As government takes over the debts of the National Power Corp., however, the national deficit would still have a remnant P66 billion by the end of the Arroyo administration in 2010, unless legislative measures are put in place to offset the power company’s funding requirements.
Based on the revised Medium Term Development Program (MTDP) presented by the Department of Finance to the Senate
and House of Representatives, revenue collections are projected to breach the trillion mark in 2008 based on its current trajectory.
This year, total revenue collections is projected to reach P676 billion, going up to P758.5 billion in 2005, P848.3 billion in 2006 and P942.2 billion in 2007.
By 2008, revenues are expected to reach P1.048 trillion before going up slightly to P1.175 trillion in 2009 and finally to P1.321 trillion by 2010.
The bulk of the revenues, according to the DOF, would come from tax revenues which was projected to hit P975 billion in 2008 and P1.106 trillion in 2009. By 2010, tax revenues are projected to reach P1.249 trillion. Expenditures, on the other hand, will go up even faster, hitting the trillion mark two years before revenue collections reach this point. By 2006, expenditures are projected to reach P1.010 trillion, going up to P1.069 trillion in 2007 and P1.127 trillion in 2008.
While revenues trudge along, expenditures were expected to reach P1.190 trillion in 2009 and finally P1.321 trillion in 2010 for a balanced budget at the end of the Arroyo administration.
These assumptions, according to the DOF, do not include the funding requirements of Napocor, whose debts have been absorbed by the government.
Including Napocor, the DOF estimated that the fiscal position will not balance until around 2015. By 2010 at the end of the Arroyo administration, the government would still be in deficit position.
Beginning 2005 when the government officially assumes Napocor’s obligations amounting to over P560 billion, the deficit would skyrocket back to P221.2 billion.
The downward trajectory would be much slower, going down to P207.3 billion by 2006 and P175.8 billion by 2007. The DOF said the deficit would drop to P132.2 billion in 2008 and finally below the P100-billion mark by 2009 when the deficit would reach only P75.6 billion.
By the end of the Arroyo term, however, there would still be a P66.3-billion deficit, all of which would come from NPC’s P66.3-billion funding requirement.