By Chino S. Leyco
After breaching its ceiling, Finance Secretary Carlos G. Dominguez III assured that the national government will manage to work within the programmed budget deficit this year.
Finance Secretary Carlos G. Dominguez III . (Manila Bulletin file phot
Asked if there is a need to revisit the 3.2 percent budget deficit-to-gross domestic product (GDP) ceiling set for 2019, Dominguez responded that “we’re confident of keeping within the target,” which is equivalent to P624.4 billion.
The finance chief also said that they are confident that government disbursements this year would catch up in the second-, third-, and fourth-quarters following the delayed passage of the 2019 general appropriations act (GAA) in the first three-months.
Dominguez estimated that the delay approval of the 2019 budget appropriations would result in P46 billion less spending opportunity for the Duterte administration.
“The delay in the approval of the budget is regrettable, but we will strive to catch up during the rest of the year,” the finance chief told reporters in a mobile text message.
Last Friday, Dominguez assured that the national government’s budget deficit remains “manageable” despite the above programmed spending last year that resulted in slightly elevated fiscal gap ratio.
The Duterte administration had set a 3.0 percent budget deficit-to-GDP ratio cap, or P523.7 billion, for last year, but the national government ended with a nominal P558.3 billion fiscal gap due to higher public spending.
The Bureau of the Treasury reported that the government surpassed its spending program after the Duterte administration “ramped-up” investments in infrastructure, social protection as well as increased disbursements in personal services (PS).
According to the treasury, PS jumped last year following the implementation of salary increases for civilian and military, including uniformed personnel.
The treasury also added that the government hired additional teachers for the Department of Education last year, which also boosted the government’s PSA expenses.
Budget Secretary Benjamin E. Diokno also shrugged off the accelerated spending, noting the government recorded an “impressive” infrastructure disbursements last year, which is now seen to be twice the fiscal deficit-to-GDP ritio.
According to Diokno, the budget deficit has averaged 2.7 percent of GDP in the first two years of the Duterte administration, but its infrastructure outlays are projected to hit 6.3 percent.
“This means that the country’s borrowings are financing worthwhile infrastructure investments that the Filipino people can look forward to enjoying,” Diokno said. “The fiscal numbers reflect our seriousness in closing the country’s infrastructure gap.”
“Filipinos may really look forward to better roads, comfortable mass transport systems like trains and modern public utility vehicles (PUV), among other infrastructure initiatives. The data support the eye test, with so many construction projects going on around the country,” he added.
Based on historical data provided by the Department of Budget and Management (DBM), Diokno noted that infrastructure spending as percent of GDP was not a priority of previous administrations.
The DBM cited that the ratio hit 3.0 percent under the Aquino administration, 1.6 percent during the Arroyo government, 1.8 percent under former President Joseph Estrada’s term, and 1.7 percent under President Fidel Ramos’ leadership.
The Duterte administration has turned the ratio around by investing an estimated 6.3 percent of GDP for public infrastructure in 2017 and 2018, the budget chief said.