President Rodrigo R. Duterte will propose at least P5-trillion national budget before his term ends.
Already, the Development Budget Coordination Committee (DBCC), an inter-agency body tasked to set the macroeconomic targets of the country, approved late Monday, a P5.024 trillion expenditure ceiling for 2022.
According to the DBCC, the 2022 National Expenditure Program, which will be submitted to Congress once it resumes session, is 11.5 percent higher than the P4.506 trillion general appropriations this year.
Of the proposed 2022 budget, the executive department earmarked P1.29 trillion for infrastructure projects, equivalent to 5.8 percent of the country’s economy, or gross domestic product (GDP).
The DBCC, mainly led by the finance, budget and economic planning secretaries, said the approved national budget will continue to invest in building the country’s resilience amid the pandemic.
In particular, the inter-agency body said the government will prioritize funding for COVID-19 response measures, such as healthcare development and social services, while also ramping up economic growth through investments in public infrastructure.
In 2022, state revenue haul is seen to hit P3.29 trillion, or 14.9 percent of the economy, while the estimated level of expenditures was set at P4.95 trillion, equivalent to 22.4 percent of GDP.
The national government programmed its budget deficit ceiling at 7.5 percent next year, lower compared with this year’s estimate of 9.3 percent.
The DBCC said the slimmer financing gap next year is in line with the government’s “fiscal consolidation strategy” of bringing back the country’s budget deficit to pre-pandemic levels.
President Duterte budget proposal hinges on an assumption that the local economy would still grow by 6.0 percent to 7.0 percent this year despite the threat posed by the quick-spreading Delta variant in the country.
His economic managers maintained their 2021 GDP target, saying the range remains attainable due to declining number of COVID-19 cases in the country since the peak in April and the gradual reopening of the economy with more targeted granular lockdowns.
The DBCC also kept the 7.0 percent to 9.0 percent GDP target for next year as well as 6.0 percent to 7.0 percent assumption for 2023 and 2024.
“To support this outlook, the DBCC emphasized its support to manage risks and continue the gradual and safe reopening of the economy, subject to the strictest compliance to minimum public health standards,” the committee said.
Moreover, the DBCC reiterated the need to intensify the implementation of the prevent, detect, isolate, treat, and recover (PDITR) strategy, along with the full vaccination of residents in high-risk areas to will regain consumer and business confidence.
But as the Delta variant poses a threat in the Philippines, the DBCC said the country needs to improve its health system capacity and prevent community transmissions.
“The relaxation of quarantine restrictions in high-risk areas must be complemented with an accelerated vaccination roll-out, in order to allow more businesses to operate and consumers to participate in socio-economic activities,” the DBCC said.
According to the economic team, the government has so far released P665.72 billion to fund its COVID-19 response and mitigate the losses of low-income households, small businesses, and other vulnerable sectors.
“With these actions, the DBCC is optimistic that the country’s GDP may return to its pre-pandemic levels as early as 2022,” the committee said.
However, it also said the economic team will review the GDP growth projections after the release of the second-quarter growth performance in August.
“The DBCC remains committed to restoring jobs and building a stronger and more competitive economy, while sustaining the Duterte administration’s legacy of real change for future generations,” the inter-agency said.