DBCC sets P266.2-B deficit target

MANILA, Philippines - The Development Budget Coordination Committee (DBCC) has pegged the country’s budget deficit for 2014 at P266.2 billion or two percent of the country’s gross domestic product (GDP).

The target is in line with the Aquino Administration’s policy of fiscal consolidation, which calls for the reduction of the government budget deficit to just two percent of GDP from 2013 to 2016.

 â€œWe remain committed to our fiscal consolidation strategy, which should help us reduce our debt stock and create more fiscal space for programs and projects that support inclusive economic growth. Likewise, we intend to further improve the pace, efficiency, and quality of public expenditures,” Budget and Management Secretary Florencio B. Abad said yesterday.

Abad clarified that while the budget deficit program has increased nominally over the last three years, the government nonetheless expects the country’s debt burden to decrease by an average of 1.2 percentage points annually. This will bring the outstanding debt-to-GDP ratio down from 50.9 percent in 2011 to 46.2 percent in 2014.

The DBM is also eyeing a P2.29-trillion disbursement program for 2014, which amounts to 17.2 percent of GDP. This represents a significant increase of 15.5 percent or P307.5 billion over the target set for this year, which was pegged at P1.98 trillion.

 â€œWith our proposed 2014 disbursement target at 17.2 percent of GDP, we can refine our strategy for focused, performance-driven disbursements next year.

Already, we plan to bolster spending for public infrastructure, as well as drive more investments toward the agri-fisheries, manufacturing, and transportation industries, among other promising sectors,” Abad said.

 â€œWe’re laying down the groundwork for sustainable and inclusive growth in the country, beginning with swift, high-impact disbursements. As remarkable as our gains in 2012 have been, much work still needs to be done so we can drive more job opportunities to our shores and attract more foreign investments and international trade. With good governance underscoring our efforts, we’re confident that our fiscal program will indeed translate to real, immediate, and sustainable benefits to all Filipinos,” he added.

The government expects gross borrowings to reach P738.4 billion in 2014, up 38 percent in 2013. Of the this amount, P598.1 billion will comprise the domestic component while the balance of P140.3 billion will be sourced from foreign investors.