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Volatility in the global economy is causing the Department of
Finance to doubt if the government can still maintain its target of
balancing the budget this year.
Finance Secretary Margarito Teves said Monday
that the government is thinking about possibly suspending the
balanced-budget program amid the slowdown in the US economy. He
clarified, though, that they are sticking with their original plan
of not incurring budget gaps.
“Yes, we’re thinking about it due to the US
slowdown,” Teves told reporters, referring to the possible
suspension of the programmed balanced budget.
Standard Chartered Bank had said balancing the
budget this year becomes more challenging as a result of an expected
slowdown in the Philippine economy and a “moderation” in
remittances of overseas Filipino workers.
Standard Chartered added that the target may be
impossible to meet because the dollar is expected to correct itself
in the second and third quarters as a result of deterioration of
trade balance in the near term.
The bank has already reduced the peso from
overweight to neutral.
Finance Undersecretary Gil Beltran has accepted
the bank’s comment on the country’s future fiscal situation as
the government sees this as arising from the possible slowdown in
the US economy and from higher oil prices.
But the Finance department, he said, is sticking
with its plan to have a balanced budget this year.
The department was under pressure to have a
balanced budget after it posted a nearly zero deficit last year of
P9.4 billion, thanks to the sale of state assets.
Agost Benard, Standard & Poor’s associate
director, said they want to see a balanced budget and a sustainable
improvement in the country’s fiscal position.
“I am hopeful it will be successful, be
replicated this year as well with the increase in revenues, increase
in contribution from tax revenues as distinct from privatization. I
am hopeful that the fiscal position will continue to improve,”
Benard added.
The credit-rating agency said it wants to see
more improved revenue collections by the Bureau of Internal Revenue
(BIR) and the Bureau of Customs.
The two bureaus are asking for much lower
revenue goals this year, despite the shortfalls they recorded last
year.
The BIR contributes around 70 percent of the
government’s tax revenues, and Customs, around 30 percent.
It posted a shortfall last year (P712.098
billion against the goal of P765 billion). Customs missed its target
of P228 billion after it recorded only P210.6 billion.
This year, Customs is targeting P254.4 billion,
and BIR, P844.95 billion.
Government revenue this year is set to be
boosted by P30 billion in privatization proceeds, from P94 billion a
year ago.
Apparently, the government thinks that the
revenue collections of the two bureaus and the privatization
proceeds will not be enough to see the balanced-budget program
through.
It is getting help from a series of road shows
to offer its priority infrastructure projects to local and
international investors, officials at the National Economic and
Development Authority said.
Socioeconomic Planning Secretary Augusto Santos
said the government will list 10 priority infrastructure projects
that can be offered through build-operate-transfer agreements and
joint ventures with foreign governments or pushed for funding
through official development assistance.
Santos added that the old list of 10 priority
projects need to be updated, citing that some of these projects were
awarded to private firms or multilateral lenders. These projects are
Panguil Bay, Light Rail Transit Authority Line 1 North Extension,
Tarlac-La Union Expressway, Metropolitan Waterworks and Sewerage
System Bulk Water, Wawa River, Ambuklao-Binga Power Complex, Binga
Plant, Bicol Emergency Power Restoration, North Luzon Expressway
Extension, and Quirino Highway Rehabilitation.
The new 10 high-impact projects will fall under
the government’s updated Comprehensive and Integrated
Infrastructure Program for 2007 to 2010.
Under the updated program, the government has
set about P2.03-trillion worth of infrastructure projects that would
be implemented until the end of President Gloria Arroyo’s term in
2010.
Of the total amount, the transportation sector
takes the major chunk with P753.24 billion for 521 projects,
followed by power with P527.05 billion for 206 projects, and water
with P425.66 billion for 270 projects.
The rest is for social infrastructure with
P203.97 billion for 150 projects, communications with P63.07 billion
for 30 projects, relending programs with P27.73 billion for 27
projects, and support for agrarian reform communities with P25.47
billion for 24 projects.
The National Economic and Development Authority
said the projects will be funded by the national government with
around P1.09 trillion.
-- Chino S. Leyco And Darwin G. Amojelar
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