Documents show the DOF forecasts a "worst but improbable" scenario of the P16-billion revenue shortfall, but Finance Secretary Jose Isidro Camacho said government is expecting additional revenues that will allow it to keep the deficit within the P145-billion target.
A P16-billion revenue shortfall is not likely to happen, Camacho said, adding the Bureau of Internal Revenue (BIR) is beefing up collection efforts to meet its P388-billion target for this year.
The government is also expecting to cash in on the sale of about P13 billion in net revenues from the sale of a Philippine Estates Authority property on Roxas Boulevard which should be enough to meet the P10-billion revenue target from the privatization of state assets.
The property along Roxas Boulevard will be acquired by the Philippine Amusements and Gaming Corp., which will use the proceeds of a planned P15-billion bond issue to buy the land and convert it into an entertainment complex.
Money market players pushed up interest rates in recent weeks concerned the government which saw its budget deficit exceed its target in the first nine months at P122.152 billion, might not be able to contain the yawning budgetary gap.
Despite keeping a tight rein on its expenditures, the government’s budget deficit for the first nine months rose to P122.152 billion, exceeding its programmed level of P120.2 billion by P1.956 billion, raising the specter of a runaway shortfall with two months to go before the end of the year.
Camacho said government would try to increase its revenue collections in the coming months to be able to contain the deficit at P145 billion for the whole year.
Resolving the fiscal imbalance is the key for the Philippines to get a better credit rating from international credit rating agencies notably Standard & Poor’s and Moody’s. These agencies have downgraded the country’s credit outlook to "negative" from "stable" in 2000.
An improvement in the credit rating will help the Philippines raise cheaper funds abroad since investors will not ask for higher returns on their funds.
The government’s failure to meet the fiscal target has been the sorest spot in the previous administration, turning off potential investors. It failed to complete its program with the International Monetary Fund as a result of this.