Public sector deficit down

MANILA, Philippines - The Department of Finance (DOF) reported yesterday that the country’s consolidated public sector deficit (CPSD) – an indicator of creditworthiness – declined to P163.3 billion last year.

The amount, which was P11.8 billion lower than what was recorded in 2011, was also P70.7 billion lower than the  programmed amount.

Last year’s CPSD was equivalent to 1.5 percent of gross domestic product (GDP).

The DOF attributed the improvement to the strong fiscal position of the National Government, as well as better-than-expected financial reports of local government units, social security institutions and government-owned corporations.

The National Government registered a budget deficit of P242.8 billion, equivalent to 2.3 percent  of GDP and lower than the full year program by P36.3 billion.

As of end-December 2012, government-owned corporations incurred a  deficit of P4.9 billion, a marked improvement from the P19.8 billion recorded in 2011.

The social security institutions (SSS, GSIS, PHIC), on the other hand, posted a surplus of P72.7 billion on the account of higher revenues from members’ contributions and higher investment income derived from the holdings of National Government securities.

Government financial institutions Development Bank of the Philippines (DBP), Trade and Investment Development Corp. (Tidcorp) and Landbank posted a combined surplus of P9.3 billion on the account of higher earnings on its investments on bonds and securities.

The Bangko Sentral ng Pilipinas (BSP), meanwhile, registered a deficit of P94.4 billion mainly due to losses incurred on its open market operations as a result of exchange rate and price fluctuations.

On the other hand, the aggregate net income from current operations of LGUs amounted to P73.6 billion due to higher internal revenue allotment and income derived from local sources.