MANILA, Philippines - The government is eyeing to keep next year’s budget deficit at P285 billion or 3.3 percent of gross domestic product (GDP), smaller than the projected P293-billion deficit ceiling for the year which is 3.6 percent of GDP.
The Development Budget Coordination Committee (DBCC), the interagency group that sets the country’s macroeconomic assumptions, arrived at P285-billion deficit ceiling after adopting a national budget of P1.68 trillion for next year.
The amount is 9.3 percent more than this year’s P1.54 trillion budget and is premised on existing revenues of P1.4 trillion.
Next year’s budget also supports a growth rate of 3.8 percent to 4.7 percent for 2011, which according to Budget and Management Secretary Joaquin Lagonera would create more jobs and build more infrastructure projects.
The DBCC also said that the government may balance its budget either in 2013 or in 2016.
“We are leaving it to the next administration to decide. Our recommendation is that the earlier we can do it, the better,” Acting Socioeconomic Planning Secretary Augusto Santos said.
Originally, the government had planned to balance the budget this year but was forced to adjust the date to 2013. However, because of problematic revenues, Santos said the DBCC has adopted a balanced budget goal range of between 2013 and 2016.
He said the final date would depend on the next administration, which will be taking over by July 1, 2010.
Santos also said that the final date would depend on the amount of revenues the government would be getting between now and 2013.
“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,” Santos said.
Fiscal authorities have been pushing for legislative measures that would raise taxes on alcohol and cigarettes, simplify the country’s net income taxation system and rationalize fiscal incentives.
Undersecretary Gil Beltran said that 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.