Final Online DBM Proposed Budget 2015

8/10/2019 Final Online DBM Proposed Budget 2015

1/60

Department of Budget and Management

Republic of the Philippines


2/60

2

Produced by the Philippine Department of Budget and Management (DBM)September 2014

All rights reserved.

To ensure that this publication is widely accessible, the DBM highly encourages thereproduction, copying, printing, and/or dissemination of this publication or its partsthereof as long as such acts are exclusively for personal and non-commercial use andwith proper acknowledgment of the DBM as source, unless otherwise stated in thepublication (e.g., information from other non-government sources).

Users are restricted from reselling and/or creating derivative works or other uses forcommercial purposes without the express written consent of the DBM. While usersare free and welcome to reproduce and redistribute this publication or parts thereoffor non-commercial use, they must do so in a way that does not suggest that theDBM endorses the user or its use. The DBM shall exercise any and all legal remediesavailable in case of violation of any of the foregoing restrictions.

PRODUCTION TEAM:

Office of the SecretaryTraining and Information ServiceFiscal Planning BureauBudget Technical Service

OVERALL EDITING:

Katherine Jimenez

DESIGN AND LAYOUT:

Dan Matutina

INFORMATION FROM:

Budget and Management Bureaus A, B, C, D, E, F, and G

Office of the Chief Information OfficerPublic Financial Management PMO

ADVISERS:

Undersecretary Laura B. PascuaAssistant Secretary Clare G. Amador

For inquiries, request for copies, and other information, comments, and suggestions,and email [email protected]

2015 PEOPLES PROPOSED BUDGET


3/60

The management of public funds has drastically changed since 2010. Process-wise,leakages have been plugged in the planning and execution of the budget, enablingthe faster implementation of government programs. At the same time, budget

prioritization has been strengthened further as the Aquino Administration adapts tothe challenges faced by the nation.

These challenges have made a historic impact on the people, but they have alsoprovided a perfect opportunity for governance.

The challenges of last year helped the DBM redefine its role in governance. Themobilization of public resources for disaster response motivated us to tighten ourpriorities further. The anger of the people over the alleged misuse of funds pushed usto strive harder to ensure each peso is rightfully allocated and utilized.

Behind the challenges we faced is an opportunity. The spark behind the ragedeepened the interest of the people in the way public funds are used. The DBM seesthis as an opportunity to bring the budget process closer to the people and to openavenues for citizen engagement.

This is what the 2015 Peoples Proposed Budgetis all about. Since 2011, the DBM hasbeen producing publications like this to enhance transparency and accountabilityby giving citizens a tool to understand the budget in the simplest way possible. Thispublication summarizes the governments plan in its pursuit of inclusive development.

Take time to understand our budget and how the government will ensure no one is leftbehind. Review what has been committed and what will be committed. Get involvedin good governance. Makialam sa Budget ng Bayan.

FOREWORD

Florencio Butch Abad

SECRETARY OF BUDGET AND MANAGEMENT


4/60

4


5/60

TABLE OF CONTENTS

A Budget for Inclusive and Sustained Development 7

Overview of the 2015 Proposed Budget 10

By Sector 11

By Region 12

By Expense Class 13

Top 10 Executive Departments 14

By Department and Special Purpose Funds 15

Financing the 2015 Expenditure Plan 17

Expenditure Priorities 19

Social Protection and Social Services 22

Economic Expansion and Job Generation 29

Climate Change Adaptation and Mitigation 40

Just and Lasting Peace and the Rule of Law 44

Good Governance and Anti-Corruption 48

Aquino Budget Reform Agenda 52

Glossary of Frequently-Used Budgeting Terms 58


6/60

6


7/60

Papalapit na po talaga tayo sa minimithi

nating kinabukasan, kung saan naghahari

ang katarungan, at tunay pong walang

maiiwan. Ito ang resulta ng reporma, at ito

ang ipinaglalaban natin, at patuloy pang

ipinaglalaban: hindi ang pagpapanatili ng

nakasanayan, kundi ang pagbabago ng

sistema para makinabang ang lahat.

Today, the Philippines continues to move forward towardslasting change.

Since the Aquino Administration assumed office, the countryhas achieved unprecedented feats: robust economic growth,second only to China in Asia; investment-grade credit ratingsimproved competitiveness rankings and the newfound

confidence by the investing public on the Philippines; theenactment of difficult yet necessary reform measures, suchas the Sin Tax Reform Law and the Reproductive Health Act;and the signing of the Comprehensive Agreement on theBangsamoro (CAB) with the Moro Islamic Liberation Front(MILF); among others.

All of these achievements were due to the people themselves

A Budget for Inclusive and

Sustained DevelopmentPresident Benigno S. Aquino III,

FIFTH STATE OF THE NATION ADDRESS

THE PROPOSEDNATIONAL BUDGETFOR 2015


8/60

8

2015 Budget: Key Features and Reforms

This proposed Budgeta 15.1-percent increase over the 2014Budget, and equivalent to 18.4 percent of gross domesticproduct (GDP)enables the government to expand itsinvestments for inclusive growth. Beyond merely increasing

the Budget per se, the Aquino Administration also intensifiedthe focus of public spending on social and economic serviceswhich now take up a total of 64 percent of the 2015 Budget,from just 45.3 percent in 2005.

This Budget supports further economic expansion.

This proposed Budget prioritizes programs and projects thatsupport the creation of more job and livelihood opportunitiesand invest in the peoples ability to participate in the economy

Through the Budget Priorities Frameworkthat guided

the crafting of this proposed expenditure plan for 2015,departments and agencies prioritized the following (for moreinformation, please see page 20):

It focuses on the imperatives ofinclusive development.

because they chose not to let the status quo prevail, insteadthey chose to embark with the government on a challenging yetunrelenting quest for reform. As President Aquino said, Kayo

ang gumawa ng pagbabago.

As the Philippines moves forward into a new path ofprosperity, two major challenges need to be addressed. First,the remarkable economic growth must translate into real andtangible benefits for the people, especially the poor. So far,poverty incidence has been reduced to 24.9 percent of Filipinosin the first semester of 2013, from 27.9 percent and 28.6percent in the same period of 2012 and 2009, respectively.These only show that the governments interventionshave been effective in reducing poverty, but these must beintensified to achieve inclusive and sustained development.

Second, the governance reforms so far introduced by theAquino Administration need to be sustained, intensified, andmade irreversible. Budget reforms, in particular, need to bedeepened to ensure that each government peso spent makesan impact in the long term. The public clamor to hold thosewho misused the Priority Development Assistance Fund(PDAF) in the past accountable, along with their increaseddemand for a greater voice and vote over how their taxes arespent, only emphasizes the need to further transform thePhilippine budgeting system. After all, good governanceespecially in the way the government allocates and spendspublic fundsis a necessary foundation for inclusivedevelopment.

The P2.606-trillion National Budget proposed for 2015 providesthe government with the tools to face these challenges. It

was crafted around the idea that no one, especially the poorand vulnerable, should be left behind. It also supports thegovernments bid to install lasting and irreversible reforms inpublic institutions.

Accelerate poverty reduction by expanding keysocial protection and social services

Manage climate risks and build back better thecommunities ravaged by disasters

Sustain economic expansion and facilitate thecreation of more jobs

Establish an enabling environment of lasting peacand the rule of law, and of good governance


9/60

Through the Performance-InformedBudgeting (PIB) approach that beganlast year, the National Budget nowincludes not only the financial allocationsbut also the performance targets ofeach government agency. The AquinoAdministration took this reform toa higher level: the 2015 Budget nowincludes indicators on outcomesnotonly the targeted services that agenciesmust deliver but also the targeted resultsof such services.

This Budget sustains reforms that enablethe government to spend and to deliverservices in a prompt manner. These

While spending on social and economidevelopment priorities must increase,the government commits to keep withiits means. With this, the 2015 Budgetkeeps the fiscal deficit to 2 percentof GDP, and seeks to reduce the debtstock to 45.6 percent by 2015 from52.4 percent in 2010. These goals willbe achieved through reforms to plugrevenue collection leakages and improvdebt management.

This Budget seeks to leave no region,province, or community behind. Throughthe Budget Priorities Framework,departments and agencies were taskedto prioritize the 44 poorest and mostvulnerable provinces and to tailor-fitinterventions according to their specificneeds (for more information, see page 21):

This Budget seeks to further deepentransparency and citizens engagementin the governments financial affairs. Forinstance, the Grassroots ParticipatoryBudgeting Process was expanded tocover 1,590 cities and municipalities,

It increases the peoples voice inthe use of their taxes.

It increases governmentsaccountability for the results ofpublic spending.

It supports the rapid and eectivedelivery of public services.

It enhances the health of thegovernments nances.

It prioritizes the needs of poor andvulnerable localities.

Provinces with high

poverty magnitude

Provinces with highpoverty incidence

Provinces that are mostvulnerable to shocks anddisasters

from 595 cities and municipalities whenit was first rolled out. The expandedprocess resulted in P20.9 billion in

locally-developed projects incorporatedin the 2015 Budget, from only P8.4 billionin the 2013 Budget.

include the General Appropriations Ac(GAA)-as-Release Document policy,which de-clogs the process of releasing

budgets to agencies, and the One-YearValidity of Appropriations, whichencourages agencies to utilize theirbudgets as early as possible. This Budgalso clarifies the Definition and Useof Savings and Augmentationto fasttrack the use of public funds to deliverservices.


