

            When the P30,000 tax ceiling was first legislated in 1994, Angara explained, the basic salary of a government employee in the lowest rung was P3,800 a month while that of the President was P25,000. The ceiling, he noted, had not been adjusted in 20 years although Congress had legislated other measures to soften the impact of inflation on the workers.

            More importantly, Angara said, SB 2437 had included a provision “that the adjustment be made mandatorily every three years to coincide with major surveys conducted by the Philippine Statistics Authority such as the Family and Income Expenditure Survey.”

            Recto, principal author of the bill, said the peso had lost two-thirds of its value over the past 20 years. The equivalent of one peso in 1994, he said, was worth 36 centavos today. Recto was Director-General of the National Economic and Development Authority in 2008.

“When the 17-year-old Bam Aquino sipped his first beer in 1994, Pale Pilsen cost P8.50 a bottle. Of course, Sen. Sonny Angara, on vacation from his London studies then – or I am told that he graduated in 1994 – and if he were to borrow one of his dad’s cars, he would have paid P8.50 for a liter of gasoline,” Recto said in his co-sponsorship speech.

While some experts estimated that government would lose around P42 billion in taxes with the enactment of SB 2437 into law, Recto argued that there was no basis for the computation.

A more reasonable computation of tax loss, he said, was estimated by the Philippine Institute for Development Students at P2.6 billion and Dr. Stella Quimbo of the University of the Philippine School of Economics at P5.6 billion.

“But whatever is the revenue loss for the government is actually income gained for the workingman. And even if his 13th month pay is tax exempt upon receipt, it will be taxable when spent,” Recto said, adding that taxes not withheld at source will later be captured in the form of sales tax at points of sales.

In response to concerns about the speedy implementation of the law, Drilon had also introduced an amendment to the bill stating that “the failure of the Secretary of Finance to promulgate the necessary rules and regulations shall not prevent the effectivity of the law.”.
“This is because it is up to the Department of Finance and the Bureau of Internal Revenue to come up with the implementing rules and regulations when this law is passed, and they may not have enough time to accomplish that in time. But surely, the law will be fully implemented next year,” the Senate leader noted.

For his part, Senator Manuel “Lito” Lapid Jr. then said that “increasing the cap of exemption on the 13th month pay and other benefits from income tax would increase the disposable income of the working class.”

This in turn, Lapid said in his co-sponsorship speech, would stimulate consumption.

“All reasons to increase the cap for the tax exemption on the 13th month and other benefits points to one thing: to enhance the welfare of the working class,” Lapid said.   (Pilar S. Macrohon)


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