Diokno says P1.16-trillion budget deficit seen with revenue shortfall next year
The government expects to borrow from mostly domestic sources to cover the projected P1.16-trillion budget deficit next year, Finance Secretary Benjamin Diokno said Friday.
At a budget briefing for the House of Representatives, Diokno said total revenue projections for 2023 came to P3.6 trillion against a budget of P5.268 trillion, resulting in a deficit of P1.16 trillion.
When Albay 1st District Rep. Edcel Lagman asked if the projected budget shortfall would be financed through new borrowings, Diokno said yes.
“We have to finance [through borrowings]. We will rely heavily on domestic sources so there will no foreign exchange risks,” he said.
He added that 75 percent of the borrowings would come from local sources.
Diokno said the government would not need to borrow as much as the previous administration, which went heavily into debt to deal with the COVID-19 pandemic.
“What is really relevant is debt as a percentage of GDP (gross domestic product), the size of the economy, and that has been declining,” Diokno said.
As of end-June 2022, the debt-to-GDP ratio stood at 62.1 percent, lower than the 63.5 percent debt level as a percentage of GDP in the first quarter of the year.
“Our debt-to-GDP ratio will progressively decline. It will be somewhere in the neighborhood of 50 percent by the end of 2028,” Diokno said.
By the end of the Marcos administration in 2028, the debt level will be down to 52.5 percent, he said.
Before the COVID-19 pandemic, the country’s debt-to-GDP ratio hit a record low of 39.6%.
“Our economy will also increase… our debt in relation to the size of economy that is actually declining. Our current situation is much, much better than before,” Diokno said.
Speaker Martin G. Romualdez on Monday morning said the House would ensure that the proposed P5.268 trillion budget for 2023 would sustain economic growth.
“We will make sure that each bit of spending will contribute to our goal of reigniting the fires of our economic forges, and at least propel the country to reach economic growth at pre-pandemic levels,” Romualdez said.
“Every centavo of this national budget will be spent wisely to implement projects and programs putting primordial consideration into saving lives; building and protecting communities; and making our economy strong and more agile,” Romualdez said.
Ako Bicol Rep. Elizaldy Co, chairman of the House appropriations body, said they would do everything possible to make sure that President marcos’ first full-year budget would be passed into law before the Christmas break.
“When the speaker received it [the proposed budget] last Monday, the instruction was clear, for the committee to act with dispatch without sacrificing its independence to pass this budget before the Christmas break,” he said.
At the House briefing, Budget Secretary Amenah Pangandaman said the P5.268 trillion national budget for 2023 will serve as a “springboard for the economy’s full-speed recovery” and address the immediate and pressing concerns of Filipinos in the near- and medium-term.
The proposed budget’s first pillar intends to strengthen the Filipinos’ purchasing power by covering the first three items in the eight-point socioeconomic agenda, which include food security, improved transportation, and affordable and clean energy, the Department of Budget and Management (DBM) said.
The DBM noted that the Department of Agriculture (DA)’s banner programs, including the P30.55-billion National Rice Program, would receive a larger share in 2023 to ensure food security in the country.
Around P1.20 trillion will also be earmarked for the “Build Better More Program” to sustain the administration’s continued push for infrastructure development, the DBM added, noting that it is equivalent to 5 percent of the gross domestic product (GDP) for road, rail, transport, and flood control infrastructure.
The DBM said the bulk of the infrastructure budget would go to the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr).
About P272.87 billion will be used to finance the DPWH’s “efficient” transport and logistics system for goods and services, while some P167.12 billion will be allocated for the DOTr’s establishment of an “efficient and reliable” mass public transportation system.
The DBM also noted that the Department of Energy would receive P476 million to realize the government’s bid for “affordable and clean” energy.
Of the P476 million, around P145.21 million will be earmarked for the DOE’s Renewable Energy Development Program, P252.35 million for the Energy Efficiency and Conservation Program, and P78.86 million for the Alternative Fuels and Technologies Program.
The budget for the DOE’s programs will complement the continuation of the National Electrification Administration’s (NEA) P1.63-billion Sitio Electrification Project, the DBM added.
“Finally, amid the expected continuing elevated cost of fuel, the budget for the DA’s Fuel Assistance for Farmers and Fisherfolk will be doubled at P1 billion. Of this amount, P510.45 million will be for corn farmers, while the remaining P489.55 million will be for the fisherfolk,” the agency said.
Around P2.5 billion will also be allocated for the DOTr’s Fuel Subsidy Program for the transport sector affected by the rising fuel prices.
Pangandaman said the second budget pillar seeks to protect the Filipinos from the persisting effects of the COVID-19 pandemic and future unprecedented catastrophes by strengthening social and health care service and ensuring the safe resumption of face-to-face classes.
“The government will be providing around P206.50 billion of cash assistance and subsidy programs, ” Pangandaman said.
The DBM said the Department of Social Welfare and Development’s (DSWD) Pantawid Pamilyang Pilipino Program (4Ps) will receive a higher allocation of P115.61 billion for education and health grants, as well as rice subsidy to 4.4 million households.
The DBM admitted, however, that the government does not have enough funding to address the shortage of classrooms.
“There is a separate budget for school buildings at P13.9 billion, [but] we don’t have enough funds to provide for the backlog of the classrooms,” Pangandaman said.
Pangandaman was responding to Gabriela party-list Rep. Arlene Brosas, who asked why the proposed 2023 budget only earmarked P13.9 billion for school buildings and P2.5 billion for housing and community facilities.
Brosas said that such amounts are dwarfed by the infrastructure budget for road networks (P429 billion), railways (P105 billion), and right-of-way projects (P28.6 billion).
Brosas then said classrooms and socialized housing should get more funding, given the huge backlog of 40,000 classrooms and 6.5 million housing units.
In other developments:
• Cagayan de Oro City Rep. Rufus Rodriguez urged the House of Representatives to restore the P22-billion cut in appropriations for Mindanao in the proposed P5.268-trillion 2023 national budget. He questioned the reduction in funds for Mindanao from P650 billion this year to P628 billion next year, or from 13 percent to only 11.9 percent of the national budget.
• Camarines Sur Rep. Luis Raymund, meanwhile, urged fellow legislators to support the proposal to realign funds in the proposed national government budget to provide the money needed for interventions, like Libreng Sakay, to continue the assistance now extended to the neediest sector.
• Several history and cultural-related agencies of government could see their budgets reduced if the proposed 2023 national budget is passed into law, Gabriela party-list Rep. Arlene Brosas said Friday. She said the administration has imposed budget cuts on key agencies on history and cultural preservation, with the National Commission for Culture and Arts suffering the largest decline.