2005 DEFICIT TARGET SET AT P177 BILLION FROM ORIGINAL P184 B TARGET
MANILA, January 24, 2005 (STAR) By Des Ferriols - The Arroyo administration is opting for a more aggressive deficit reduction program, revising its 2005 deficit target to P177 billion from the original target of P184 billion even with the additional debt burden absorbed from the National Power Corp. (Napocor).The Development Budget Coordinating Committee
(DBCC) disclosed over the weekend that the new 2005 fiscal targets are based on the adjustments from the incremental revenues that government expects to get from the new excise taxes on cigarettes and alcohol.
DBCC chairman and Budget Secretary Emilia Boncodin told reporters that the revision in the fiscal target reflects the expected increase in revenue collections arising from revenue measures that would become effective in 2005.
"We have not factored in the revenue impact of the measures that have not been passed by Congress, only those measures that have passed and will be implemented this year," Boncodin said.
At this level, the deficit would be equivalent to 3.5 percent of gross domestic product, lower than the original target of P184 billion which would have been around 3.6 percent of GDP.
According to Boncodin, the DBCC expected to make the necessary adjustments in the target for 2005 and succeeding years as other measures are passed by Congress.
For 2005, Boncodin said revenues are expected to reach P783 billion. This amount includes about P551 billion targeted by the Bureau of Internal Revenue and about P146 billion representing the target collection of the Bureau of Customs.
On the other hand, Boncodin said the Department of Budget Management expected the 2005 expenditures to reach P960 billion including the cost of bureaucratic streamlining and restructuring.
Boncodin said the Arroyo administration expected to spend at least P7 billion to P8 billion for the retirement benefits of government personnel with the implementation of the rationalization program.
Boncodin said the government set aside around P10 billion in 2004 for the retirement of personnel but the government estimated that it would save at least P4 billion from the voluntary retirement program.
Along with the revision of the national deficit target for 2005, Boncodin said the DBCC also revised the projected consolidated public sector deficit from five percent of GDP to about 4.7 percent of GDP.
The CPSD represented the consolidated deficit of the National Government and all government-owned and controlled corporations (GOCCs) whose budgets are funded by the general appropriations act.
In 2004, the budget deficit reached P186.1 billion, about P10 billion below the target for the year and P12 billion lower than 2003 deficit.
Reported by: Sol Jose Vanzi
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