Budget deficit may reach P160 billion this year - Recto

The government’s budget deficit could reach P160 billion this year, much higher than the revised projection of P102 billion, because of the government’s need to spend more in the wake of the global financial turmoil, Socioeconomic Planning Secretary Ralph Recto said yesterday.

“I’m not saying it’s going to be P160 billion but it can happen,” he said.

The National Economic and Development Authority (NEDA) chief said that with the approval of the supplemental budget for the automation of the Commission on Elections (Comelec) amounting to P11 billion, the P102 billion is already a far-fetched target.

He said that because the government needs to spend for the Comelec’s purchase of automated counting machines and other related equipment, the deficit could already hit roughly P114 billion.

The House committee on appropriations approved a supplemental budget of P11 billion for the automation of the Comelec, ahead of the 2010 national elections.

“But there’s a global downturn, so this could increase even more to two percent of gross domestic product (GDP). At two percent, this is roughly P160 billion,” he said.

However, Recto said that a budget deficit of P160 billion should not be a cause for concern as long as the funds would be used to pump-prime the economy.

“For as long as the economy grows faster than our debt, then it’s okay,” Recto said.

Earlier, Finance Secretary Margarito Teves admitted that the Philippines is finding it difficult to achieve a balanced budget by 2010, with the budget deficit projection at P102 billion next year or P62 billion more than the original program of P40 billion due to the difficult global economic tide.

The P102 billion programmed deficit for 2009 took into account higher expenditures of P1.467.8 trillion as the government plans to boost spending this year to help pump-prime the economy. This is above the original program of P1.433 trillion.

On the other hand, the government expects total revenues in 2009 to decline to P1.365 trillion from the original program of P1.393 trillion.

The latest budget deficit projection of P102 billion is above the revised deficit forecasts for 2009 of P75 to P80 billion.

The government incurred a budget deficit of P4.3 billion in November, a marked turnaround from the P54.1 billion surplus recorded in the same period last year.

The November budget gap brought the country’s fiscal position for the January to November period to a deficit of P66.7 billion, latest data from the Finance department showed.