DEVPT BUDGET COORDINATION COMMITTEE SCALES DOWN DEFICIT TARGET
MANILA, February 23, 2005 (STAR) By Des Ferriols - The Development Budget Coordination Committee (DBCC) has approved the proposed P180-billion deficit target for 2005, about P4 billion lower than the original P184.5-billion target set in 2004.
The DBCC has been pushing the numbers since last September before coming to the decision to lower the ceiling based on the revised revenue estimates following the adjustment in excise taxes on alcohol and tobacco.
The DBCC disclosed yesterday that revenues for 2005 are expected to reach P783.2 billion, up from the original target of P730.515 billion. On the other hand, expenditures are expected to reach P963.2 billion, up from P915.041 billion.
As a percentage of gross domestic product (GDP), the DBCC said the revised 2005 deficit target was equivalent to 3.4 percent, lower than the original target of 3.6 percent.
The DBCC said the adjustment already incorporated some P18.1-billion additional interest payments as the National Government assumed P200 billion of National Power Corp.ís (Napocor) debts.
Following its late Monday meeting, the DBCC also set its quarterly deficit targets for 2005 at P77.8 billion for the first quarter, P98.5 billion for the first semester of the year and P145.9 billion for the three quarters and finally to P180 billion by the end of the year.
"The revenue projection for the year already incorporates the impact of the implementation of the sin tax law, the two percent tariff on petroleum imports and some administrative measures," the DBCC said.
According to the DBCC, expenditures net of debt servicing would track 2004 levels, with interest payments frontloaded during the first part of the year.
At some point, the DBCC even considered bringing the 2005 deficit target down to a more aggressive P177 billion but the failure of Congress to pass the critical increase in the value added tax (VAT) would prevent the Arroyo administration from generating the necessary revenues on time.
For this year, the Bureau of Customs (BOC) is expected to generate a total of P151.184 billion while the Bureau of Internal Revenues (BIR) is expected to collect at least P546.899 billion.
Along with the revision of the national deficit target for 2005, the DBCC also revised the projected consolidated public sector deficit from five percent of GDP to about 4.7 percent of GDP.
The CPSD represents the consolidated deficit of the National Government and all government-owned and controlled corporations (GOCCs) whose budgets are funded by the general appropriations act.
Reported by: Sol Jose Vanzi
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