Govt expects less deficit by next year
THE government is confident of achieving a reduced budget deficit of P226 billion in 2011 from its programmed shortfall of P293.2 billion or down P64 billion at the back of expected faster growth next year.
Finance Secretary Cesar Purisima said the lower budget deficit next year is based on a projection that the economy will expand by 7 percent in terms of gross domestic product (GDP).
The lower deficit of P226 billion is equivalent to 2.5 percent of the GDP from a high of 3.9 percent if the deficit hits P293.2 billion in 2011 on a growth of five percent.
“It’s (lower deficit) possible if there’s a 7-percent GDP growth,” he said.
The growth is the low-end of the programmed GDP target range for 2011 from a high-end of 8 percent.
Purisima said the strong economic growth would be supplied by the successful implementation of projects under the Public-Private Partnerships (PPPs) program.
The government said construction and private services would be the two top growth drivers in 2011.
For this year, the government has programmed a revised GDP growth of 5 percent to 6 percent after the economy grew 7.3 percent in the first quarter. This was even surpassed in the second quarter with a much faster expansion of 7.9 percent amid a slackened agriculture sector.
The government has already breached its budget deficit cap for the first six months of the year with a higher shortfall of P196.7 billion from January to June or P51.6 billion in excess of the original goal of P145.2 billion.
The budget shortfall for January to June exceeded the forecast of former finance secretary Margarito Teves that the deficit for the first half will settle at P178.5 billion.
For the six-month period, the government generated revenues worth P592.1 billion while overspending the amount of P788.8 billion.
In June alone, the government posted a P34.6 billion deficit, or 14 percent higher compared with P30.2 billion in the same period last year. Dino Ng