Still no final national budget with less than a week before SONA

MANILA, Philippines - With Congress set to resume session next week, Malacañang is still hard-pressed to come up with a final national budget figure that it will propose to lawmakers, due to uncertainties in revenue collections and the still unfinished appraisal of the “absorptive capacity” of each department.

“There is no final number (for the 2010 budget) yet,” Budget and Management Secretary Rolando Andaya told The STAR. “What is final will be the deficit of 2.5 percent to 2.8 percent of GDP (Gross Domestic Product),” he said.

“We have to compare their (departments) submissions and their actual performance last year and this year in spending,” Andaya said. Last May, the DMB made a “budget call,” which guides government agencies in setting their respective budgets, including expenditures.

Congress opens on July 27 and President Arroyo has about 30 days from then to submit to congressmen the proposed national expenditure program for their approval.

The national budget under the 2009 General Appropriations Act is P1.415 trillion. Next year’s budget is expected to be higher but sources said the increase is likely to be small due to the uncertainty of revenue flows caused by the global economic crisis.

Andaya earlier voiced concerns raised by economic managers over the likelihood of the deficit breaching the P250-billion target due to collection deficiency.

Meanwhile, former national treasurer Leonor Briones said the government’s 2010 targets on revenues, expenditures and deficit were “unrealistic” and that formulating next year’s budget with these assumptions will “push the country to fiscal crisis.”

But Andaya said there were no set assumptions yet so he could not understand the point of Briones.

Briones, lead convenor of Social Watch Philippines, said the budget call for 2010 projects next year’s deficit at P173.3 billion.

This is based on the assumption that government revenues will reach P1.403 trillion while disbursements will amount to P1.576 trillion, she said.

“The signs that there will be serious setbacks in meeting the fiscal targets for 2010 are already apparent this year. The Development Budget Coordinating Council (DBCC) already increased, yet again, the deficit target for 2009 to P250 billion but revenue collections are still below target, with an P18 billion shortfall for the first quarter,” Briones said.

“Financing this deficit through more borrowings will siphon not only this year’s budget but also the budget for next year,” Briones said.

“Mrs. Arroyo should refrain from proposing to Congress a 2010 budget that is not viable. Making legislators believe that there are viable sources to fund a budget bloated by questionable, unnecessary and redundant items will push the country further to unmanageable deficits and eventually drain funds that should otherwise be used for critical social development to the benefit of the poor,” Briones said.