DBM proposes P3.35-trillion ‘transition budget’
Budget Secretary Florencio Abad is proposing a budget of P3.350 trillion for next year or for the next administration.
“This transition budget aims to bridge the goals and policies of the Aquino government with those of the next administration,” he said in a memorandum to heads of state agencies.
“With the institutionalization of reforms, this budget will hopefully guide
the new administration in the allocation and management of public funds based on the principles of fiscal discipline, operational efficiencies, transparency and empowerment,” he said.
Abad’s budget proposal for President Aquino’s successor is P348 billion more than this year’s P3.002-trillion outlay.
It is based on gross national product growth of 6.5-7.5 percent, gross domestic product ( GDP) expansion of 6.8- 7.8 percent, inflation of two to four percent, treasury bill rates of 2.5-four percent, peso-dollar exchange rate of 45-48 and crude oil price of $50-$65 per barrel.
It also assumes revenues amounting to P3.040 trillion, up from this year’s projected collections of P2.697 trillion. The budget gap would be financed through borrowings, mostly from the domestic market.
“The Aquino administration will entrust a healthier fiscal position to the incoming administration as a result of the various public financial management reforms implemented during its six-year term,” Abad said.
“To maintain this sound and sustainable fiscal environment in the coming years, the government will target a rising revenue effort reaching 18.8 percent of GDP by 2019 and a deficit level of two percent of GDP over the medium term, pending the fiscal strategy of the next administration,” he said.
Abad said Aquino’s successor would also inherit a healthy national economy.
“The strong macroeconomic fundamentals, in particular the low and stable inflation environment, favorable interest rates, sustained OFW remittances, vibrant business process outsourcing and increasing tourism receipts, continue to drive the economy,” he added.