Government likely to perform close to 2001 budget deficit target, says Camacho

The government admitted yesterday it will mostly likely breach its budget deficit target of P145 billion for 2001, but stressed this will not have a significant impact on investors and creditors closely watching how the Arroyo administration handles its fiscal position.

"The deficit for 2001 will probably be plus or minus P2 billion," said Finance Secretary Jose Isidro Camacho, "but this is still acceptable."

Camacho said the announcement earlier by Presidential Spokesperson Rigoberto Tiglao of a P147-billion deficit for 2001 was still premature.

"Even if you say its higher by P2 billion, it’s still within an acceptable range. And for other investors and those closely looking at how government will manage its budgetary shortfall, the tolerance level is even higher," Camacho added.

Budget Secretary Emilia Boncodin, for her part, said: "It’s accounting, data but we assure you that the members will not be manipulated."

Boncodin, one of the key figures of the interagency Development Budget and Coordinating Committee (DBCC) comprising the DBM, Finance Department, National Economic and Development Authority and the Bangko Sentral ng Pilipinas, said the final figures will be known in the next two weeks.

In a related development, Economic and Planning Secretary Dante Canlas who was also present in yesterday’s DBCC meeting said government is revisiting its macroeconomic targets for next year.

"We want to review our revenue forecast although we have no solid numbers yet. But what we want to find out is which existing projected taxes will respond to growth projections," Canlas said.

For next year, the gross domestic product (GDP) is expected to grow by 5.4 to 5.9 percent while the budget deficit target is pegged at P98.4 billion.

Canlas explained that government is seeking to find the appropriate level of revenues, expenditures and contingent liabilities the National Government will face in 2003 based on its GDP projection.

"The question we are trying to answer is how much should revenues be, given next year’s projected growth."

"We also have to look at the priorities set under the President’s State of the Nation Address and under the recent national socio-economic summit," Canlas added.

As for growth in 2001, Canlas said the domestic expansion in the fourth quarter will hit the target of 3.6 to 3.7 percent, allowing the full-year GDP target to reach 3.3 percent.

The strong growth of the agriculture sectors as well as the services sector last year, along with the expansion of consumption of the household sector pushed up the growth rate in the fourth quarter, Canlas added.