BUDGET COMMITTEE REVISES TARGETS, EYES BALANCED BUDGET BY 2009
MANILA, July 18 , 2004 (STAR) By Des Ferriols - The Development Budget Coordinating Committee (DBCC) has revised its deficit target, opting for a drastic deficit reduction towards the end of the Arroyo administration.
The government has made a commitment to reduce its deficit to at least P140 million by 2009 but based on the revised schedule, the government said it would reduce its deficit to zero on that year.
Records disclosed that the DBCC intends to keep its 2004 and 2005 deficit target to P197.815 billion and P184.526 billion, respectively.
By 2006, however, the government hoped to reduce this deficit to P161.769 billion and further to P126.999 billion by 2007.
By 2008, the national budget deficit was expected to go down to P79.032 billion before taking a sharp drop to zero deficit in 2009.
The original deficit reduction program had a much softer trajectory and by 2009, a deficit of at least P140 million was still in the program. The budget was not originally programmed to balance until 2010.
However, there is still no clarity on how the Arroyo administration intended to do this, especially since it has decided to assume at least P500-billion worth of obligation of the National Power Corp. (Napocor), a move that was expected to stress out its already heavy debt burden.
The Arroyo administration has approved the four-point program that includes at least 11 "very painful but critical" tax measures, including the controversial shift to gross income taxation and the increase in the value added tax rate.
If implemented in full, the program was expected to generate P100 billion on the first year, still barely enough to meet the incremental funding requirements of the government.
Finance Secretary Juanita Amatong told reporters after the meeting that the president has given the "go signal" on the four-point agenda that prioritized the administrationís macro-economic and fiscal program, power sector reforms, banking and financial reforms and infrastructure and investments program.
Amatong said the program included all the proposed tax measures but the administration has not narrowed it down to an actual list of priority bills that would be presented before Congress as urgent measures.
According to Amatong, the DBCC has not fully studied all the proposed measures, including the controversial proposal to shift from net to gross income taxation. "Suffice it to say that nothing has been ruled out, thatís as much as I can say," Amatong said.
"This includes the GIT, the proposed increase in the value added tax rate and even other measures that have not been ruled out."
Amatong explained that while there was a need to improve tax administration, the increase in revenues from such an effort would still not be enough to address the funding requirement.
Reported by: Sol Jose Vanzi
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