Public sector deficit to reach P120 B

The consolidated public sector deficit (CPSD) for 1999 is likely to hit P120 billion, much higher than the original target of only P107 billion, Budget Secretary Benjamin Diokno said yesterday.

According to Diokno, the expected P120 billion CPSD is equivalent to about 3.9 percent of the country's gross national product (GNP).

At the same time, he said the 1999 budget deficit of the National Government has been adjusted downwards to P111.6 billion from the preliminary figure of P113 billion due to the payment of about P2 billion in taxes from the Bureau of Customs.

The CPSD is the combined deficits of the National Government, the government-owned or controlled corporations (GOCCs), the old Central Bank, the Bangko Sentral ng Pilipinas, government financial institutions and local government units (LGUs).

The CPSD is one of the major performance criteria monitored by the International Monetary Fund (IMF) because it indicates the government's financial health and its ability to finance its loans from the financial market.

Diokno, together with Finance Secretary Jose T. Pardo, reiterated that the government is sticking to the P62.5 billion budget deficit target for this year.

Based on the CPSD figure, the old Central Bank incurred a deficit of P20.52 billion while the monitored GOCCs recorded a deficit of P9.73 billion. The BSP also reported a deficit of P4.6 billion.

Those which posted a surplus were the Social Security System and the Government Service Insurance System with a combined surplus of P30.9 billion, and the LGUs with P3.2 billion.