House Majority Leader Rolando Andaya Jr. on Monday called for a review of the proposed P3.757-trillion national budget for 2019 to find ways of reducing the budget deficit.
“The numbers for 2018, as far as the country’s fiscal deficit is concerned, do not look so good. Government disbursements continue to outpace the increase in revenues,” said Andaya, chairman of the House committee on rules and a former Budget secretary.
“Both government spending and revenues are growing beyond their respective targets. As a result, government may fail to meet its deficit ceiling for the year.”
Even Budget Secretary Benjamin Diokno had admitted that the national government’s fiscal deficit for 2018 might exceed the P523.7-billion target, which is equivalent to 3 percent of the gross domestic product, Andaya said.
The fiscal deficit in 2017 was only 2.2 percent of the GDP.
“Given this development, it is time we realized that the proposed 2019 national budget prepared by DBM is out of touch with reality. We may have to reexamine the 2019 budget closely during the conference committee with the Senate,” Andaya said.
“We are walking on a tightrope and we need a really good balancing act. The DBCC insists on a smaller contractionary spending program, yet the government needs to spend more just to catch up with inflation.”
Andaya said President Rodrigo Duterte had signed Joint Resolution 3 against the advice of his economic managers, who recommended its veto. That extended the 2018 budget until the end of 2019, giving more spending room for social programs. It also threw away Diokno’s ambitious cash budgeting system.
Since the 2019 budget has yet to be enacted, Andaya said, extending the life of the 2018 budget for 2019 meant foregoing the Budget department’s proposal of having only one expenditure program for 2019.
“In effect, we will now have two sources of spending for Fiscal Year 2019: the 2019 budget and the savings of 2018, which could reach about P200 billion,” Andaya said.
“No matter how you spin it, the people on the ground are already feeling the economic pinch and an unresponsive economic plan can lead to people’s unrest.”