10/60

10

The 2015 Proposed

National Budget:

P2.606 trillion

The proposed Budget for 2015 is 15.1 percent higher than

the 2014 GAA. Net of interest payments, the proposed

Budget will increase by a faster rate of 16.9 percent

year-on-year. The total proposed Budget is 18.4 percent

of gross domestic product (GDP), higher than the 17.7

percent of GDP in 2014.

The National Budget shows the estimation of government

revenues and expenses for pursuing programs and projectsbased on its economic growth and human development thrusts.It serves as an instrument for good governance becauseagencies, through their respective budgets, are accountable fordelivering measurable results.

2005 2007 2009 2011 2013 2015

Proposed

2006 2008 2010 2012 2014

Adjusted

1 Composed of the DBM as chair, the Department of Finance (DOF),

the National Economic Development Authority, and the Office of

the President as members, and the Bangko Sentral ng Pilipinas as

resource agency

How is the Budget crafted and approved?

1. Agencies craft their proposed budgets usingbudget parameters set by the Departmentof Budget and Management (DBM) and theDevelopment Budget Coordinating Committee1.

2. The DBM reviews and consolidates the agenciesbudgets into the proposed National Budget andpresents it to the President and the Cabinet forapproval.

3. Upon approval, the proposed National Budgetbecomes the National Expenditure Program (NEP).The President submits the NEP to Congress.

4. Congress reviews the NEP, holds public hearings,effects changes, and approves the NEP. The

President then signs it into the GAA.

5. Throughout the above processes, citizens areinformed and involved.

Total Obligation Budget

Total Budget Less Debt Burden1

% Growth Rate

OVERVIEW OF THE 2015 BUDGET

646.04

734.6013.7%

877.9619.5%

1,028.0017.1%

1,150.2211.9%

947.55

1,044.8310.3%

1,155.5110.6%

1,314.6113.8%

1,434.159.1%

1,169.481.7%

1,472.982.7%

1,298.979.7%

1,488.7616.0%

1,658.3211.4%

2,206.6416.9%

1,887.0313.8%

1,580.027.3%

1,828.9815.8%

1,998.989.3%

2,606.0015.1%

2,264.63

13.3%


11/60

Social Serviceswill receive thehighest share of the budget torealize the Administrationscommitment toward prosperityfor all. Thus, P37 in everyP100equivalent to P967.9

billionwill be allocatedfor social services, such aseducation, healthcare, housing,social welfare, employment,and other social protectionprograms. The budget forsocial services has increasedby 15 percent compared withthe 2014 budget.

Interest Payme

Net Lending

General Public Services

Defense Social Servi

P372.9 B 14.

P26.5 B1.0%

P423.1 B 16.2%

P115.5 B 4.4% P967.9 B 37

Economic Services will beallocated P700.2 billion tosupport the countrys higheconomic growth trajectory.Services that fund agriculture,transport infrastructure,

tourism, and other economicservices will receive 26.9percent of the budget. Thebudget for economic serviceshas increased by 18.1 percentfrom P593.1 billion in 2014.

General Public Servicesensure sound fiscal

management, strongforeign affairs, and efficientlawmaking, among others.This sector will receive 16.2percent of the budget, whichhas increased by 16.7 percentfrom the P362.6 billion budgetin 2014.

Defense spending will beat P115.5 billion to ensure

the security reforms andmodernization of the armedforces. This sector has thehighest year-on-year growthincrease at 29 percent fromP89.5 billion in 2014.

Debt Burden spending willhave a lower share of the totabudget in 2015, from 15.6percent of the total budgetin 2014 to 14.3 percent.The government will spend

P399.4 billion to pay interestpayments on the nationalgovernments domesticand foreign debt as well asnet lending to governmentcorporations for debtsguaranteed by the nationalgovernment.

THE PROPOSED BUDGET BY SECTOR

Economic Servi

P700.2 B 26.


12/60

12

Of the proposed 2015 Budget, 55.2percent or P1.438 trillion will be allocatfor distribution to the regions2.

2With the implementation of the Unified Account CoStructure, the breakdown of the Budget by region is

computed based on the location of the implementing

units, not necessarily the location where programs an

projects will be implemented.

THE PROPOSED BUDGET BY REGION

NCR

REGION IX

REGION I

P 404,667,806

P 52,482,847

P 61,006,486

REGION II

REGION III

CARAGA

REGION V

REGION XI

P 50,080,747

P 114,466,360

P 42,220,056

P 74,425,861

P 54,235,331

REGION IV A

REGION IV B

REGION VI

REGION XII

ARMM

REGION X

REGION VII

REGION VIII

P 111,780,209

P 45,994,324

P 85,574,450

P 52,716,181

P 49,954,969

P 61,859,880

P 74,103,846

P 69,425,746

CAR

P 33,127,533

Luzon 490.9

Visayas 229.1

Mindanao

TOTAL

313.5

Non-Regionalized Budget 1,167.9Nationwide 671.5

Central Office 496.3

2,606.0

The Budget by Region (in P billions)

Regionalized Budget 1,438.1

NCR 404.7


13/60

THE PROPOSED BUDGET BY EXPENSE CLASS

Infrastructure and otherCapital Outlays areexpenditures for roads,bridges, airports, and othersimilar capital goods.Infrastructure spending,estimated at P506.4 billion.

Debt Servicing-InterestPayments will receive a lowershare of the total budget in2015. The budget will allocateP372.9 billion for interestpayments. This allocationis 14.3 percent of the 2015Budget, from 15.6 percent in2014.

Maintenance and Other

Operating Expenditures orMOOEare outlays for thepurchase of goods and services(e.g., supplies, maintenance,utilities, and professionalservices) that are needed forthe regular operations andprogram implementation of thegovernment. MOOE spendingwill be at P432.6 billion or 16.6percent of the Budget.

CURRENT OPERATING EXPENSES 1,965.9 75.4

Personnel Services 761.7 29.2

MOOE 432.6 16.6

Subsidy 61.3 2.4

Allotment to LGUs 311.9 12.0

Interest Payments 372.9 14.3

Tax Expenditure Fund 25.5 1.0

CAPITAL OUTLAYS 613.6 23.5

Infra. and Other CO 506.4 19.4Equity 1.4 0.1

Capital Transfers to LGUs 105.9 4.1

NET LENDING 26.5 1.0

Total 2,606.0 100.00

PARTICULARS 2015 Levels (Proposed) % Share

Budgetary Support to

Government-Owned or-Controlled Corporations orGOCCs includes subsidiesfor GOCC operations, equityinfusion, and net lendingto advance the paymentof national government-guaranteed debts of GOCCs.Total budgetary support toGOCCs in 2015 will amountto P89.2 billion, an increaseof 23.5 percent over the 2014allocation.

Personnel Services areexpenses for salaries, wages,and other compensationof permanent, temporary,contractual, and casualemployees of the government.The 2015 Budget will allocate29.2 percent for the paymentof government personnel.

Allocations for Local

Government Units or LGUsrepresent the Internal RevenueAllotment and other legallymandated shares in nationalrevenues and capital transfers.For 2015, a total of 371.1 billionwill be allocated to LGUs,including capital transfers.


14/60

14

Department of

Education1

Department of

National Defense3

Department ofSocial Welfare and

Development4

Department ofAgriculture5

Department of

Environment andNatural Resources3

P 365.1 B

P 144.0 B

P 109.0 B

P 88.9 B

P 21.3 B

17.9 %

30.7 %

11.1 %

11.0 %6

1

3

5

7

9

TOP 10 EXECUTIVE DEPARTMENTS

These 10 departments of the

executive branch have the largest

budgetary allocations to support

the delivery of crucial programs and

projects for inclusive development.

16.9 %

Department of Public

Works and Highways2

Department of Interio

and Local Governmen

Department of Health

Department ofTransportation andCommunications2, 4

Department of Sciencand Technology4

P 300.5 B

P 141.4 B

P 102.2 B

P 59.0 B

P 19.4 B

36.7 %

12.6 %

20.9 %

47.7 %

2

4

6

8

10

3.9 %

Notes:

The figures indicated here are the all-in budgets of

these agencies: their agency-specific budgets plus

allocations from the following special purpose funds:

1Inclusive of School Building Program and transfersfrom MPBF

2Inclusive of budgetary support to attachedcorporations

3Inclusive of transfers from MPBF and PGF

4Inclusive of transfers from MPBF

5Inclusive of budgetary support to attachedcorporations and budgetary support to NFA, PCA, FPA,

and NIA

6The reduction is due to DENRs lower PS requirementsbecause of completed rationalization program, and

lower requirements for cadastral survey and geo-hazard

mapping activities

Allocations for Constitutional Offices Other Notable Allocations

P 20.3 B P 46.4 B

P 26.7 B

P 11.1 B

P 16.9 B

P 8.2 B

4.9 % 14.4 %

30.1 %

0.2 %

487.1 %

3.1 %

The Judiciary State

Universitiesand Colleges

Autonomous

Region for

Muslim

Mindanao

Congress

(House and

Senate)

Commission

on Elections

Commission

on Audit


15/60

COMPOSITION OF THEPROPOSED NATIONAL BUDGET

The 2015 National Expenditure Program of P2.606 trillionis composed of P1.740 trillion in programmed new generalappropriations being proposed to Congress for approval, and

P866.2 billion in automatic appropriations already authorizedby a standing law. Programmed new general appropriations arefurther broken down into P1.361 trillion for departments andagencies and P378.6 billion for Special Purpose Funds.

