THE Department of Budget and Management (DBM) is eyeing a much higher national budget of P4.506 trillion for next year as it sees government spending continue to rise amid the Covid-19 pandemic.
Budget Assistant Secretary and spokesperson Rolando U. Toledo said on Thursday this amount is up by nearly 10 percent from this year’s P4.1-trillion budget and is equivalent to 21.4 percent of GDP.
This is also 3.94 percent higher than what was earlier approved by the Cabinet-level Development Budget Coordination Committee (DBCC) in May this year. However, this was 2.89 percent lower than the P4.64-trillion initial spending plan also greenlighted by DBCC in December last year.
“The budget ceiling has been increased from P4.335 trillion to P4.506 trillion to provide sufficient budget support for programs, activities and projects that will address the Covid-19 pandemic such as the procurement of PPEs [personal protective equipment] and Covid-19 vaccine, basic education programs of the DepEd
[Department of Education] to ensure learning continuity, and programs that support ICT requirements for network connectivity and digital technology, among others,” Toledo said in a message to BusinessMirror.
Budget Secretary and DBCC chairman Wendel E. Avisado said in an interview with DZMM Teleradyo that the economic team has yet to approve the new amount for the proposed 2021 budget.
Finance Assistant Secretary Maria Teresa Habitan told the BusinessMirror the increase in the proposed 2021 budget also resulted from the Economic Development Cluster meeting when implementing agencies were asked which of their infrastructure projects can be accelerated per their work plan.
“The idea is for ensuring that whatever budget is approved for 2021 will assist economic recovery the most,” Habitan said.
In May, the DBCC also approved via ad referendum a P1.1310-trillion public infrastructure program, which is equivalent to 5.3 percent of GDP, in a bid to push the completion of a number of flagship projects for 2021 and 2022. From the reduced 4.6 percent of GDP this year due to reallocation of the budget to health and social amelioration programs, this upward push of the infrastructure program is expected to create some 140,000 to 220,000 additional jobs through direct and indirect employment.
Aside from improving the health sector to address the pandemic, the government’s budget priorities for next year include ensuring food security, enabling a digital government and economy, and helping communities adjust to the “new normal.”
While the DBCC expects the Philippine economy to contract by as much as 3.4 percent this year, it is also projecting the country’s economy to recover next year and post a GDP growth of 8 to 9 percent.
Economic managers are also expecting to gradually bring down the country’s budget deficit next year to P1.429 trillion or 6.6 percent of GDP from P1.613 trillion or 8.4 percent of GDP this year. They also expect the country’s debt-to-GDP ratio next year to rise to 51.5 percent from 49.8 percent this year.
A budget deficit occurs when expenditures exceed revenues, while debt-to-GDP ratio is used to measure a country’s ability to pay its debts.
Image credits: Bernard Testa