But the DOF warned that without the additional revenues from VAT, the CPSD would reach P180.3 billion or 3.4 percent of GDP.
The budget deficit of the National Government would also be narrowed down to P160.2 billion this year or three percent of GDP if the VAT law is imposed.
For 2005, NG is expected to generate some P783.15 billion of which some P546.89 billion is projected to come from the Bureau of Internal Revenue (BIR), one of the government’s revenue-generating agencies.
The public sector borrowing requirement (PSBR), on the other hand, is projected to hit P211.1 billion or four percent of GDP in 2005. This PSBR level would be attained if the VAT would be implemented.
Without VAT, the PSBR would widen to P231.1 billion or 4.3 percent of GDP.
This year, the DOF has also programmed to raise some P24.5 billion from its privatization efforts.
Finance Assistant Secretary Gil Beltran said some P24 billion has been committed by the Power Sector Assets and Liabilities Management Corp. (PSALM) from the sale of National Power Corp. (Napocor) assets that are expected to be privatized this year.
PSALM is an entity created under the Electric Power Industry Reform Act (EPIRA) to manage the finances and privatization of Napocor.
Another P500 million will come from the other assets to be sold by the NG.
In case PSALM fails to meet the programmed proceeds from its privatization effort, Beltran said the entity will have to look for other means to remit such fund.
The finance official did not say where PSALM can get the projected funds. Up to now, PSALM has sold only one big ticket generating asset of Napocor (600 MW Masinloc power plant) and some small hydro power facilities.
PSALM expects to sell 70 percent of the generating assets of Napocor by end-2005 and transmission assets by October this year. At present, it has sold only more than 10 percent of the generating assets of Napocor.
The National Government has already assumed the P200 billion debts of Napocor. At present, only about P375 billion of debt remains in Napocor’s books.
If PSALM could raise the projected $2 billion from generating assets and $2.5 billion to $3 billion from transmission assets, it could wipe out its debts.