Public sector deficit lower than expected

The government incurred a consolidated public sector deficit (CPSD) of P82.5 billion in the first semester, lower than the programmed level of P90.3 billion.

Data from the Department of Finance (DOF) show that the P82.5-billion CPSD is equivalent to just 5.5 percent of gross national product (GNP) instead of the six percent of GNP as targetted.

The CPSD includes the cash positions of the National Government, CB-Board of Liquidators, monitored government-owned-and-controlled corporations (GOCCs), Oil Price Stabilization Fund (OPSF), social security institutions (SSIs), Bangko Sentral ng Pilipinas (BSP), government financial institutions (GFIs) and local government units (LGUs).

As a result of the lower than programmed CPSD, the financing requirement of the monitored public sector (PSFR) for the period totaled only P98.56 billion instead of the programmed level of P107.3 billion.

The PSFR is the minimum amount government needs to borrow to bankroll basic public services such as health, education and police protection at an adequate level.

DOF said the adjusted PSFR, which is one of the economic indicators being monitoring by the International Monetary Fund (IMF) under the country’s post-program monitoring, was within target.

The adjusted PSFR does not include the accounts of the Oil Price Stabilization Fund (OPSF) and privatization.

The DOF said the lower deficit was due to the favorable National Government fiscal performance, generating a deficit of P2.8 billion that is lower than programmed.

Also, expenditure savings of P12.7 billion completely offset a revenue shortfall of P9.9 billion. Internal revenue collection suffered reversals from the poor performance of individual income taxes and excise taxes. – Rocel Felix