Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

House Bill No.__ 2183

Introduced by Rep. Eulogio “Amang” R. Magsaysay

EXPLANATORY NOTE

For the past years, the national government has been providing automatic
appropriation of expenditures in the national budget for payment of principal and
interests on public debts and guarantee of obligation mandated under Section 31
of Presidential Decree No. 1177.

This policy of automatic appropriation of debt and debt guarantee items on
the national budget is one of the conditions set by our foreign creditors. The
House of Representatives, however, can institute a more innovative approach
other than the dictate of foreign creditors. Through this arrangement, they are
virtually taking collateral on their loan exposures from the national budget. A big
slice of the country’s meager budget pie has already been compromised even
before Filipinos can decide on how to allocate it. We are forced to pay loans,
which may have been incurred against the interest of the people like the Bataan
Nuclear Plant.

At least 40% of our country’s annual appropriations go to debt payment.
Providing automatic appropriation for debt and debt guarantee items in the
budget means less available resources for basic social services, as well as
funding for other priority programs of the national government. This practice of
automatic annual appropriation robs the Filipinos of the scarce financial
resources that should instead support the implementation of vital projects such
as education, health, food security and infrastructure, to name a few. Reversal of
this practice would mean better life for the Filipinos.

Our Constitution has vested Congress the power to review, assess and
approve the annual budget. However, the policy of automatic appropriation
circumvents this provision. Decision-making on where the Philippines’ scarce
financial resources should go has, therefore, been virtually taken away from
Filipinos. We surrender our right to self-determination if we allow this practice to
continue. A common man of reason will only see injustice if the food on his table
is taken forcibly by his neighbors. Fortunately or unfortunately, the common man
is the very reason why we are in Congress. Let us not deprive him of our
representation.

This bill, when approved, will reclaim the Congress’ power of the purse. It
will allow Congress to review, assess and approve all budget items proposed by
the Executive, including payment of foreign loans and end the vicious cycle of
borrowing just to pay the interest of existing and/or maturing debts. Prudence
and frugally are virtues that the House of Representatives should be known for
as an inspiration to our people.

In view of the foregoing, support for the early passage of this bill is

eamestly requested. J
é ) YL

EULOGIO “AMANG” R. MAGSAYSAY


FIFTEENTH CONGRESS OF THE)
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

House of Representatives

House Bill No. 2183

Introduced by Rep. Eulogio “Amang” R. Magsaysay

REQUIRING THAT ALL EXPENDITURES FOR THE PAYMENT OF FOREIGN
DEBTS BE INCLUDED IN THE ANNUAL GENERAL APPROPRIATIONS ACT
Be it enacted by the Senate and the House of Representatives of the Philippines

in Congress assembled:

SECTION 1. Automatic Appropriations. — All expenditures for (a)
personnel retirement premiums, government service insurance, and other similar
fixed expenditures, (b) principal and interest on domestic debt, and (c) national
government guarantees of domestic obligations that are drawn upon are hereby
automatically appropriated.

Provided, that the President of the Republic of the Philippines, shall
include in his/her annual budget proposal to Congress the amount of
appropriations recommended to service all foreign loans;

Provided, further, that no obligation shall be incurred and payment made
from funds thus automatically appropriated except as issued in the form of
regular budgetary allotments.

SECTION 2. Repealing Clause. - All acts, laws, executive orders,
presidential decrees, including Section 31 of Presidential Decree No. 1177, rules
and regulations contrary to or in violation of this Act are hereby repealed

SECTION 3. Effectivity Clause. — This Act shall take effect fifteen (15)
days after its publication in the Official Gazette or in at least two (2) national

newspapers of general circulation, whichever comes earlier.

Approved,