Programmed New General Appropriations 1,740

Departments and Agencies 1,361

Special Purpose Funds 61.3

Automatic Appropriations 866

Total 2,606.0

IN BILLION PESOS 2015

Disaggregated SPFs 330.5

Budgetary Support toGovernment Corporations

61.3

Allocations to LGUs (MMDA) 2.0

E-Government Fund 1.0

International Commitments Fund 7.4

Miscellaneous Personnel Benefits Fund 118.1

Pension and Gratuity Fund 140.6

Lump-Sum SPFs 48.1

National Disaster Risk Reduction andManagement Fund

14.0

Contingent Fund 2.0

Rehabilitation and Reconstruction Program 1.0

Allocations to LGUs (Special Shares, etc.) 31.1

Special Purpose Funds 378.6


These are called programmed appropriations as theseare supported by projected revenues from existing sourcesidentified by the Executive in the Budget of Expendituresand Sources of Financing (BESF) that it submits annuallyto Congress in line with the Constitution (see page 17-18 onFinancing the Proposed Budget).

SPFs are items in the National Budget allocated for a

specific purpose. They are usually lump sums in nature

because recipient departments only identify the specific

programs and projects during the budget execution.

They are released to agencies after conditions have been

complied with.

What are SPFs?

assistance to government-owned or controlled corporations(GOCCs) in the form of subsidies for the GOCCs operationsand for the implementation of key programs and projects, aswell as equity infusion. The National Expenditure Programdetails the specific GOCCs and the programs and projects to befunded, with accompanying performance indicators.

supports governments commitments to internationalorganizations, such as membership contributions (e.g. UnitedNations, Open Government Partnership) and the hosting ofinternational conferences.

Budgetary Support to Government Corporations

DISAGGREGATED SPFS

for the implementation of strategic Information andCommunications Technology projects that enhancetransparency, accountability, and efficiency in the government.Mechanism to access this fund can be found in JointMemorandum Circular 2012-01.

E-Government Fund

International Commitments Fund


16/60

16

subsidy for local government units (LGUs) correspondingto their legal shares in national revenue collections, such astobacco excise taxes. This fund also includes the agency budgetof the Metropolitan Manila Development Authority, amountingto almost P2 billion.

For interest payments that the national government incurs froforeign and domestic borrowings.

For the share of the national government in the premiumpayments to the Government Service Insurance System (GSIS

for the life insurance and retirement benefits of governmentemployees.

Advances by the national government for the servicing ofgovernment guaranteed corporate debt during the year, netof repayments on such advances. Includes loans outlays orproceeds from program loans re-lent to GOCCs.

for responding to natural calamities, epidemics, crises resultingfrom armed conflicts, and other catastrophes. Releases mayonly be made upon recommendation of the National DisasterRisk Reduction and Management Council (NDRRMC) and theapproval of the President. This fund also covers the PeoplesSurvival Fund (P1 billion).

for requirements of new or urgent projects and activities thatneed to be implemented during the year. All releases requirethe Presidents prior approval.

Allocation to LGUs Debt Service-Interest Payments

Retirement and Life Insurance Premiums

Net Lending

This represents the 40 percent share of LGUs from nationalinternal revenue taxes, as mandated by the Local GovernmenCode.

Internal Revenue Allotment

National Disaster Risk Reduction and

Management fund

Contingent fund

covers the governments program to rehabilitate calamity-afflicted areas and ensures resilience of these areas towithstand future calamities.

Rehabilitation and Reconstruction Program

for personnel-related expenditures, including provisions forfilling up authorized positions and for creating new positions,such as teachers and uniformed personnel.

Miscellaneous Personnel Benets Fund

covers (a) pensions of police, military, and other uniformedpersonnel, and (b) retirement and terminal leave benefits,separation benefits and incentives, and monetization of leavecredits of government employees who are retiring.

Pension and Gratuity Fund

DISAGGREGATED SPFS

Automatic Appropriations are authorizations made by

law or other legislative enactment directing payment

out of government funds under specific conditions and

purposes. Unlike new general appropriations, which are

submitted annually to Congress for approval, these do

not require periodic action from the legislative branch.

For 2015, a total of P866.2 billion will be allocated for

automatic appropriations.

Automatic Appropriations

Internal Revenue Allotment 398.9 B

Debt Service-Interest Payments 372.9 B

Retirement and Life Insurance Premiums 30.1 B

Net Lending 26.5 B

Grant Proceeds 141 M

Tax Expenditure Fund 25.5 B

Special Accounts in the General Fund 21.2 B

Pension of Ex-Presidents and their Wives 331,000 M

AUTOMATIC APPROPRIATIONS 2015


17/60

Non-repayable transfers received from foreign entities (e.g.foreign governments, multilateral organizations, etc.) given forparticular projects or programs, or for general budget support.

Covers subsidies given to agencies, GOCCs, and LGUs in lieuof actual payment of taxes and customs duties. This fund doesnot involve actual cash disbursements.

A fund whereby proceeds of specific revenue measures andgrants earmarked by law for specific priority projects are

recorded.

For the pension of former presidents and their spouses at theend of their incumbency, as mandated by RA No. 5059 and ENo. 145.

Grant Proceeds

Tax Expenditure Fund

Special Accounts in the General Fund

Pension of Ex-Presidents and Wives

For 2015, a total of P123.1 billion in unprogrammedappropriations is being proposed. Because this is a standbyfund, this is not included in the computation of the totalBudget: thus, the P2.606 trillion proposed Budget for 2015does not include the proposed amount for unprogrammedappropriations.

Windfall Revenues come from: Excess revenue collections from any non-tax revenue

source New revenue sources not originally considered in the

BESF Loan proceeds from newly-approved loans for foreign-

assisted projects

The National Expenditure Plan submitted for the

approval of Congress also includes unprogrammed

appropriations. Unlike programmed appropriations,

unprogrammed or standby appropriations can only be

used when there are windfall revenues in excess of the

governments revenue program for the year as reflected

in the BESF.

Unprogrammed Appropriations

Budgetary Support to GovernmentCorporations

5.1

Support to Forign Assisted Projects 3.1

Support for Infrastructure Projects and SocialPrograms

20.0

AFP Modernization Program 10.0

Risk Managaement Program 30.0

General Fund Adjustments, including ARMMshare

1.0

Equity value buy-out of the MRT 53.9

Total 123.1



18/60

18

The expected GDP growth of 6.5 to 7.5 percent for 2014 will provide the impetus for the Philippine economy to post

a 7.0 to 8.0 percent growth in 2015 and a 7.5 to 8.5 percent growth toward 2016. The Aquino Administration remain

confident in reaching this goal, as the countrys GDP grew by an outstanding 7.2 percent in 2013, even with the impa

of Super Typhoon Yolanda. Drivers of growth for fiscal year 2015 include new investments, the resurgence of the

manufacturing sector, a buoyant international and domestic tourism, stronger exports, and improved external trade

conditions.

The 364-day T-bill Rate refers to the benchmark interestrate on Treasury Bills issued by the national government togenerate funds. An increase in the rate will raise governmentrevenues due to taxes on interest income; however, it alsoincreases the government debt burden because of additionalrequirements for interest payments.

The Foreign Exchange Rate refers to the rate at whichthe Philippine Peso is exchanged for another currency, morecommonly with the US Dollar. Any change in the ForEx ratecorrespondingly changes the Peso cost of expenditures paidin US Dollars, most notably foreign debt payments, interestpayments, and revenue collection, through higher customs ta

GDP Growth Rate refers to the growth of the domesticeconomy, as adjusted for inflation. It can affect governmentrevenues: higher GDP generally results in a larger tax base andhigher revenue collections domestically.

Inflation Rate is the increase in the price of goods andservices. It affects revenues: higher inflation means higherprices of taxable products. The inflation rate is also abenchmark for possible increases in the government agenciesexpenditures resulting from higher cost requirements.

FINANCING THE2015 PROPOSED BUDGET

Macroeconomic Assumptions

2010 2011 2012 2013 2014

Adjusted

2015

Propose

2010

45.11

2011

43.30

2014

Adjusted

42.0-45.0

2015

Proposed

42.0-45.0

2012

42.25

2013

42.45

2010

4.3

2011

2.4

2012

2.0

2013

0.7

2014

Adjusted

1.5-4.0

2014

Proposed

2.0-4.0

3.7

7.27.5

8.0

7.0

6.5

3.9

4.6

3.2 3.0

5.0

4.0

2.0

3.0

7.6

6.8

GDP GrowthRate

Inflation Rate


19/60

283.2.0%

of GD

The government seeks to sustain a manageable deficit

level equivalent to 2 percent of GDP, or P283.7 billion.

This enables the government to spend within its means

while increasing investments on priority programs and

projects. To achieve this, reforms to increase revenues

and improve debt management are being pursued.

Macroeconomic Assumptions

32011 to 2013 are actual figures.

