English
Philippines: DBCC raises 2021 budget deficit ceiling
Figure raised to 9.4% from previous 8.9%
The government’s fiscal gap ceiling this year was raised by the country’s economic managers, who expect higher public expenditure on the coronavirus disease 2019 (Covid-19) pandemic response.
Budget Secretary Wendel Avisado said on Tuesday night that the interagency Development
Budget Coordination Committee (DBCC) revised this year’s deficit program upward to 9.4 percent of the country’s gross domestic product (GDP), following the 179th DBCC meeting.
The current deficit-to-GDP ceiling is higher than the DBCC’s earlier estimate of 8.9 percent and the actual 7.6 percent last year.
Avisado said the adjusted ceiling was a result of the revised revenue and disbursement program.
The 2021 revenue program was retained at P2.88 trillion.
Projected disbursements for this year, on the other hand, have been revised upward from
P4.66 trillion to P4.74 trillion, owing to funding requirements for Bayanihan 2, which include the procurement of Covid-19 vaccines, among other things.
Bayanihan 2 is the Republic Act 11465 or the “Bayanihan to Recover as One Act,” which involves interventions that include cash-for-work programs; skills training; social assistance programs; funding for the agriculture, tourism, transportation and education sectors; and more lending programs to help businesses survive. It expired last December 19.
The deficit-to-GDP ratio is seen to be 7.7 percent next year, with revenues anticipated to rise to P3.29 trillion against a disbursement program of P4.95 trillion. Expenditures are estimated to surge to P5.11 trillion in 2023 and P5.40 trillion in 2024.
“The estimated disbursements for 2022 to 2024 already take into account the proposed Growth Equity Fund (GEF), which will be established in line with the implementation of the Supreme Court Ruling on the Mandanas-Garcia case,” Avisado explained.
He went on to say that the GEF aims to help poorer local governments deal with issues like marginalization, unequal growth, and high poverty rates.
“The DBCC will continue to adopt a fiscal consolidation strategy to gradually bring the
deficit back to pre-Covid-19 levels with a projected 6.4 percent of GDP rate in 2023 and 5.4 percent of GDP rate in 2024,” the Budget chief assured.
To fund the country’s fiscal deficit, Finance Secretary Carlos Dominguez 3rd said the government is preparing to sell properties, especially certain large mines under the Privatization Management Office.
Dominguez is referring to Basay Mining Corp., which is located in Novaliches, Quezon City; and Nonoc Mining and Industrial Corp., which is located in Surigao City.
“With the developments in copper prices internationally, the values of those assets have certainly increased. So that will be one of the large sources to fund our future deficit, if at all,” the Finance chief added.
Finally, he mentioned that the assets’ assessed values are currently being reevaluated.
Source: https://www.manilatimes.net/2021/05/20/business/business-top/dbcc-raises-2021-budget-deficit-ceiling/874146/