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The country will likely meet its target for public
sector surplus this year despite the losses of state-run National
Food Authority (NFA) and the Bangko Sentral ng Pilipinas (BSP), the
Department of Finance said Monday.
Finance Undersecretary Gil S.
Beltran said public agencies can still manage to attain
P24.8-billion surplus despite the NFA’s forecast of the
Philippines ending the year with a P44-billion deficit due to this
year’s high cost of rice.
The Finance department last week
had revised its 2007 account for the public sector surplus to P36.4
billion from the original P97 billion after the central bank
registered P89.2 billion losses during the period.
Beltran attributed BSP’s losses
last year to the appreciation of the peso against the US dollar.
With the unfavorable condition of the local currency against the
greenback at end-June, he added central bank may reduce its deficit
from last year.
The Finance official also said
the bigger losses incurred by the NFA may, however, be compensated
by the surpluses of other state-financial firms and government
controlled corporations.
The Finance department expects
big surpluses to come from pension funds Social Security System and
Government Service Insurance System, Beltran added.
The BSP said it incurred losses
because it absorbed excess foreign exchange last year to keep the
peso from rising too fast. Last year, the peso shot up by 19
percent, making it Asia’s best performer.
The central bank intervenes
intermittently in the spot market, buying dollars in a process
called sterilization, to temper the peso’s gains. It enters into
currency swap arrangements with banks so the foreign exchange is not
converted into pesos to limit money supply, a brisk growth of which
is inflationary.
The latest public-sector budget
condition is a 231-percent improvement from the P5.3 billion enjoyed
in 2006.
This means the country’s public
agencies as a whole required less borrowing, thus easing the
pressure on interest rates, which have dipped to record lows in
recent months.
The 14 monitored nonfinancial
government-owned or -controlled corporations (GOCCs) posted a
combined surplus of P37.8 billion, while the social security
institutions, state-run financial institutions, and local
governments units earned surpluses of P55.7 billion, P7.889 billion
and P32.943 billion, respectively.
“The huge surplus of the 14 [GOCCs]
was mainly due to governance reform, which enhanced the ability of
the corporations to carry out greater financial discipline and
better resources management, and lessen their dependence on
subsidy,” the Finance department said.
The agency said these reforms
include the stringent review of GOCC requests for national
government support for net lending and tax subsidy, and the tighter
review and approval of guarantees on loans.
“The government financial
institution, on the account of huge net lending operating income
from investments, also made a positive contribution to the higher
than program surplus of the rest of the public sector,” the
Finance department said.
The national government last year
posted a P13-billion budget deficit, or well below the projected
deficit scenario of P63 billion.
--Chino S. Leyco
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