DBCC may raise budget deficit ceiling

By: Satchi Valdez, InterAksyon.com
January 16, 2012 7:24 PM

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MANILA, Philippines -- The Development and Budget Coordination Committee (DBCC) expects the budget deficit for this year to top the P286 billion ceiling.

Citing a meeting of the DBCC Technical Working Group, a source from the Department of Finance (DOF) said the full-year fiscal gap could exceed P300 billion as the government plans to make up for last year's underspending by opening the fiscal tap wider in 2012.

The source said the greater spending would come alongside lower revenues, as the Philippine economy is seen to slow on account of the debt crisis in the euro area and the political tension in the Middle East

“But the problem is that the economic managers do not want the targets to be changed even if it’s not realistic anymore,” the source said.

In a text message, Budget Secretary Florencio Abad however said the government is not disposed to changing its fiscal target despite suggestions to that effect.

“That may be proposed but I cannot say for sure if it will be accommodated. We also need to look at the revenue side, as well as the extent to which we can begin to fully roll out our PPP program,” Abad said, referring to the Public-Private Partnership program.

"As a policy we will try to stay within our prescribed budget ceiling, but I will not be surprised if there will be proposals to make upward adjustments. That all depends on the revenue picture and the ability of infrastructure agencies to roll-out PPP projects," he said.

The Bureau of Internal Revenue (BIR) should raise P1.066 trillion this year, for a 13 percent increase over the P940 billion target last year.

The Bureau of Customs also has to raise more, with its P365.1 billion target being 14 percent higher than last year.

“If the country’s economy slows this year, the collection of BIR will be affected. The BOC’s collection, meanwhile, will only increase if the price of oil in the international market will continue to rise because of the Middle East crisis,” the source said.

The DBCC is scheduled to meet this week to decide on fiscal targets.

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