The inter-agency Development Budget Coordination Committee also approved an allocable budget for 2008 of P127.3 billion and P233.5 billion by 2009. The proposed priority sectors are infrastructure, education, health and workers’ compensation.

Based on resources and revenues, the government calculates amounts to be spent on projects – such as infrastructure, among others. An allocable budget is determined after forward estimates, which is a system of rolling three-year financial estimates after a budget is passed. The first year of the forward estimates becomes the base for next year’s budget.

For example, according to DBCC recommendations, for 2007 the so-called obligation ceilings in the budget is P1.136 trillion and less the forward estimates of P1.087 trillion, the government will have an allocable amount of P49.6 billion.

Of the amount, the DBCC said P10.3 billion would be allotted for personal services; P9.9 billion for basic education and P1.4 billion for the health sector.

For 2008, the allocable amount for infrastructure is higher at P75.9 billion; personal services P32.1 billion, basic education P18.1 billion and health P1.3 billion. And for 2009, P149 billion will be additional spending for infrastructure development; P55 billion for personal services; P26.8 billion for basic education and P1.9 billion for health.

Given the resources and projects already being implemented, and based on forward estimates of existing budget, the government still has an allocable amount which can be set aside for new projects.

The National Economic Development Authority will approve a list of projects based on the Medium Term Investment Program.

NEDA director general Romulo Neri said the government needs to spend P1.104 trillion or .25 billion in the next five years for infrastructure development.

Neri said among the infrastructure sub-sectors the power segment would need about P222.110 billion from the private sector while transportation and water will need investments of P100.920 billion and P26.340 billion, respectively.

National Government financing for all projects – transportation, power, water, communications and social infrastructures, would be about P171.565 billion under the budget, and P108.976 billion off budget. Of the public-private financing category, NEDA estimates NG share will reach P247.392 billion while private sector’s contribution to total investments costs is P224.172 billion.

In all the total private financing investment costs in the next five years could reach about P352.751 billion and P548.473 billion for projects outside the MTIP.

Capital outlays have a significant impact on economic growth. In the past years the decline in revenues has compelled the government to make cutbacks in public spending.

As a result, NG capital outlays have been pushed down from two percent of gross domestic product in 1997 to only 1.6 percent in 2001 and 1.8 percent in 2005, the lowest in the Asian region.(LCC)