DBCC recommends P1.6-trillion national budget for next year

MANILA, Philippines - After a series of deliberations that culminated yesterday, the Development Budget Coordination Committee (DBCC) recommended the adoption of a P1.68-trillion budget for 2011, which is 9.3 percent more than this year’s P1.54 trillion budget.

The DBCC, headed by Budget Secretary Joaquin Lagonera, said the amount is premised on the existing revenue measures of P1.4 trillion and a deficit of 3.3 percent of gross domestic product.

In addition to the P1.68 trillion budget, the DBCC also recommended P94.8 billion in unprogrammed (standby) appropriations for additional infrastructure and social projects which can be released if Congress passes new revenue measures.

“Next year’s proposed budget will support a GDP growth rate of up to 4.7 percent, which will create more jobs and build more infrastructure,” Lagonera said in a statement.

Finance Undersecretary Gil Beltran said tax administration reforms, which are expected to yield 0.7 percent of GDP, will support the proposed budget for 2011.

“We will intensify efforts to improve revenue collection efficiency,” Beltran said.

The DBCC also proposed the attainment of a balanced budget by 2016 for consideration by the next administration, “in the context of a long-term road map, which aspires for a sustained higher growth path, healthy fiscal position, stable prices, sound and safe financial system, and robust external payments position.”

“It is important to emphasize that we were well on our way toward a balanced budget when the global economic crisis hit and, in fact, could have balanced the budget if we had wanted to at the expense of slower growth,” NEDA Director-General Augusto Santos said.

BSP Deputy Governor Diwa Guinigundo said that “while we succeeded in maintaining growth, we also achieved stable prices.”

“This proposed budget will continue to push growth without compromising our inflation target of three to five percent,” he said.

The Budget department is expected to release by mid-May the fiscal year 2011 national budget call to guide government agencies in preparing their respective budgets for next year.

The budget call is a document that contains, among others, macroeconomic assumptions (GDP growth rate, inflation rate, foreign exchange rate, 91-day T-bill rate, etc.), the fiscal program, and guidelines on budget formulation and resource allocation for the ensuing budget year.