4Programmed

5Estimated Program per National Budget Memorandum 119

1,522.4

1,777.8

2,284.3

1,880.2

2,662.6

1,557.7

242.82.3%

of GDP

266.22.0%

of GDP

1,207.91,359.9

1,716.1

2,337.3

2010

2012

2014

2011

2013

2015

FISCAL PERFORMANCE (in Billion Pesos)

Revenue

Disbursement

Deficit

197.72.0%

of GD

164.1.4%

of GD

1,534.9

2,018.1

314.53.5%

of GDP


20/60

20


21/60

EXPENDITURE

PRIORITIESSince it assumed office in 2010, the Aquino

Administration has been reshaping government budget

priorities to support inclusive development. This 2015

Proposed Budget invests in the countrys greatest

resourcethe peoplenot only by allocating more

resources into priority social and economic programs

but also by ensuring that government interventions are

tailor-fitted to the specific needs of the poorest and most

vulnerable localities.


22/60

22

The 2015 Proposed Budget seeks to focus limited government resources

on providing adequate and well-targeted social protection and basic social

services to the people, especially the poor and vulnerable. The Budget also

aims to facilitate the development of key industries that create more jobs and

livelihood opportunities.

In crafting the 2015 Proposed

Budget, departments and agencieswere tasked to prioritize the 44

poorest and most vulnerable

provinces and to tailor-fit programs

and service delivery strategies

according to their needs.

Priority Programs Geographic Focus Areas

This Proposed Budget seeks to reducepoverty incidence to 16 percent aspart of the Millennium DevelopmentGoals (MDGs) by expanding key socialprotection and social services, such asuniversal healthcare, education, andsocialized housing.

These are provinces where greateconomic opportunities are abundant

but cannot be accessed by thepoor. Aside from creating more jobopportunities in these areas, we will alsconnect their growth centers to areasthat are lagging behind. Certainly, wewill invest in capacitating their people tco-create wealth.

These are smaller, less-populated, andoftentimes remote areas that have beedisconnected from growth opportunitie

As we ensure adequate social safetynets in these provinces, we will unlockthe employment generation potential osectors such as tourism and agricultureWe will also invest in infrastructureprojects that not only create jobs forlocals but also connect these areas tomarkets more efficiently.

The earthquake that shook CentralVisayas and Super Typhoon Yolandathat hit late last year taught us a painfulessonour people can slide into deeppoverty when calamity strikes. Boldsteps will be taken to protect the 28provinces most vulnerable to climatehazards. As we rebuild these disaster-devastated areas, we will redevelopor resettle communities locatedin vulnerable areas, diversify theirsources of income, and undertake thenecessary actions to climate-proof thecommunities.

This Proposed Budget aims to sustainthe countrys robust economicperformance and create more jobsby investing in strategic transport

infrastructure, bolstering agriculturalproductivity, reviving the manufacturingsector, and maximizing the tourismsector.

Social Protection andSocial Services

Provinces withhigh poverty magnitude

Provinces withhigh poverty incidence

Provinces with high vulnerabilityto shocks and disasters

Economic Expansion andJob Generation

This Proposed Budget seeks tomanage disaster risks by investingin a countrywide climate changeadaptation and risk resiliency program.The Proposed Budget is also aimed atbuilding back better the communitiesravaged by recent calamitiesby bolstering rehabilitation andreconstruction efforts.

Climate Change andDisaster Risk Reduction

Underlying all these programs is theneed to establish an environment ofpeace and the rule of law as well asof good governance. The 2015 Budget

sustains government policies andinvestments in achieving such goals.

Enabling Environment forInclusive Development


23/60

LIST OF PROVINCES:

1.

2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20.21.22.23.24.25.26.27.28.29.30.

31.32.33.34.35.36.37.38.39.40.41.42.43.44.

Ilocos Norte

Ilocos SurPangasinanAbraApayaoBenguetCagayanIsabelaNueva ViscayaQuirinoAuroraPampangaZambalesCaviteLagunaQuezonRizalAlbayCamarines SurCatanduanesMasbateAntiqueIloiloNegros OccidentalBoholCebuEastern SamarLeyteNorthern SamarSouthern Leyte

Zamboanga del NorteZamboanga del SurZamboanga SibugayCamiguinDavao del SurNorth CotabatoSarangganiAgusan del SurDinagat IslandsSurigao del NorteSurigao del SurLanao del SurMaguindanaoSulu

High Poverty Incidence High Poverty Incidence + Disaster Risk

High Poverty Magnitude High Poverty Magnitude + Disaster Risk

High Disaster Risk

1

4

2

6

14

12

3

13

9

15

44

17

10 11

16

22

31

19

23

24

33 32 42

43

20

25

18

21

27

38

40

39

41

35

29

28

30

34

36

37

26

5 7

8


24/60

24

The Aquino Administration continues to invest in the countrys greatest resourceits people. Thus, the 2015 Budge

prioritizes social protection and basic social services that substantially reduce poverty incidence and empower the

poor to be productive.

For Poverty Reduction and Human Development, the Aquino Administration will prioritize investments that help us meet our MDof reducing poverty incidence to 16 percent by 2015 while sustaining equal opportunities for all.

SOCIAL PROTECTION ANDSOCIAL SERVICES

Social Protection

An amount of P17.5 billion will fund theKALAHI-CIDSS National Community-Driven Development Project of the

DSWD. This project seeks to empowercommunities in accessing services andparticipating in local planning, budgeting,and implementation. The proposedallocation for 2015 will support 6,735community projects that cater to 1.5million poor households.

Community-Driven Development

The Conditional Cash Transfer (CCT) program is designed to address chronic povertand meet the countrys MDGs. The Aquino Administration will increase the programbudget to P64.7 billion in 2015 from P62.6 billion in 2014.

The Regular CCT Program will have P59.8 billion to continue supporting 4.3 millionpoor families. Of these covered families, the Department of Social Welfare andDevelopment (DSWD) commits to lift 2 million from survival to subsistence, and300,000 from subsistence to self-sufficiency. This budget for the Regular CCTprogram will also be used to support 509,366 children aged 15 to 18 years old as thecomplete high school.

Under the Modified CCT Program, itinerants, homeless street families, and indigenopeople shall be eligible for cash grants, provided that they comply with certaineducation and health conditions. The Modified CCT Program will receive P4.95 billioto provide 126,963 families with education and healthcare grants, as well as otherassistance packages which may include cash-for-work, livelihood assistance, rentsubsidy, and transportation assistance.

Pantawid Pamilyang Pilipino Program

To help provide a sustainable incomefor families who graduate from the CCTprogram, P4.9 billion will be allotted

to the Sustainable Livelihood Programto cover 265,175 family beneficiarieswith micro-enterprise development andanother 113,647 households under theemployment facilitation through capacitydevelopment.

Sustainable Livelihood Program

A budget of P4.8 billion will be allocateto the provision of a monthly social

pension of P500 to 739,609 indigentsenior citizens aged 71 years and aboveThis proposed amount is 53.2 percenthigher than the current years allocatio

Social Pensions for IndigentSenior Citizens


25/60

A total of P40.3 billion for the Pantawid Pamilyang Pilipino Program and other social protection programs1will be

focused on the 44 poorest and most vulnerable provinces.

FOCUS GEOGRAPHIC AREAS:SOCIAL PROTECTION

1These are the Supplemental Feeding Program,Social Pensions for Indigent Senior Citizens, and the

Sustainable Livelihood Program. The amount is net of

administrative costs and other related expenses at the

central office.

2Source: National Statistical Coordination Board (2012)

MILLIONS OF PESOS

2001 - 2500

1501 - 2000

1001 - 1500

501 - 1000

0 - 500

Maguindanao is among the poorestprovinces, with a poverty incidence of63.7 percent in 20122. In this war-tornprovince whose communities havebeen deprived of access to economicopportunities, the government will investa total of P2.57 billion for social safetynets, including:

Conditional cash transfers (4Ps) to187,493 households

Supplemental feeding for 31,702children

Social pensions for 9,055 indigentsenior citizens

Microenterprise support for 8,672families

Employment facilitation for 3,717families

MaguindanaoFeatured Province:


26/60

26

Through the Universal Healthcare

Program, the Aquino Administration

seeks to increase health insurance

coverage, improve accessibility

to healthcare facilities, and help

achieve health-related MDGs.

To reduce out-of-pocket health expensesof the poor, P37.2 billion will be allottedto cover the health insurance benefits of15.4 million indigent families identifiedby the National Household TargetingSystem for Poverty Reduction and 51,901families under different governmentspecial programs, including the Payapaat Masaganang Pamayanan (PAMANA)Program (19,901 families) and theSajahatra Bangsamoro Program (32,000families). The approval of the Sin TaxReform Law in 2013 has increasedavailable resources for health servicesneeded by marginalized Filipinos,

enabling the government to support thehealthcare insurance coverage of half ofthe Philippine population.

The government continues to invest inprograms aimed at meeting the countryMDGs to improve child and maternalhealthcare and reduce public healthdiseases.

To deploy additional healthcareprofessionals to communities, P4.3billion will support the hiring of thefollowing health professionals: 398doctors, 12,540 nurses, 5,749 midwives,and 480 dentists.

