THE Department of Budget and Management (DBM) expects the national budget to reach P5.67 trillion in 2022.
The uptrend in government spending will be sustained in the medium-term, the Budget department said on Thursday.
This year, the obligation budget is P3.35 trillion, an 11.6 percent increase from 2016.
Revenue is expected to reach P2.43 trillion, a 10.5 percent increase, while disbursements total P2.91 trillion, up 14.1 percent. In line with a programmed deficit of 3 percent of GDP, the fiscal balance is projected at P482 billion in 2017, the DBM stated.
The Development Budget Coordinating Committee (DBCC) has recently approved a budget ceiling of P3.84 trillion for the 2018 national budget.
This is P490 billion or 14.6 percent higher than the P3.35 trillion budget for the current year. Projections show that revenue is targeted to reach P2.91 trillion while disbursements increase to P3.44 trillion. Maintaining the deficit level will also translate to a fiscal balance of P532.5 billion.
The 2017 budget is dubbed as the “Budget for Real Change.”
The 2018 Budget is now being prepared by the DBM and is set to be submitted to Congress before President Duterte delivers his second State of the Nation Address on July 24, 2017.
The Comprehensive Tax Reform Package sponsored by the Department of Finance is expected to bolster revenue collection to 15.3 percent of gross domestic product (GDP) in 2017, and up to 17.7 percent of GDP in 2022. Once enacted into law the tax reform package is expected to net more than P200 billion in yearly revenues, the Budget department said.
The DBM also sees the expansionary fiscal policy to spur increased government spending, particularly on public infrastructure and social services.
This fiscal strategy will be made possible by maintaining the deficit-to-GDP ratio at 3 percent while improving revenue effort through tax policy and tax administration reforms.
The deficit will be financed primarily through borrowings, following an 80-20 mix in favor of domestic sources to minimize foreign exchange risks, it added.
The national debt will stay manageable and sustainable, the DBM noted, saying the debt-to-GDP ratio is on a downward trajectory from 42.2 percent last year to 36.7 percent by 2022.