Prioritization of Subsidy Availment

March 1, 1993 FIRB RESOLUTION NO. 001-93 SUBJECT : Prioritization of Subsidy Availment WHEREAS, fiscal effectiveness requires that expenditures be made in activities which can impact meaningfully on development priorities: WHEREAS, fiscal efficiency requires that the subject expenditures be the most economical way of achieving a given development priority; WHEREAS, subsidy provisions as administered by the FIRB are a form of expenditures (in particular, to settle the tax and duty liabilities of government-owned and controlled corporations), which should also conform to the norms of fiscal effectiveness and efficiency; WHEREAS, one of the objectives of the Medium-Term Development Plan is the effective allocation and efficient utilization of public resources, in the light of the public sector deficit and the need to trim it down if only to reduce the unwarranted pressures on already delimited public resources; and WHEREAS, the President has also set a prioritization of expenditures, pursuant to his five priority programs: (1) peace and order; (2) economic recovery and growth; (3) rapid development of the energy sector; (4) people empowerment; and (5) streamlining the bureaucracy; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, that the FIRB shall prioritize its allocation of subsidy availment in accordance with the following sectoral preferences, pursuant to the priority listing of the MTDP and that of the five priority programs of the President: 1. Investments and programs that promote economic growth; 2. Sectors that enhance the provision of basic social services including safety nets; and 3. Activities that cannot be undertaken by either the private or non-government sector, or by foreign investors. BE IT FURTHER RESOLVED, AS IT HEREBY RESOLVED, to impose a cap on the total subsidy availment to be allocated by the FIRB to the foregoing sectoral preferences and in accordance with estimates submitted by government-owned and controlled corporations to the Department of Budget and Management inclusive of pump-priming activities and request for renewal of subsidy availments granted in 1992 but were not availed of therein, in an amount not exceeding P2 . 2 billion for the current budget year. BE IT FINALLY RESOLVED, AS IT HEREBY RESOLVED, that the FIRB shall formulate the details by which to implement the foregoing priorities and adjust the cap, in consideration of meritorious cases, as determined by the FIRB. (SGD.) RAMON R. DEL ROSARIO, JR. Secretary of Finance Chairman FIRB References : FIRB Technical Committee Meeting dated January 29, 1993 FIRB Meeting dated February 26, 1993