Wake Up, Philippines!

National Government incurs P68.1-billion deficit in 2008

Posted in Budget, dof by Erineus on April 20, 2009

By Iris C. Gonzales Updated February 26, 2009 12:00 AM

MANILA, Philippines – The National Government (NG) incurred a budget deficit of P68.1 billion in 2008, well below the target of P75 billion, Finance Secretary Margarito Teves said yesterday.

At the Philippine economic briefing yesterday, Teves said the 2008 deficit represents 0.9 percent of gross domestic product (GDP) or the country’s total economic output.

“This was an over-performance of P6.9 billion compared with our programmed deficit of P75 billion or one percent of GDP for the year,” he said.

Revenue collections reached P1.202 trillion or P22.3 billion below the program for the year while expenditures reached P1.271 trillion or P29.1 billion below the program.

Of the P1.202 trillion in revenues, the Bureau of Internal Revenue (BIR) collected P778.6 billion or P31.4 billion below the revised collection goal of P810 billion while the Bureau of Customs (BOC) generated P260.2 billion for the year or P13.8 below its revised revenue target of P274.1 billion.

The Bureau of the Treasury (BTr) collected P63.7 billion while revenues from other offices amounted to P100.4 billion.

In December alone, the National Government incurred a deficit of P1.4 billion as revenues reached P121.3 billion while expenditures reached P122.8 billion. The December budget gap was narrower than the P4.3 billion deficit posted in November 2008.

During the month, the BIR collected P57 billion while the BOC collected P18.8 billion. The BTr generated P6.3 billion in December while revenues from other offices amounted to P39.2 billion during the period.

Teves expressed hopes that the two government agencies would be able to raise enough revenues for the year to be able to cope with the global financial crisis.

He is asking Congress to support pending legislative measures that would enhance tax revenues.

These include the measure to rationalize tax incentives and the so-called simplified net income tax scheme (SNITS) measure. Another measure is the proposal seeking to raise cigarettes on alcohol and cigarettes.

“The unprecedented challenges confronting us this year require extraordinary strength. We have to be tough to overcome these serious threats to fiscal and economic stability,” Teves said.
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RP allots P681.5 B for debt service next year

Posted in Debt Service, dof, Sovereign Debts by Erineus on April 20, 2009

By Iris C. Gonzales Updated September 03, 2008 12:00 AM

The government has programmed to spend P681.516 billion for debt service payments in 2009, 7.1 percent higher than this year’s allotment of P636.075 billion, the Bureau of the Treasury (BTr) reported yesterday.

Of the amount, the government plans to spend P482.138 billion for domestic debts and P200.378 billion for foreign loans.

The P482.138-billion debt service allocation for domestic obligations covers payments for principal amortization, amounting to P290.031 billion and interest payments, amounting to P191.107 billion.

On the other hand, the P200.378-billion debt service allocation for foreign loans covers payments for principal amortization amounting to P88.835 billion and interest payments of P111.543 billion.

Next year’s debt service allocation is P45.441 billion higher than this year’s payments amounting to P636.075 billion.

This amount comprises of payments for domestic obligations (P448.357 billion) and payments for foreign loans (P187.718 billion), data further showed.

The P448.357-billion debt service allocation for domestic obligations covers principal amortization amounting to P264.667 billion and interest payments of P81.305 billion.

On the other hand, the P187.718-billion debt service allocation for foreign loans covers principal amortization (P81.305 billion) and interest payments (P106.413 billion).

The government has been trying to reduce its debt service payments to have more funds for the more necessary expenditures such as infrastructure and social services spending.

However, fiscal authorities have decided to postpone the government’s fiscal consolidation program due to the difficult global economic tide this year. As such, the government expects to incur a deficit of P75 billion this year as it has already postponed its balanced budget goal to 2010.

For 2009, the government is looking at incurring a deficit of P40 billion. The government is seeking a budget of the P1.415 trillion for 2009, which is premised on revenues of P1.393 trillion.
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Government urged to revise budget allocation for debt servicing

Posted in Budget, Debt Policy, Debt Service, dof, Sovereign Debts by Erineus on April 20, 2009

By Ma. Elisa P. Osorio Updated December 30, 2008 12:00 AM

The Free Trade Alliance (FTA) is urging the government to revise its policy on the payment of foreign debt and instead use the money for projects that would create jobs for Filipinos especially the overseas Filipino workers who are expected to be displaced because of the global recession.