A budget of P13.1 billion will be allocatedto rehabilitate and upgrade 1,242barangay health stations, 587 ruralhealth units or city health centers,128 LGU hospitals, 19 hospitals of theDepartment of Health (DOH), and 11treatment and rehabilitation centers toimprove the health care delivery system.

Health InsurancePremium Subsidies

AddressingHealth-Related MDGs

Doctors to the Barrios and RuralHealth Practice Program

Health Facilities EnhancementProgram

Family Planning andResponsible Parenting

MicronutrientSupplementation

Program for 4.4 milliochildren aged 5 yearsand below.

Provision of familyplanning commoditiesto 2.7 million women,and family planningservices to LGUs.

Deployment of 30,407Community HealthTeams to provideinformation andservices to 5.2 million

households that arevulnerable to illnesses

Treatment of PublicHealth Diseasesfor thetreatment of malaria,schistosomiasis, filariasand other public healthdiseases.

P3.3 B

TB Control Programto provide treatment to252,913 new adult TBcases.

P1.1 B

P788 M

Universal Healthcare


27/60

A total of P30.5 billion for various public healthcare3programs will be focused on the 44 poorest and most vulnerab

provinces.

FOCUS GEOGRAPHIC AREAS:PUBLIC HEALTH

Featured Province:

1

This amount represents the sum of the 2015 proposedallocations for healthcare insurance premium subsidies,

the Health Facilities Enhancement Program, the Doctors

to the Barrios and Rural Health Practice Program,

Family Health and Responsible Parenting, Disease

Prevention and Control, Access to Potable Water (DILG-

SALINTUBIG program), and public health allocations

under the ARMM. This amount is net of administrative

costs and other related expenses at the central office.2Source: National Household Targeting System forPoverty Reduction (DSWD)

While Cebu is among the mostprosperous provinces in the country, ithas among the highest number of poorfamilies at 151,425 in 20124. Amongthe priority provinces, Cebu will getthe highest allocation of P1.8 billion forpublic healthcare. Among others, thisbudget will be used to:

Subsidize the health insurancepremiums of more than half a millionresidents,

Construct 122 barangay health stations,

and build or improve other healthcarefacilities,

Deploy 543 healthcare workers,including 422 nurses, and

Construct 6 potable water facilities.

MILLIONS OF PESOS

1601 - 2000

1201 - 1600

801 - 1200

401 - 800

0 - 400

Cebu


28/60

28

To support the K to 12 Program, P52.9billion will cover the construction of31,728 classrooms, 13,586 water andsanitation facilities, and 455 technicalvocational laboratories; the repair of9,500 classrooms; and the procurementof 1.3 million seats.

In line with the continuing modernizatiof the education system, P8.5 billion

will be allocated to the procurement of24,028 ICT Packages.

The Aquino Administration will alsoinvest P9.97 billion in the hiring ofnew teachers by opening 39,066 new

teaching positions and 1,500 non-teaching positions.

For 2015, P3.5 billion will be allocatedto purchase and distribute 70.5 milliontextbooks and instructional materials toall schools nationwide. This proposedamount is more than double the currentyears allocation of P1.7 billion.

The DepEd will continue implementingthe GASTPE with a budget of P8.4billion to benefit 1,082,798 grantees.This program aids deserving students accessing basic education while helpindecongest public schools.

In 2015, P2.0 billion will be provided tosupport 1 million out-of-school youthsunder the Abot-Alam Program.

Basic Educational Facilities

DepEd Computerization

Hiring of Teachers

Textbook andInstructional Materials

Government Assistance toStudents and Teachers in

Private Education

Abot-Alam Program

The Aquino Administration remains

committed to increase investments

in improving access to quality

education. To support the successful

implementation of the K to 12

Program, the 2015 proposed budget

for the Department of Education

(DepEd) of P365.1 billion is 18.0

percent higher than its budget for

this year.

Basic Education


29/60

A total of P15.2 billion for various basic education programs5will be focused on the 44 poorest and most vulnerable

provinces.

FOCUS GEOGRAPHIC AREAS:BASIC EDUCATION

5This amount represents the sum of 2015 allocationsfor Basic Educational Facilities, the provision of

textbooks and other instructional materials, the DepEd

Computerization Program, GASTPE, the Abot-Alam

Program, and allocations under the ARMM. This amount

is net of administrative costs and other related expenses

at the central office.

Lanao Del Sur has the highest povertyincidence rate at 73.8 percent of thepopulation. Clearly, there is a need toimprove the future of children in Lanao DelSur. This is why the 2015 Budget allocatesP959 million to this province for the:

Construction of 575 classrooms andpurchase of 25,875 school furniture

Purchase and distribution of 846,898textbooks and instructional materials

Provision of 287 ICT packages andconnection of 171 schools to the

internet Scholarships for 3,574 students and

teachers under GASTPE Coverage of 16,750 out-of-school

youths under the Abot Alam Program

MILLIONS OF PESOS

801 - 1000

601 - 800

401 - 600

201 - 400

0 - 200

Lanao del SurFeatured Province:


30/60

30

Housing for the Vulnerable Housing for Uniformed Personnel

to the Socialized Housing and FinanceCorporation (SHFC) and NationalHousing Authority (NHA) to relocate atleast 15,862 families in danger zones tosafer areas

The 2015 Budget proposes P100 milliofor the NHA to provide housing for 341families of the uniformed personnel ofthe Armed Forces of the Philippines(AFP), Philippine National Police(PNP), Bureau of Jail Management andPenology, and Bureau of Corrections.

to NHA to provide emergency housingassistance to 26,426 victims ofcalamities

to NHA to relocate 7,215 families tobetter communities

to SHFC to assist 16,500 families inacquiring their own homes

to the Department of Interior and LocalGovernment to provide 472 informalsettler families with housing unitsand 26,367 beneficiaries with rentalassistance

P7.3 B

P736 M

P577 M

P1.0 B

P1.2 B

In 2015, P11.0 billion will be

earmarked to enable poor and

vulnerable families, as well as

dedicated military and other

uniformed personnel, to afford

decent homes.

Socialized Housing


31/60

To create more employment and livelihood opportunities for all, the Aquino Administration must sustain the rapid

growth of our economy while reducing poverty. However, growth alone is not enough; employment-generating

industries such as agriculture, manufacturing, and tourism must be revitalized.

ECONOMIC EXPANSIONAND INCLUSIVE GROWTH

To meet the benchmark infrastructure spending level of 5.0 percent of GDP by 2016, the Aquino Administration will increase theinfrastructure budget by 27.1 percent to P562.4 billion, or equivalent to 4.0 percent of GDP.

Infrastructure Program

The Transport Infrastructure Program seeks to expand the economy by connecting lagging towns to growth centers, link farmsand products to markets, and help bring more jobs and livelihood to people throughout the country. The 2015 Proposed Budgetprovides P227.6 billion for the Transport Infrastructure Program.

Transport Infrastructure

Road Transport

A total of P195.1 billion is being proposed mostly to improve thenetwork of national roads and bridges throughout the country.Of this amount, 174.6 billion will be used by the Department

of Public Works and Highways (DPWH) for its National Roadsand Bridges Program, aimed at paving 97 percent of all nationalarterial and secondary roads and making 99.5 percent ofnational bridges permanent by 2015.

Meanwhile, the Department of Transportation andCommunications (DOTC) is provided with P7.02 billion tobuild integrated road transport systems around Metro Manila,decongest the metropolis, and promote road safety.

DPWH National Roads and Bridges

Pave 2,231 kilometers of national roads

Make 5,231 lineal meters of temporary bridges

permanent

DOTC Projects

P2.1 billion for Road Transport IT Infrastructure P1.18 billion for Integrated Transport System - Sout

P750 million for Integrated Transport System - Nor

P1.3 billion for Cebu Bus Rapid Transit

P174.5 B

P7.0 B

Total Infrastructure Outlays (in PhP billions)

2010

1.8% of GDP

2013

2.7% of GDP

2011

1.8% of GDP

2014

3.4% of GDP

2009

2.2% of GDP

2012

2.0% of GDP

2015

4.0% of GD

180.1165.0

175.4215.7

306.9

442.3

562.3


32/60

32

Rail Transport

A total of P16.9 billion is being proposed to improve railwaysystems and address the needs of the riding public. Keyprojects include the following:

Rehabilitation ofLRT Lines 1 and 2P2.8 B

LRT Line 1 South ExtensionP4.7 B

LRT Line 2 East ExtensionP2.4 B

LRT Line 2 West ExtensionP200 M

MRT 3 transport subsidyP4.7 B

MRT 3 infrastructure outlaysP804 M

PNR repair, restoration, and rehabilitationP747 M

Air TransportThe DOTC will be provided with P13.3 billiona 45.8-percentincrease from the 2014 allocationfor air transportdevelopment. Key airport projects include the following:

Bicol International Airport Development ProjectP1.6 B

Puerto Princesa Airport Development ProjectP1.6 B

Clark AirportP1.2 B

Busuanga AirportP1.0 B

General Santos AirportP959 M

Kalibo AirportP950 M

Iloilo International AirportP791 M

Maritime Transport

The proposed P5.16 billion budget of the DOTC for maritimetransportation supports not only the construction andrehabilitation of seaports but also the improvement of maritimesafety. Key projects include the following:

Construction, development, repair, and rehabilitation of

40 seaportsP1.5 B

Philippine Coast Guard for patrol vesselsP1.9 B

Ozamiz AirportP695 M

Calbayog AirportP678 M

Camarines Sur (Naga) AirportP670 M

Ninoy Aquino International Airport-Capacity

Expansion and Maximization

P592 M


33/60

More than 34 percent, or 9.4 billion, of a total P27.5 billion allocated for various transport infrastructure developmen

programs6, will be focused on the 44 poorest and most vulnerable provinces in 2015.

