Public sector deficit seen falling to P83B

The Department of Finance expects the consolidated public sector deficit (CPSD) this year to drop to P83.5 billion from P163.3 billion last year.

Finance Secretary Cesar Purisima said the decline in the deficit would be brought about by improvements in the collection of national and local taxes and of the financial performance of state-run entities.

Purisima said the estimated CPSD this year was equivalent to 0.7 percent of the projected gross domestic product of the country, down from 1.5 percent last year.

“The fiscal health of the country has continued to improve, thus increasing the fiscal space. The better fiscal picture allows the government to increase its investments in social services and infrastructure,” Purisima said the other day during the deliberations by Congress on the proposed 2014 national budget.

The government’s budget deficit, Purisima said, was seen to settle at P238 billion this year, lower than the P242.8 billion last year.

He said the expected decline in the government’s budget gap would be brought about by the rising tax collection by the Bureau of Internal Revenue.

Local government units and certain state-owned firms are expected to register budget surpluses this year, partially offsetting the deficit of the government and trimming the CPSD.

Purisima said the improving fiscal situation of the government and the entire public sector was the key reason behind the recent upgrades in the country’s credit ratings.