Budget deficit seen hitting P250B this yr

MANILA, Philippines - The government’s budget deficit is expected to hit P250 billion this year, below the revised official estimate of P286 billion or two percent of gross domestic product because of lackluster state spending, former Budget Secretary Benjamin Diokno said yesterday .

He said the Aquino administration’s term would likely be characterized by low deficits and as a consequence, inadequate spending for social services such as health and education.

“We will not have big deficits which means there will be lower delivery of public services,” Diokno said.

 He said that President Aquino and members of his economic team such as Finance Secretary Cesar Purisima and Budget Secretary Florencio Abad are very conservative when it comes to spending.

 This, he said, is harmful for the economy because consumption spending is also limited. “It’s bad for the economy because consumers should be spending. Nobody is spending,” Diokno said.

Even the estimated budget deficit last year of P140 billion to P170 billion does not bode well for the economy, he said. “That’s bad. That’s only half of the original budget deficit ceiling of P300 billion,” he said.

He said the economy needs to be supported by state spending given that consumer spending is limited and that exports are affected by uncertainties in the global environment.

Budget Undersecretary Laura Pascua has said that the government’s 2011 budget deficit is estimated at P140 billion to P170 billion, way below the original budget gap ceiling of P300 billion.

 According to the latest data from the Finance department, the January to November 2011 budget gap is only at P96.254 billion.

 This is significantly lower than the P267.328-billion deficit incurred in the same period in 2010.

Data from the Finance department also showed that disbursements have yet to match the comparable disbursements in the same period in 2010.

 According to the latest data from the Finance department, total disbursements amounted to P1.346 trillion from January to November 2011.

 This is two percent lower than comparable disbursements in 2010.

However, actual disbursements in November 2011 amounted to P150.748 billion, above the P111.053 billion generated in the same period in 2010.