FOCUS GEOGRAPHIC AREAS:TRANSPORT INFRASTRUCTURE

6This amount represents the sum of 2015 allocationsfor air transport and maritime transport. The amount

unfortunately does not yet include allocations for

roads and bridges under DPWH as the province-level

breakdown was not yet available as of press time. This

amount is net of administrative costs and other related

expenses at the central office.

MILLIONS OF PESOS

2001 - 2500

1501 - 2000

1001 - 1500

501 - 1000

0 - 500

A province of promise and prosperity,Surigao del Norte is also among theprovinces most vulnerable to climatechange. A total of P2.12 billion will beallocated to optimize the provinceseconomic potential through world-classinfrastructure, including the constructionand rehabilitation of the Siargao andSurigao airports, as well as the seaportsin Dinagat, San Benito, and Pilar.

Surigao del NorteFeatured Province:


34/60

34

The Agricultural Development Program seeks to make the agriculture and fisheries sector more competitive and

productive, and to empower farmers, fisherfolk, and other stakeholders to improve their incomes. Under the 2015

Budget, the Agriculture Development Program will receive a total of P84.4 billion, which includes the following

investments.

Agricultural Development

Agriculture Commodity Support Agriculture Infrastructure

A total of 21.7 billion will be invested inthe various programs of the Departmentof Agriculture (DA) to promote a morediversified, intensive, high-value, andmarket-oriented crop and livestockproduction.

To improve productivity, reduce costsand improve access of farms to marketthe 2015 Budget will invest in thefollowing agriculture infrastructure:

for the Rice Program to enable theproduction of 20.09 million metric tonsof rice per hectare through productionsupport, research and development, andthe provision of postharvest facilities to1,701 farmer groups.

for Fishery Infrastructure, whichincludes P756 million for theconstruction of fish landing in 252 sitesand P534 million for the establishmentof 26 municipal fish ports.

for the Corn Programto fast track theproduction of 2.75 million metric tonsof white corn, 6.27 million metric tonsof yellow corn, and 3.28 million metrictons of cassava.

for the Livestock and Poultry Program,

to bolster the production of livestock,including 2.1 million metric tons of hogsand 1.72 million metric tons of chicken.This budget will help rural economies bydeveloping enterprises and increasingfarmers income while aiming for globalcompetitiveness.

for the High-Value Crops Program, tosupport agricultural diversification and

to promote the production of high-valuecrops, especially in the poorest areas.This amount shall be used to providethe facilities and equipment neededto produce 2.6 million metric tons ofpineapples, 865,910 metric tons ofmangoes, and 9.17 million metric tons ofbananas, among other high-value crops.

for the Fisheries Program, whichthe Bureau of Fisheries and AquaticResources (BFAR) will use to support theproduction of 2.51 million metric tons offish and other aquatic produce throughresource conservation measures, therebyintensifying fishery resource protectionand law enforcement, investment onpeople, and research and technology.

P7 B

P1.29 B

P2.3 B

P1.53 B

P2.2 B

P4.6 B

for the Coconut Program of thePhilippine Coconut Authority, whichwill be used to help produce 2.81millionmetric tons of coconuts and copra anduplift the well-being of coconut farmers.This budget will cover the construction

P4.1 B

for Irrigation, which will be used by theNational Irrigation Authority to cover20,650 hectares and restore of 23,200hectares of service areas.

P25.98 B

for the construction of 1,616 kilometersof Farm-to-Market Roadsthat connec

farmers, markets, and consumers.

P14.5 B

of farm-to-market roads, the plantingand replanting of coconut trees, thedevelopment of coconut agro-industrialhubs, and the eradication and control ofpests.


35/60

A total of 17.1 billion is allocated for various programs7to boost agricultural productivity and farmers incomes in the

44 poorest and most vulnerable provinces.

FOCUS GEOGRAPHIC AREAS:AGRICULTURE DEVELOPMENT

7This amount represents the sum of 2015 allocationsfor production support services, market development

services, extension support, education and training

services, research and development, irrigation, farm-

to-market roads, and agriculture allocations under the

ARMM. This amount is net of administrative costs and

other related expenses at the central office.

MILLIONS OF PESOS

1201 - 1500

901 - 1200

601 - 900

301 - 600

0 - 300

Isabela is the second top palay producerin the country, and accounts for halfof the Cagayan Valley regions palayproduction. However, the livelihood offarmers in this province are threatenedby the onslaught of typhoons and othercalamities. For 2015, P1.12 billion willbe invested in boosting the agriculturesector of Isabela, including:

Irrigation services for 98,952 hecatares 27 agri-based enterprises supported

by the Small Enterprise TechnologyUpgrading Program

IsabelaFeatured Province:


36/60

36

In terms of development, some areas are still literally left in the dark. The 2015 proposed budget will provide P2.1

billion for the Rural Electrification Program to provide far-flung communities a brighter future. Key programs include

the following:

Rural electrication

National Electrification Authority (NEA)

Sitio Electrification Program

NEA Barangay Line

Enhancement Program

2,308 sitios P 1.5 B 111 barangays P 400 M 25,000 households P 115.9 M

Sitio Electrification, Barangay Line Enhancement and Solar Electrification

under the PAMANA Program

DOE to electrify households in off-grid

areas using renewable energy systems

P 103 M 5,400 households P 84.7 M

Of this total amount, P1.2 billion or 56.9 percent will be focused on the 44 poorest and most disaster-prone provinces. For instanconly 56 percent of Masbate is reportedly energized. Thus, P104 million will be used to bring electricity to enhance the powerconnection of 23 barangays and bring electricity to 30 sitios in the said province.

Department of Energys (DOE)

National Intensification of Household

Electrification Program


37/60

The resurgence of the manufacturing sector has significantly contributed to the countrys robust GDP growth in

recent years. To bolster the sectors expansion and job generation capacity, the 2015 Budget provides a total of

P240.0 billion for the Manufacturing Resurgence Program.

Of this total amount, 95 percent will be used for transport infrastructure improvement to reduce the cost of transporting products(see Transport Infrastructure Program, page 29). The remainder will support various programs to support industries, including:

Manufacturing Resurgence

P874 million for the Department of Trade and Industry (DTI)to boost the development and the employment generationpotential of 100,084 micro, small, and medium-scaleenterprises (MSMEs).

P662 million for the Department of Science and Technology(DOST) Small Enterprise Technology Upgrading Program(SETUP) to provide support to 1,984 firms and help generate

14,710 jobs.

P194 million for the upgrading and development of industrydevelopment plans and policies.

P132 million for the various research and development projecof the DOST- Philippine Council for Industry, Energy, andEmerging Technology Research and Development (PCIEERD)


38/60

38

Tourism remains a strong backbone of our economy. For 2015, the government seeks to attract 8.2 million

international visitors and 51.7 million domestic travelers, employ 6.3 million workers, and increase the industrys

productivity to a 7.8-percent share of GDP.

Tourism Development

To expand the accessibility of tourism destinations to foreignand domestic travelers, the DPWH and the DOTC will continueto improve transportation facilities and linkages throughvarious tourism access roads as well as air and maritimetransport facilities (as included in the Transport InfrastructureProgram, page 29):

To promote the Philippines as a prime tourism destination, P3billion will be earmarked for the tourism promotion efforts ofthe Department of Tourism and the Tourism Promotions Boar

Tourism Infrastructure Tourism Promotions

for the DPWH to construct, widen, and upgrade 966.1kilometers of access roads and 1,228 lineal meters of bridges toairports, seaports, and declared tourist destinations.

P20.0 B

for the modernization and expansion of airports, including theNinoy Aquino International Airport Terminal 1 rehabilitationproject.

P9.94 B

for the improvement of maritime transport facilities.

P275 M


39/60

Many poor provinces have a vast untapped tourism potential that the government seeks to unlock in 2015. Thus, P6

billion for various tourism development programs8will be invested in the 44 poorest and most vulnerable provinces.

FOCUS GEOGRAPHIC AREAS:TOURISM DEVELOPMENT

8This amount represents the sum of 2015 allocationsfor air and maritime transport (note: also included

in transport infrastructure program) and ecotourism

development. Unfortunately, this amount does not

yet include allocations for access roads to tourism

destinations under DPWH as the per-province

breakdown was not yet available as of press time. This

amount is net of administrative costs and other related

expenses at the central office.

MILLIONS OF PESOS

2001 - 2500

1501 - 2000

1001 - 1500

501 - 1000

0 - 500

A province often visited by typhoons andother natural calamities, Albay has greatpotential for tourism with its MayonVolcano and other superb natural touristattractions. Thus, P1.6 billion will beinvested in Albay to build a new airportin Daraga and build seaports in Batanand Rapu-Rapu.

AlbayFeatured Province:


40/60

40

To support the development of a quality workforce suited for the needs of priority industries, the 2015 Proposed

Budget will invest in the provision of technical, vocational, and tertiary education for poor and deserving students.

