Public sector deficit seen hitting P158 B

MANILA, Philippines - The country’s consolidated public sector deficit (CPSD) is projected to hit roughly P158.3 billion next year or 1.3 percent of gross domestic product (GDP) as the government strives to trim the debt of the public sector, according to the latest data from the Department of Finance (DOF).

This is a long way down from the CSPD level of P355.8 billion or four percent of GDP recorded in 2010.

The country’s consolidated public sector fiscal position is the combined budget deficits or surpluses of the national government and state-owned firms. These include government-owned and controlled corporations, local government units and government financial institutions.

Closely monitored by local and foreign debt watchers, the consolidated public sector fiscal position is an indication of a country’s credit risk.

The government has been trying to impose prudent spending and financial discipline on state-owned agencies to improve the country’s fiscal position.

Preliminary data from the DOF showed that the CPSD has narrowed to P178.7 billion in 2011 or 1.8 percent of GDP, lower than the programmed P206.6 billion or 2.3 percent of GDP for the period.

For 2012, the government has programmed a CPSD of two percent of GDP or P214 billion.

Finance Secretary Cesar Purisima noted that the government has been making headway in trimming the public sector deficit. “Note that the preliminary CPSD for 2011 is 1.8 percent of GDP, which is lower than programmed for 2011.

The government has been trying to trim the CPSD by closely monitoring the operations of state-owned agencies and other government corporations.

Minus the combined deficits of state-owned corporations, the government hopes to post a budget gap of P279 billion this year or roughly 2.6 percent of GDP.

Last year, the government recorded a budget deficit of P197.7 billion or two percent of GDP.

For 2013, the government has programmed a deficit of P241 billion or two percent of GDP.

Latest data from the DOF showed that the government has recorded a budget gap of P34.5 billion in January to June, below the program for the period by almost P75 billion.