INTRODUCTION
I am pleased to sign into law Republic Act No. 8250 — the p433.8 billion General Appropriations Act (GAA) for 1997 and Republic Act No. 8251 converting the municipality of Las Piñas into a highly-urbanized city.

After months of intensive deliberations, Congress has finally given the executive branch the authority to execute this budget measure that will enable us to carry out our plans and programs for 1997.

Let me congratulate our colleagues in Congress for their thorough-going review of the budget measure we submitted in July.

I wish particularly to commend the House Committee on Appropriations led by its chairman, Representative Rolando Andaya — who, as always, played the pivotal role in shaping the substance of our 1997 appropriations authority.

I must also thank the Senate Finance Committee led by its chairman, Senator Ernesto Herrera — who, although a newcomer to this specific assignment, displayed remarkable expertise.
A MORE TRANSPARENT BUDGET AND THE CPSD
There are new features incorporated in the 1997 budget which I am particularly happy to note.

For instance, I see that the budget document has become even more transparent.

For the first time, this document has a provision which mandates the publication of the list of public-works projects — including school buildings and farm-to-market roads — before these infrastructure projects are even implemented — so that the taxpaying public may monitor their cost-effectiveness and their progress.

The passage of the budget law ensures the continuity of the strong fiscal foundation we have carefully laid out since i took office in 1992; and which began to pay off when we attained, in 1994, the first-ever budget surplus in the fiscal history of the Philippine government.

Ladies and gentlemen —

We have reached another milestone in fiscal management: we have wiped out our consolidated public sector deficit (CPSD).

Last year we not only met our target of balancing the consolidated public sector fiscal position. We in fact exceeded it — by achieving a consolidated public sector surplus of about p2.1 billion.

Our people may not realize it — but the national government’s surplus and the balancing of our consolidated public sector accounts were instrumental in raising — if not sustaining — our economy in its current state of good health.

With prudent fiscal management, we have been able steadily to reduce our debt burden. Ultimately, this surplus will lead to lower inflation and lower interest rates.

And, consequently, this surplus will create a more hospitable environment for business and investments — and generate job opportunities and increased incomes for ordinary Filipinos.
LARGEST SHARE TO SOCIAL SERVICES
I must also note certain amendments with which Congress enhanced the original budget proposal from the executive branch.

My proposal that the largest share of the budget should continue to go to social services in which Congress concurred is reflected in the 1997 GAA.

Congress also has maintained the p2 billion Poverty Alleviation Fund — which I have included in the budget proposal to complement other projects in our Social Reform Agenda.

The increase in capital outlays is just as noteworthy. This will enable government to improve its capital stock and its other more-enduring investments that will build up our country’s capability for self-sustaining development.

I realize — and appreciate — the difficulties our colleagues in congress encountered in reviewing — and improving — government’s expenditure program for 1997.

However, I have just as grave — and as difficult — a responsibility — vested in me by the constitution and other laws — to ensure the efficient management and implementation of this budget, which our two branches of government have painstakingly crafted.

For this purpose, I have reserved the right to exercise my prerogative to impose reserves and use savings to augment other priority items of expenditures.
LINE VETOES OF SPECIFIC BUDGET ITEMS
As in the past — and in fulfillment of my own duty — I am therefore vetoing certain items in this document.

* The first is the item including debt service-interest payments in the general appropriations act. On the basis of two landmark decisions by the Supreme Court, I maintain that these payments are automatically appropriated, in accordance with the foreign borrowings act.

* I am vetoing item (b) in the Internal Revenue Allotment, pertaining to assistance to cities — on the ground of a constitutional infirmity.

* I am also vetoing in full the special provisions prohibiting the imposition of reserves, on the ground that they restrict the president’s prerogative to do so, in the exercise of sound financial programming and fiscal management.

* I also veto in full the special provisions authorizing the use of savings for various purposes. I do so for two reasons:

First — the authority to use savings to augment other items of expenditure in the executive branch is constitutionally vested solely in the president.