Developing a Quality Workforce

Technical and Vocational Education Scholarships in Tertiary Education

Modernizing State Universities and Colleges

The 2015 Budget will invest in various scholarship programsof the Technical Education and Skills Development Authority(TESDA) to help students achieve gainful employment:

A total of P7.9 Billion will be allocated to fund various formsof scholarships, grants and financial assistance for deservingstudents who aspire to earn a college degree:

As the Aquino Administration continues to modernize thepublic higher education system, the 2015 Budget provides StateUniversities and Colleges (SUCs) a total of P43.3 billion, 13.8percent higher than the 2014 allocation.

Training-for-Work Scholarship Program

to benefit 210,526 enrollees in business processoutsourcing, semiconductor and electronics,tourism, automotive, and general infrastructure.

Study Grant for Poverty Alleviation of SUCs1

to benefit 40,453 Pantawid Pamilyang PilipinoProgram beneficiaries.

Special Training for Employment Program(STEP)to assist 40,248 beneficiaries

Students Financial Assistance Programs of thCommission on Higher Education (CHED)to benefit 54,208 students with scholarships,grants-in-aid, student loans, and other forms ofinancial support.

Tulong Dunong Scholarship Program2

to assist persons with disabilities, solo parentsand members of cultural minority group.

Department of Science and Technology(DOST)

to benefit 18,479 science and technologyscholars.

P2.5 B

P543 M P763 M

P2.5 B

P2.2 B

1Included in the P43.3-billion total budgetary outlay for SUCs

2Of this amount, 1.5 billion will be under CHED and P988 million will be under SUCs(this is part of the total P43.3-billion outlay for SUCs)

P2.0 B


41/60

The aftermath of Super Typhoon Yolanda has taught the government to shift gear from a reactive approach focused

on disaster rehabilitation and recovery to a proactive approach rooted on prevention and preparedness. The 2015

Budget will support this preventive approach along with activities that aim to fully harmonize climate change

adaptation and mitigation (CCAM) efforts with Disaster Risk Reduction Management actions and interventions.

CLIMATE CHANGEADAPTATION AND MITIGATION

Build Back Better is the NationalGovernments strategy to rebuild andrehabilitate the communities devastatedby Super Typhoon Yolanda in 2013. Tobankroll rehabilitation efforts, a total ofP121.35 billion3was provided under the2014 Budget, while Congress passed aP14.6-billion Supplemental Budget in

2013.

For 2015, a total of P21.5 billion isproposed to support government effortsto respond to calamities and rebuildcommunities affected by disasters:

P14 billionNational Disaster Risk Reduction and

Management Fund(formerly Calamity Fund)

P6.5 billionfor Quick Response Funds lodged under

the budgets of key agencies4

Of this amount, P1 billionwill beallocated to the Peoples Survival Fund

P1 billionfor the Rehabilitation and

Reconstruction Fund5

Build Back Better

3This includes P20 billion for the Rehabilitation and Reconstruction Program, P13 billion for the National Disaster RiReduction and Management Fund, P4.5 billion for Quick Response Funds under key agencies, and P83.5 billion unde

the Unprogrammed Fund for reconstruction, disaster relief and mitigation, and the Peoples Survival Fund.

4DA, DepEd, DOH, DND, DPWH, DSWD, DOTC, and NIA

5This special purpose fund was retained in the 2015 Budget, but with a smaller amount, to enable the governmentto augment funds for rehabilitation and reconstruction efforts when warranted by conditions. Of the P20-billion fund

for2014, only P5 billion has so far been released. The remaining P15 billion will be used to frontload recovery and

rehabilitation needs for 2015.


42/60

42

To strengthen the countrys

resilience to climate risks, the

Aquino Administration will focus

on strengthening the natural

ecosystems of the country and the

adaptive capacity of government

institutions and communities.

Risk Resiliency Program

To help mitigate flooding in the 18 majorriver basins and in the areas below sealevel, the DPWH will intensify its floodcontrol and drainage projects through itsbudget of P44.84 billion.

The 2015 Budget invests in variousprograms that enable the governmentto better manage air and water pollutioand solid wastes:

To enable the government to bettermanage geohazards, the 2015 Budgetwill invest in the following mapping andgeohazards assessment activities:

To improve carbon sequestration and

reduce downstream flooding andsoil erosion in the country, P7 billionwill be allocated to the NationalGreening Program of the Departmentof Environment and Natural Resources(DENR). This budget shall cover300,000 hectares with 222 millionseedlings under this program.

Flood Control Infrastructure

Environmental Management

Mapping and GeohazardsAssessment

National Greening Program

P398 million for theUnified Mapping Projectof NAMRIA, to produce1,500 image maps thatcover 360,000 hectares,including 18 river basins.This mapping projectwill provide up-to-dategeospatial information for

zoning and developmentto prevent propertydamage and reducedeaths during naturaldisasters.

P17 million for thePhilippine Instituteof Volcanology andSeismology to upgrade itswarning systems throughthe installation of 240intensity meters and 19tsunami wave detectors,among others.

P1.15 million forthe Project NOAH(Nationwide OperationalAssessment of Hazards)of the DOST to generate3D image hazard mapsthrough Light Detectionand Ranging (LiDAR)

technology.

P89 million for theNational GeohazardsAssessment Programto enable the DENRMines and GeosciencesBureau to update itsdata and assess localvulnerabilities in 70 citiesand municipalities and166 coastal communities.

Air Quality ProgramP139 M

Clean Water Program-Ado

an Estero Program

P99 M

Ecological Solid Waste

Management Program

P86 M


43/60

A total of P3.2 billion for the National Greening Program will be invested in the 40 poorest and most vulnerable

provinces. Of this amount, P2.1 billion will be focused on the 29 provinces most vulnerable to climate shocks and

disasters.

FOCUS GEOGRAPHIC AREAS:NATIONAL GREENING PROGRAM

9Source: National Household Targeting System forPoverty Reduction, 2012

MILLIONS OF PESOS

281 - 350

211 - 280

141 - 210

71 - 140

0 - 70

Quezon is among the provinces mostfrequented by typhoons each year,and has a very high number of poorhouseholds at 122,1399. The governmentwill invest P199 million in planting 9.8million tree seedlings across 8,588hectares of land, in maintaining andprotecting 29,810 of forest land, andin hiring and deploying 87 extensionofficers.

QuezonFeatured Province:


44/60

44

For inclusive growth to thrive and prosper, an environment of social stability must be established. Thus, the 2015

Proposed Budget invests in an enabling environment of just and lasting peace, security, and the prevalence of the rul

of law.

JUST AND LASTING PEACEAND THE RULE OF LAW

Since the beginning, the Aquino Administration has been sowing the seeds of lasting peace and development through the peacefsettlement of armed conflicts and the provision of services in communities made vulnerable by violence.

Peace and Development

Supporting the BangsamoroPeace Agreement

With the signing of the ComprehensiveAgreement on the Bangsamoro (CAB)and in anticipation of the approval ofthe Bangsamoro Basic Law, an initialamount of P2.7 billion is proposed forthe implementation of various socio-economic programs to support the peaceagreement with the MILF:

In addition, P228 million will be allocatto the establishment of various officesand units required for CAB Annex on

Normalization.

Auxiliary social services for

PWD combatants

Agri-enterprise support program

Sustainable livelihood program

Agricultural developmentsupport: small waterimpounding projects, farm-to-market roads, farm inputs andmachineries, etc.

Cash-for-work andCash-for-training

Construction and renovation ofcommunity-based infrastructure

P950 million for various socialservices (DSWD):

P231 million for livelihooddevelopment and literacy programs(DepEd)

P50 million for health insurance(DOH-PHIC)

P16 million for scholarship program(CHED)

P880 million for agriculture support(DA)

P335 million for technical vocationaltraining (TESDA)


45/60

PAMANA

The Aquino Administration continues to implement PAMANA to foster peace and development throughout the country. For 2015the program will receive a budget of P7.3 billion to support the delivery of various programs in conflict-torn areas:

for communityinfrastructure andsupport

for communityinfrastructure andsupport

for electrificationprojects

DILG

DSWD

DOE & NEA

P3.1 B

for roadconstruction

for support toindigenous people

for reforestation

DPWH NCIP

DENR

P519 M P62 M

for health insuranpremiums

for study grants

PHIC

CHED

P48 M

P9 M

P200 MP760 M

P100 M

for community-driven development

DA & ARMM

P2.5 B


46/60

46

The proposed Budget for

2015 supports the Aquino

Administrations bid to improve the

capability of law enforcement and

defense forces to promote the rule of

law and defend national security.

Modernizing LawEnforcement and

Territorial Defense

Public Order and Safety

Armed Forces Modernization

The government has the responsibilityto ensure the safety of its citizens. Forone, the PNP commits to limit crimeincidence to 37.11 percent and meet acrime solution efficiency rating of 29.99percent. To support its modernizationefforts, the PNP will be given a budgetof P2 billion to purchase 5 gunboats, 2fixed-wing aircraft, and 13,330 firearms.

The AFP commits to protect the sovereignty of the country and support thenormalization of 17 provinces by ensuring the coverage of 33 percent of the airdomain and 18 percent of the maritime domain. To purchase additional militaryequipment, P20.0 billion will be allocated to the AFP Modernization Program.

