NG seen outperforming budget gap target

The government is expected to outperform its programmed deficit for 2006 by as much as P15 billion, the Congressional Planning and Budget Department (CPBD) said in a study.

The CPBD, the research arm of the House of Representatives, said in its latest estimate that the government is likely to succeed at containing its deficit within the P107.6 billion to P110 billion range.

At this level, the fiscal deficit would be equivalent to 1.8 percent of gross domestic product (GDP), way below the target of at least 2.3 percent of GDP.

"For this year, the CPBD reckons that the government will outperform its fiscal deficit target of P125 billion with a likely scenario of P107.6 billion to P110 billion deficit," the House research arm reported.

The CPBD had earlier projected that the National Government would overshoot its target deficit with a P147.4-billion budget gap. At that time, it attributed the expected fiscal failure to lingering political noise over constitutional amendments and calls for impeachment against President Arroyo.

After the first ten months of the year, however, the CPBD said effective revenue collections as well as the tight restrictions imposed by the re-enacted 2005 budget would be able to contain the deficit in 2006.

According to the CPBD, total revenues would likely reach P989 billion this year or 16.5 percent of GDP. This would be P14.9 billion higher than the target of P974.1 billion or 16.2 percent of GDP.

The institution also reported that the Bureau of Internal Revenue (BIR) is projected to collect a total of P666.7 billion this year, about P8.7 billion lower than the government target of P675.4 billion.

But collections of the Bureau of Customs (BOC) would overshoot the target by P1 billion, reaching a total of P198.7 billion.

The National Government incurred a P5.8-billion budget deficit in October but Finance officials said the full-year gap would be at least P10 billion less than the programmed ceiling of P125 billion.

The Department of Finance (DOF) reported that the national budget Deficit for the first 10 months of the year reached only P56.3 billion, leaving a headroom of over P67 billion for the remainder of the year.

After Congress approved the supplemental budget, economic officials said the government now has the opposite problem of being able to disburse the P46.9-billion in the next two months.

Based on the fiscal performance of the last 10 months, the DOF said the full-year deficit is projected to range between P105 billion and P115 billion, against the programmed ceiling of P124.9 billion.

For the first time since the government acknowledged a fiscal crisis in 2002, the government now has the problem of being able to disburse the supplemental budget approved by Congress or the unutilized funds would revert to the national coffers.