House: Wider fiscal deficit requires fresh look at budget

THE leadership of the House of Representatives on Monday said it needs to reexamine the P3.757-trillion national budget for 2019 due to the widening fiscal deficit.

Majority Leader Rolando Andaya Jr. said the government disbursements continue to outpace the increase in revenues.

“Both government spending and revenues are growing beyond their respective targets. As a result, the government may fail to meet its deficit ceiling for the year,” he said in a statement.

“The numbers for 2018, as far as the country’s fiscal deficit is concerned, do not look so good,” Andaya added.

According to Andaya, even Budget Secretary Benjamin E. Diokno admitted that the government’s fiscal deficit for 2018 may fall behind the P523.7-billion target, which is equivalent to 3 percent of the gross domestic product.

Last year, he added, the fiscal deficit was only 2.2 percent of the gross domestic product.

“Given this development, it is time we realize 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,” the lawmaker added.

The proposed 2019 General Appropriations Act is still pending before the Senate.

“We are walking on a tightrope and we need a really good balancing act. The DBCC [Development Budget Coordination Committee] insists on a smaller contractionary spending program, yet the government needs to spend more just to catch up with inflation,” he added.

Room for social programs MeAnWhile, Andaya said Joint Resolution 3 extending the 2018 budget until the end of year 2019 will give the government more spending room for social programs.“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 to about P200 billion,” he added.

According to Andaya, extending the life of the 2018 budget for next year means foregoing the DBM proposal of

having only one expenditure program for 2019.

“luckily, the President is a much better economist than his economic managers. he signed Joint Resolution 3, against the advice of his economic managers who recommended its veto. it also throws away the ambitious cash budgeting system of Secretary Diokno,” he added.

“in public expenditures, we need to prioritize reforms such as targeted social spending and infrastructure investments that raise living standards. This is our urgent task in the 2019 budget,” he said.