Budget gap seen to hit P190 B this year

The government’s budget deficit may go as high as P190 billion this year if the Arroyo administration factors in some P70 billion in accounts payable left by the Estrada administration.

Newly-appointed Finance Secretary Alberto Romulo admitted it will be difficult to address the swollen budget deficit.

Early this month, former Finance Secretary Jose T. Pardo said the budget deficit for last year was P130 billion, more than twice the original projection of P62.5 billion.

For this year, the government wants to nail the deficit to P120 billion but this would mean shelving programmed projects worth about P40 billion in the first semester. The Development Budget Coordinating Committee also lowered its revenue collection targets from the privatization of government owned and controlled assets while increasing its allocation for maturing debts.

The Estrada administration proposed a P725-billion budget for the year, although the House of Representatives cut this by P10 billion, making it even harder for government to implement pump-priming activities.

Romulo said he will look into the list of receivables against expenditures and see how the deficit could be capped at P120 billion.

"I don’t know where we could get the money to pay for the deficit and the accounts payable," Romulo admitted, especially since the new government has a policy of going to the debt market only as a last resort.

Romulo said he will order the DOF to itemize the P70-billion payables.

"I just want to know what are the components of these payables," Romulo said," adding it would be a Herculean task "to clean up the mess."

Romulo said the Estrada administration left a huge deficit that will run for at least two-and-a-half years.

"The lack of funds for social services and education, and other basic services are what we will be paying for," Romulo said.

Romulo said the government will try to beef up revenue collection, including going after big-time tax evaders who have unpaid taxes of about P100 billion.

"We hope to be able to collect unpaid taxes and in doing that, the law will apply to everyone, there will be no special favors or treatment," Romulo said.

Romulo, however, is hopeful that the new government will be able to work out the budget deficit problem and manage a surplus "which is the way to run a government."