Romulo said he has directed the Development and Budget Coordinating Council (DBCC) to work out austerity measures as well as programs to improve revenue to ensure this year’s budget gap will not exceed 3.9 percent of gross national products (GNP).
"This means the budget deficit will be from a low of P130 billion to a high of P145, billion," Romulo said, adding that the earlier reported projected deficit of more than P200 billion for the year "is simply not acceptable."
The more than P200-billion projected deficit includes the P70 billion in payables left by the Estrada administration. The large deficits incurred by the Estrada administration – P11.7 billion in 1999 and P136.1 billion in 2000, as well as the attendant increase in total debt from P1.4 trillion in 1998 to P2 trillion in September 2000, pose risks to recovery.
Romulo said it would be too late for the government to propose a new budget to Congress because of the coming national elections, thus, government will somehow have to live with what budget Congress already earlier approved.
Romulo said the government will have to double its efforts to increase revenue and cut spending in order to pare down the deficit.
One such immediate measure, according to Romulo, would be for government to auction all luxury vehicles previously used by the Estrada administration.
The gesture may not translate into substantial proceeds, but Romulo said it will send a signal to the public of the kind of governance the Arroyo administration wants to emphasize, particularly for government agencies.
"The President (Arroyo) has already directed us to conduct an auction of those vehicles. I am having all of them listed and certified by the Commission on Audit," Romulo said.
At the same time, government will beef up revenue collection with the Bureau of Internal Revenue expected to generate P408 billion in taxes this year, this is more than 70 percent of total projected revenues of P579 billion.
Romulo said he wants the BIR to increase its projected revenue by another P10 billion.
Despite these measures, Romulo said the government will still be able to pump-prime the economy by bringing down intest rates.
"We will discuss this with monetary authorities. We wasn’t to be able to jumpstart the economy, lower interest rates so that business can borrow from banks at lower rates, and hopefully, spur businesses and jobs," Romulo said.