GOVERNMENT SETS BUDGET CEILING OF P1.136T FOR 2007
MANILA, MAY 1, 2006 (STAR) By Des Ferriols - The government has set an "indicative budget ceiling" for 2007 of P1.136 trillion with the resulting budget deficit at P63 billion, eventually going down to zero as scheduled in 2008, the Department of Budget Management (DBM) said Friday.
Under the proposed 2007 budget, government revenues are targeted to reach P1.113 trillion, with total expenditures pegged at P1.176 trillion.
"This budget is consistent with our goal of balancing the budget in 2008," said Budget Secretary Rolando Andaya Jr. "These are good figures to pursue on the way to a zero-deficit era."
Based on the DBM’s indicative budget for 2007, Andaya said the 2007 budget deficit would be cut down to 0.9 percent of gross domestic product (GDP) from 2.1 percent this year.
Expenditures, on the other hand, would be equivalent to 17.8 percent of GDP – slightly higher than this year which indicate that public spending would support the real economy much better than it did in the last five years.
Andaya said the government would use a "planning ceiling" of P340.8 billion to personal services; P591.6 billion for maintenance and other operating expenditures and P204.3 billion for capital outlay which cover infrastructure spending.
He said the 2007 indicative budget is based on what he called "conservative revenue estimates" that do not include revenue measures coming into effect in 2007.
"But the impact of the reformed value-added tax (VAT) program is already incorporated in the fiscal program underlying the budget ceiling," he said.
According to Andaya, debt service expenses would drop to 4.7 percent of GDP under the 2007 budget from P340 billion this year (5.7 percent of GDP) to P316.3 billion.
Andaya said the drop would be due to the improvement in the government’s fiscal position resulting to a corresponding decline in borrowing directly due to the narrowing the budget deficit.
The bulk of the budget increase, Andaya explained, would be used to finance infrastructure projects as the administration proposed to increase the capital spending from P145.9 billion this year to P204.3 billion.
Congress has just approved the 2006 budget but the DBM said budget preparations for 2007 began as early as last month as the Development Budget Coordinating Committee (DBCC) deliberated on the macroeconomic assumptions that would underpin the proposed budget level.
Chief News Editor: Sol Jose Vanzi
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