“We also demand that the government immediately put a halt to the senseless automatic appropriation of two-thirds of the national budget for debt servicing,” the FTA.

“We should instead adopt the Argentinian budgeting system, which makes allocation for debt servicing only after urgent adequate allocations have been made for urgent and priority social spending,” the group said.

In a resolution signed during the recently concluded national forum on “Bailing out the Philippine Economy” the FTA said the country, like other nations, need a stimulus package in order to help pump prime the economy.

The government must increase its spending especially on infrastructure and job creation projects in order to spur the economy.

“The Philippines need a large stimulus package directed at the domestic market to preserve and create millions of jobs,” the group said.

“The government should be able to spend as much as it can on productivity-raising infrastructures such as school buildings, renewable energy, communal irrigation projects, farm-to-market roads, harvest silos, barangay health clinics, public transport systems and so on,” FTA said.

Likewise, the FTA said the government must re-think its policy of opening up the local market to imported products.

Earlier the government removed the duty for the importation of certain products like cement.

FTA said this is not the time to allow cheaper products to enter the country. Instead, the government must help protect local industries in order to keep local jobs.

“We urge our government and policy makers to immediately put in place the much-needed safety nets for our working people, including our industrialists and entrepreneurs. One effective safety net, to preserve jobs and industry, is to adjust our industrial and agricultural tariffs toward our maximum bound tariff commitments to the WTO (World Trade Organization),” the group said.


RP ranks high in fin’l systems standards

Posted in dof, Finance by Erineus on March 27, 2009
March 26, 2009, 8:20pm

The Philippines placed 26th among 81 countries surveyed in terms of financial systems standards but was still at the bottom half of the list in the business indicator index, a recent report of eStandards Forum of the U.S. Financial Standards Foundation showed.

Based on the forum’s 12 Key Standards for Sound Financial Systems, the country’s compliance level was scored at 52.50 reflecting medium overall compliance, which brings the Philippines to the 26th place of 81 countries reviewed.

The 12 Key Standards for Sound Financial System are: Macroeconomic Policy & Data Transparency, data dissemination, transparency monitoring policy, transparent fiscal policy; Institutional Market Infrastructure, insolvency, accounting corporate governance, auditing antimony laundering, payment
systems; Finance Regulation Supervision, banking supervision, securities regulation, insurance supervision.

The eStandards Forum, which also reviews the Business Indicator Index, also reflects the country’s political, economic and business model versus an ideal best-practice benchmark.


Budget deficit could swell to as high as P300 billion

Posted in Budget, dof by Erineus on March 25, 2009

By Iris C. Gonzales Updated March 25, 2009 12:00 AM

MANILA, Philippines – The country’s budget deficit could swell to a range of P257 billion to P300 billion this year if the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) fail to meet their revenue targets and if the government is unable to privatize state-owned assets this year, Socioeconomic Planning Secretary Ralph Recto said yesterday.

Recto said the figures are based on the latest assessment of the National Economic and Development Authority (NEDA) of the economy this year.

“The worst case scenario is that the deficit will hit P257 billion if BOC will not get enough revenues because imports are down but it could even hit P300 billion if BIR collections are also down,” Recto said.

NEDA is set to recommend this worst-case scenario to the interagency Development Budget and Coordination Committee (DBCC) for consideration, Recto said.

The P257 to P300 billion also considers the possibility that the government may not be able to privatize any state-owned asset this year because of poor economic conditions.

Recto, however, stressed that the DBCC has yet to consider NEDA’s latest assessment.

The Finance department has revised its budget deficit ceiling for 2009 to P177.2 billion from the previous assessment of P102 billion due to the impact of the global financial turmoil.

The government has reduced the target of the BIR for 2009 by P45.2 billion to P865.5 billion from the revised assessment of P910.8 billion. Under the proposed 2009 budget, the BIR is tasked to collect P965 billion this year. Last year, it missed its P845 billion revenue target after it only managed to collect P778.2 billion.

The government also slashed the revenue target of the BOC by P39.8 billion to P277.2 billion instead of P317 billion. It was originally tasked to collect P310 billion this year.