Budget deficit for 2011 seen at P190 billion

MANILA, Philippines - The emerging budget deficit for last year is P190 billion, a Budget and Management official said yesterday, as the government has yet to fully catch up on its disbursement plan.

The interagency Development Budget Coordination Committee, the interagency group that sets the country’s macroeconomic assumptions, met on Wednesday to decide on whether or not there was a need to revise the numbers for this year.

 “The (emerging) deficit for 2011 is P190 billion,” Budget Undersecretary Laura Pascua said yesterday.

The government is set to announce the final 2011 figures next month.

The P190 billion is below the original budget gap ceiling of P300 billion and even the revised projection of P260 billion, indicating that the government was unable to fully make up for the lackluster state spending in the first half of last year.

However, Finance Secretary Cesar Purisima said there’s a lot of catching up to do.

As such, the government is keeping the deficit-to-GDP ratio at 2.6 percent for this year, same as last year, instead of two percent as previously planned.

 “For our 2012 fiscal target, we are keeping it at 2.6 percent of gross domestic product (GDP). That can change whatever the GDP number will be,” Purisima said.

During the meeting, the DBCC also revised downward the government’s 2012 export revenue assumptions to $55.3 billion from $58.6 billion in light of uncertainties in the US and Europe.

 “In imports, we’re also projecting a decrease to $75.9 billion from $79.4 billion. As you know, our imports and exports are highly correlated,” Purisima said.

He said exports and imports are the only two things that were revised in the 2012 macro assumptions.

Government economic managers retained the five percent to six percent GDP growth target for the year and assumed a growth of six percent to seven percent in 2013.

Purisima said 2011 was a difficult year. “Well, 2011 was a very unusual year. There were a lot of black swans. Start with the Japanese earthquake and the nuclear accident which really affected the supply chain. Then you had Middle East Arab Spring, no one predicted that. Europe was already there but the way it unraveled also affected us. 2011 was one of those years when there were simply too many things going against most countries,” he said.