The Bureau of Fire Protection (BFP)commits to limit fire incidents to oneper 10,000 population and casualties tone per 200,000 population. The BFPwill be provided a budget of P 8 billion strengthen its firefighting and emergenresponse through the construction of110 fire stations and purchase of 116 firtrucks, among others.

33%

18%

5

2

13,330

20 B


47/60

Justice delayed is justice denied.

Although common, this notion

must now be changed. As such, the

government will ensure the speedy

delivery of justice, regardless of

ones status in society.

Strengthening Deliveryof Justice

Resolution of Cases

Witness Protection

Legal Services for Indigents

The Supreme Court of the Philippinesand the Lower Courts will be given atotal budget of P18.1 billion, of which willbe utilized by the high court in achievinga turnover of 416,466 casesin 2015.

To ensure the integrity of testimonies incourt, the Witness Protection Program

of the Department of Justice will receiveP190.7 million to support 680 witnesses.

Meanwhile, the Public Attorneys Officwill be given a budget of P1.9 billion forthe provision of legal services to indigecitizens in 751,896 cases.


48/60

48

Good governance has been the core of the Aquino Administration since it assumed office in 2010. Participation,

transparency, and accountability in the public financial and auditing processes; assisting our local government in

capacity development; and providing rapid and efficient public service delivery are just some of the steps in ensuring

that no one is left behind in the road to inclusive development.

GOOD GOVERNANCE ANDANTI-CORRUPTION

Anti-corruption Frontline Service Delivery

To fight the incidence of corruption,the Office of the Ombudsman will beallotted P543 million for its continuedefforts to investigate anomalies andstrengthen the integrity of our publicinstitutions. A total of 18,913 complaintsand grievances will be acted upon.

Meanwhile, the Sandiganbayan willreceive a budget of P295 million to be

spent on the adjudication of 3,796 graftand corruption cases, 418 of which willbe disposed by the end of 2015.

Department of Foreign Affairs will beallocated P10.0 billion for its consularservices, including the processing of 3.2million E-passports.

Of the P1.1 billion allocation for NBI,P193 million will be set aside for theprocessing of 5.5 million NBI clearancesfor 2015.

Business Regulation

The 2015 Budget sustains thegovernments efforts to simplify businetransactions in the country. The BusinePermits and Licensing System of theDepartment of Trade and Industry (DTwill be allocated P9 million to increasethe number of LGUs compliant with BPto 1,500.

Meanwhile, the Philippine Business

Registry (PBR) will be allocated P5.9million to establish a centralizedbusiness registration database. The PBwas initiated by the Department of Traand Industry, Securities and ExchangeCommission, Bureau of Internal Revenu(BIR), Home Development Mutual FunPhilippine Health Insurance Corp, andSocial Security System.


49/60

LGU Capacity Development Clean and Fair Elections

The LGU Capacity DevelopmentProgram of the DILG aims to improve

local governance and provide additionalsupport for the implementation ofrelevant projects. This program alsocreates a link among other LGUs andkey stakeholders, such as civil societyorganizations (CSOs).

The 2015 Budget will support thepreparations for the 2015 and 2016

Elections. A total of P11.4 B will beallotted for the acquisition of 41,800Precinct Computerized Optical Scanmachines and for the augmentation ofthe existing 80,000 units as per therecommendation of the COMELECAdvisory Council. This amount willalso cover 116,000 units of biometrictechnology and other additionalhardware. In addition, P1.1 billion will beset aside for the Sangguniang Kabataanelections in 2015.

For 2015, the LGU CapacityDevelopment Program of the DILG willbe allotted P3.1 billion. This will supportthe implementation of the Seal for GoodHousekeeping, the Local GovernmentPerformance Management System,and the Performance Challenge Fund,which incentivize LGUs that exhibit good

performance.


50/60

50

As the Aquino Administration

embarks on a new journey toward

inclusive development, it will

continue the proper management

of public finances to ensure a

transparent and accountable

administration.

Public Financial Management(PFM)

Revenue Administration

Auditing Services

PFM Reform Program

The DOF, through the BIR and Bureauof Customs (BOC), will continueimplementing revenue administrationreforms to ensure that right revenues

are collected, and to bring tax evaders,smugglers, and their collaborators in thebureaucracy to justice.

To ensure the accountability ofgovernment finances, the Commissionon Audit (COA) will be providedP2.6 billion for its government auditingservices. This budget will enable thecommission to conduct financial,compliance, and other audits in 23,973agencies; special audits in 25 agencies;and fraud audits in 25 agencies.

The COA will receive P5.9 million toimplement the Citizens ParticipatoryAudit program, an internationally-awarded reform that promotes citizensparticipation in the conduct of publicaudit.

Initiated by the DBM, together withthe DOF, Bureau of Treasury, and COA,the PFM Reform Program consists ofmajor reforms that seek to ensure thetransparent, efficient, and accountablemanagement of government finances

P179.6 million for the DOFspublic sector financial resourcesmanagement services. This includesthe implementation of the RevenueIntegrity Protection Service, which willinvestigate 72 personnel in 2015.

P5.6 billion for the BIRs tax collectionservices. This, among others, will helpin reaching a target revenue of P1.7

trillion, and support the Run After TaxEvaders program, where 36 cases willbe filed in 2015.

P1.7 billion for the BOCs collection ofduties and taxes.This, among others,will support the BOCs target revenuecollection of P456 billion, and ongoing

organizational reforms, including theintensification of the Run After TheSmugglers campaign.

(see page 52 for a comprehensivediscussion on budget reforms).

Under the 2015 Budget, P229.3million will be provided for theGovernment Integrated FinancialManagement Information System(GIFMIS), a centralized database forall financial transactions. Moreover,P726.6 million will be provided for theTreasury Single Account, a system thatenables government to improve cashmanagement.


51/60

The Aquino Administrations Budgetreform agenda began with theintroduction of zero-based budgeting(ZBB) to curb spending on inefficientand ineffective programs, and to ensurethe proper allocation of scarce resources.

Since it assumed office, the AquinoAdministration has been institutingvarious reforms to ensure that eachpeso is spent within the governmentsmeans, on the right priorities, andwith measurable results. As it pluggedleakages, improved the efficiencyof public spending, and boosted theeffectiveness of service delivery,the Administration also enshrinedthe empowerment of citizens at theheart of public finance by promotingtransparency and citizens engagement.

The Aquino Administrations pursuitof budget reforms in its first years inoffice enabled the country to achieveunprecedented feats.

Spending within our means

Spending on the right priorities

The Aquino Administrations doggedness in pursuing fiscal consolidationthat is,to keep governments finances in a stable condition and to reduce the governmentsindebtednesshas paid off. Bold reforms in tax administration, the aggressivecampaign against tax evaders and smugglers, and strategic debt managementenabled the government to keep its fiscal deficit to 2 percent of GDP, and to reducethe debt stock to 49.2 percent in 2013 from 52.4 percent in 2010.

The Aquino Administration has dramatically reshaped the allocation of the Budget t

support its Social Contract with the Filipino People. In 2004, the debt burden ate upthe lions share of national government expenditures at almost 30.8 percent while thshares of the social and economic service sectors only reached 28.9 percent and 19.percent, respectively. In 2014, the debt burden dwindled to a measly 16.7 percent ofthe Budget; while social and economic services were boosted to 37.2 percent and 26percent.

The revived stability of the governments finances earned the renewed trust andconfidence of the investing public, as demonstrated by the investment-grade creditratings that the Philippines has recently obtained from top credit ratings agencies.

Ang Budget po ang

pinakamalinaw na

pagsasabuhay ng atingtuwid na landas.

President Benigno S. Aquino III,

FIFTH STATE OF THE NATION ADDRESS

THE AQUINO BUDGET TRANSFORMATION AGENDA:BUILDING ON GAINS AND SUSTAINING THE MOMENTUM

2005

62.7

2009

52.5

2013

47.0

2007 2011

49.3

20

45

2006

58.1

2010 2014

46.1

2008

53.6

2012

51.9

58.0

51.7

2005

4.5

3.1

5.3

2009

5.15.1

5.0

3.5

2013

6.2

4.5

2.9

2007 2011

5.6

3.8

3.1

20

6

4

2

2006

4.5

3.5

4.9

2010 2014

6.6

4.6

2.9

2008

4.8

4.8

4.7

3.7

2012

5.6

4.6

3.2

4.64.3 4.34.0

4.6

4.2

3.4

Outstanding Debt (as % of GDP)

Social Services (as % of GDP)

Economic Services (as % of GDP)

Debt Burden (as % of GDP)


52/60

52

Spending with measurable results

With the Aquino Administrations effortsto ensure that each peso is spent ina timely manner and with maximumimpact, the Philippine economy grewby an outstanding 7.2 percent in 2013,among the fastest in Asia. Governmentsspending priorities are also finallymaking a dent on poverty incidence,which declined from 28.6 percent in thefirst semester of 2009, to 24.9 percent in

the same period of 2013.

Empowerment through scaltransparency and participation

Since the beginning, the AquinoAdministration has sought to empowercitizens in the way public funds are used.For one, it introduced unprecedentedreforms to improve the publics accessto budget information. It introducedpolicies, such as the Transp

Documents

Final Online DBM Proposed Budget 2015