2013 budget goal still viable, says Arroyo gov't

The Arroyo administration will present on Monday fiscal targets that the next government can choose to adopt in a bid to balance the budget by 2013. The mid-term revenue program is included in a report to business groups that likewise lists President Gloria Macapagal Arroyo's economic legacy, while admitting that the ranks of the poor had increased during her nine-year presidency. The revenue program, drafted by an interagency group last week, charts a gradual reduction in the budget deficit from last year's record high, estimated to have hit as much as P298 billion. The report, however, cited an emerging figure of P290.2 billion or 3.7 percent of the gross domestic product (GDP). "The figures are something that they (the next administration) can start with," Salceda said in a telephone interview on Sunday, adding that the outgoing administration does not traditionally present macroeconomic targets to its successor. Filipinos will troop to the polls on May 10 to choose a new set of leaders whose terms start in July. "All I am trying to show is that the budget can be balanced in 2013," Salceda said, although the revenue program contained in the report does not provide a scenario for that year. The government originally targeted a balanced budget by 2010. It advanced the goal by two years, only to abandon it as the global fiscal crisis worsened in 2008, and blew past the P250-billion cap for 2009 given lackluster revenues and the need to pump-prime the economy. The 2008 shortfall was just P68.1 billion, less than a percent of GDP. Official full-year fiscal results for 2009 are expected to be released later this month. The deficit cap for 2010 has been set at P293 billion. Succeeding annual goals set in the report are as follows: P180.5 billion or 2 percent of GDP in 2011 and P98.8 billion or 1 percent of GDP in 2012. The fiscal road map, which pegs tax revenue growth of as much as 14.6 percent of GDP to P1.44 trillion in 2012 from 12.4 percent or P967.4 billion in 2009, can be adopted by the next administration, presidential economic adviser and Albay Governor Jose Ma. Clemente S. Salceda said. From P830 billion this year, the Bureau of Internal Revenue (BIR) is expected to earn over P1 billion in 2012. The Bureau of Customs, meanwhile, must collect P385.2 billion in 2012 compared with this year's target of P275.7 billion. Expenditures, meanwhile, were put at P1.68 billion for 2012, up from this year's P1.57-billion program. Salceda said he would address representatives of business groups today as part of government efforts to convey to various sectors Mrs. Arroyo's legacy as President. Among those expected to join the briefing in Malacañang, he said, are officials of the Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation, Inc., and the American Chamber of Commerce in the Philippines. Salceda's presentation, sent to reporters ahead of the meeting, claimed the country's economic performance had been better than its regional peers, with the Philippines among the few that had posted growth despite the global economic downturn. The presentation likewise highlights that most economic indicators had improved significantly during the Arroyo presidency. For instance, it notes that the gross international reserves (GIR) hit a record high of $45.4 billion as of January; that average economic growth of 4.86 percent during 2001-2008 was higher than in previous administrations; and that the period's average inflation of 5.37 percent was also the lowest. Salceda claimed that as the economy had performed "better than expected," the business process outsourcing sector contributed about $6 billion from practically none before 2001, while tourist arrivals grew to almost four million compared with 2.15 million in 1998. Foreign investments, though lower compared with levels that other Asian economies received, remained resilient amid the crisis, he said. But Salceda admitted that despite the economic gains, the poverty incidence remains high. Official data showed that there were 27.6 billion poor Filipinos in 2006, up from 23.84 billion in 2003. He also cited a Social Weather Stations (SWS) survey that pegged self-rated poverty at 51 percent of the population as of September 2009. Latest SWS poll data showed self-rated poverty as improving slightly to 46 percent as of December 2009. "Of course we can't hide [the poverty situation in the country]. That is because of structural constraints [where economic gains do not reach the poor] and also population growth," Salceda said. — BusinessWorld