Second — under existing policy, the use of savings is subject to specific guidelines, to ensure equity, uniformity and accountability. These guidelines are applied to all agencies within the executive branch. The grant of special authority to specific agencies will merely undermine the functioning system we have set.

* I am vetoing a special provision releasing income directly to the University Hospital of the West Visayas State University.

The objective of this special provision is commendable. Unfortunately, it violates the policy that vests in the presidents of the state universities and colleges the authority to use income as they see fit — in the best interests of their institutions.
COMELEC’S CONSTITUTIONAL FISCAL AUTONOMY
* I am vetoing the special provision restricting the use of funds appropriated for the Commission on Elections (Comelec) to underwrite any election or plebiscite for the purpose of amending the Constitution.

As a constitutional commission, Comelec enjoys fiscal autonomy. Said special provision is inappropriate, because it impinges on Comelec’s fundamental prerogatives.

* For basically the same reason, I veto general provision no. 57 entitled “prohibition in the use of contingent funds, reserves, savings or amounts in this act.”

* I am also vetoing the general provision on the grant of hazard duty pay.

This provision was in the executive branch’s budget proposal for FY-1997. However, we are withdrawing this omnibus authorization in order to rationalize and make more equitable the grant of hazard-duty pay to government personnel.

* Finally, I am vetoing the general provision which directs the automatic release of funds to concerned departments, bureaus, offices, agencies and so forth — on the ground that this provision may be misconstrued as a mandate for the release of agency allotments even when revenue collections are not yet available.

I appreciate the spirit of this provision, but I regard it as difficult — if not impossible — to comply with.

I am distributing this morning copies of my veto message — which enumerates the items I have chosen to veto and explains in greater detail why I have done so.
LAS PIÑAS AS OUR NEWEST CITY
One more concrete proof of our steadily growing economy is the continuing conversion of our municipalities not just into cities but into highly-urbanized cities. Today, Republic Act No. 8251 makes Las Piñas the sixth town in Metropolitan Manila to be elevated to the rank of a highly-urbanized city (HUC) during my administration.

Las Piñas has become so highly-urbanized that it is already a city but in name. Its revenues for 1995 amounted to more than p165 million, way above the minimum income requirement of p50 million to be an HUC. Its population of 370,000 also exceeds the required 200,000.

From a predominantly agricultural community in the outskirts of manila known for salt-making and as the site of the world-famous Bamboo Organ, Las Piñas has emerged to become one of the country’s fastest growing industrial centers. Today, it is home to some 120 manufacturing and 33 export-import firms. It is a flourishing commercial center with 14 shopping malls and 37 banks, and a premier residential area with 255 subdivisions, 46 schools, and 56 medical institutions.

With its transformation into a city, the income of Las Piñas will rise even more, due to the increase of its share in the internal revenue allocation (IRA). With more taxing powers, it will be able to raise sufficient revenues to meet its social and infrastructure needs.

Finally, with its own corporate charter, it will have more autonomy to pursue its plans for growth and development.
CLOSING — LET US MANAGE PUBLIC FUNDS PRUDENTLY
I ask for your support in implementing this budget measure I have just signed into law.

We have always followed the principle that sound fiscal performance makes the best foundation for economic stability.

In this spirit, I enjoin all of you — my colleagues in government — to be judicious and prudent in the management of government funds. Let us see to it that public money is always used effectively — and in the national interest. Let us continue to carry out reforms and improvements in our fiscal policies.

The conversion of Las Piñas into a highly-urbanized city, on the other hand, inspires us to sustain our nation’s high-performance level and continuing efforts at attaining global competitiveness and excellence. It should also motivate other local government units throughout the country to similarly aim for greater progress and elevation of their status.

Let us join hands to transform both the national and local governments as the catalyst of our country’s modernization — and our people’s progress.

Once more, I thank the House of Representatives and the Senate thru their leaders, Speaker Jose de Venecia and Senate President Ernesto Maceda, and those of the legislature present here today, for your consistent support to our common legislative agenda.

We will not be able to pole-vault and compete in the 21st century unless we sustainably exert greater unity, solidarity and teamwork.

Maraming salamat at mabuhay ang Pilipinas!!