By Joann Santiago
MANILA, Sept 2 (PNA) — While some advance countries are trying to address ballooning budget deficit the Philippines, on the other hand, is facing some hurdles on meeting its programmed budget gap.
As of end-July 2014, the government’s budget deficit stood at P55.7 billion, way below the P266.2 billion ceiling for the year.
It was only last June that the deficit for the month posted a big jump after surging to P62.49 billion, 639 percent more than year-ago’s P8.45 billion.
Budget and Management Secretary Florencio Abad is confident that spending in August will further increase noting that preliminary data from the Bureau of the Treasury (BTr) “looks better.”
The government has a P145.8 billion deficit ceiling for the first quarter of the year, P46.8 billion for the second quarter, P42.9 billion in the third quarter and P30.8 billion in the last quarter.
On the other hand, spending program for the first quarter is at P574.3 billion while it is P604.5 billion for the second quarter, P551 billion for the third quarter and P554.5 billion for the fourth quarter.
Abad attributed the lower-than-programmed deficit to “institutional and structural problems.”
He said there are also some agency-specific problems because of the failure of the government agencies to meet the new requirements.
For one, farm-to-market roads and irrigation projects are now required to have a geo-mapping so that the projects can be seen, monitored and validated even through Google Map.
Abad said they have programmed to release P12 billion for farm-to-market road projects but because of the geo-tagging issue only P4 billion has been released so far.
”We are insisting that we will not release them (funds) unless they (the projects) are geo-tagged,” he stressed pointing out that this is part of the government’s reform agenda to address corruption.
Abad explained that implementation of these governance reforms will “take a while but once the agencies are able to familiarize with the new system we will move faster.”
Another reason for the lower government spending in the first half of the year is the delay in the release of funds intended for conditional cash transfer (CCT) program beneficiaries.
This was partly attributed to the relocation or movement of people who were affected by Typhoon Yolanda (Haiyan), particularly in Eastern Visayas, last November.
The late release of billing for collectibles for Philippine Health Insurance Corporation (PhilHealth) benefits is another factor in lower government spending.
Abad said some P35 billion was spent last June alone for PhilHealth-related expenses.
He said economic managers remain positive that the government will be able to meet the government’s expenditure program to boost domestic growth.
He said they “are hoping that we can hit the maximum because as I’ve said we want to spend as much as we can.”
“If you go by experience we have really been below program on the deficit cap but as I’ve said as much as possible I want to hit the maximum to keep the economy moving,” he said.
He also noted that if the government was able to meet its spending program for the second quarter of the year growth, as measured by gross domestic product (GDP), would have reached the seven percent level.
”We’re still thinking that the third quarter can even be better than the second quarter. If you look at the expenditure growth it’s zero growth. So we can in fact accelerate spending more and it’s certainly a good signal to the private sector that the government wants to intensify development,” he said.
Growth in the second quarter of the year improved to 6.4 percent from quarter-ago’s 5.6 percent driven by the industry sector.
This growth is the second highest in the ASEAN, same as Malaysia, and second to China. However, it is lower than year-ago’s 7.9 percent.
For the first half of the year, growth stood at six percent.
The government’s full-year growth target is a range between 6.5-7.5 percent.
Abad said hitting the full-year deficit target is “still a possibility.”
“As we move away from the first quarter that really means more intensified implementation of the rehabilitation program, we will be able to get the capacities improve, better able to implement the many PPP projects that are on stream (and) improve government spending,” he said.
To date, eight projects have been awarded under the public-private partnership (PPP) initiative and some of these are under construction.
Among these projects are the four-kilometer, four-lane DaangHari-SLEX Link Road; PPP for school infrastructure project phase I and II; the four-lane elevated Ninoy Aquino International Airport (NAIA) Expressway Project, and the modernization of the Philippine Orthopedic Center (MPOC). (PNA)