MANILA, Philippines - The Aquino administration is keeping its fingers crossed that the higher-than-expected gross domestic product (GDP) growth in the second quarter of 7.9 percent would translate to higher revenues and consequently reduce the budget gap by yearend.
“We are hoping the deficit would be smaller,” said Socioeconomic Planning Secretary Cayetano Paderanga Jr.
The government has projected a budget deficit ceiling of P325 billion this year or 3.9 percent of GDP from P298 billion last year or 3.5 percent of GDP.
As of end-July, the budget shortfall has already widened to P229.4 billion, already 70.6 percent of the 2010 ceiling.
Finance Secretary Cesar Purisima, for his part, also expressed hopes that the economic growth would be sustained so that the revenues will also improve.
“Looking at the number, I am hopeful that if we implement the programs that we have identified such as investment in infrastructure in the public-private partnership (PPP) program, we will be able to sustain these numbers. They key is sustaining this, not hitting it once, and sustaining it over a long period of time,” Purisima said.
He said that the reason the country has not been able to sustain the growth because historically, it has been driven by consumption.
“We’re missing the other leg which is on investment and that’s very important. That’s what we’re trying to trigger with our PPP initiative,” he said.
Aside from the lack of adequate infrastructure, Purisima said that corruption and red tape have also dampened economic growth.
“We’re noted for corruption, red tape, bureaucracy and the issue regarding the credibility of our administration which is no longer present. I’m very pleased. One, this proves we can hit high growths and the only challenge now is to sustain it. And to sustain it, we need investments and we need better infrastructure,” he said.