DBM chief welcomes 3.35% decline in budget deficit

She, likewise, expressed confidence that the administration’s Medium-Term Fiscal Framework (MTFF) will help further trim down the budget deficit to GDP ratio at 3 percent by 2028. (File Photo: Department of Budget and Management/Facebook)

MANILA – Department of Budget and Management (DBM) Secretary Amenah Pangandaman on Tuesday welcomed data which showed that the government’s budget deficit narrowed by 3.35 percent year-on-year to PHP1.6 trillion in 2022.

A budget deficit refers to a situation in which government spending exceeds income.

This meant the national government’s budget deficit in 2022 narrowed to 7.33 percent of the country’s gross domestic product (GDP) from 8.60 percent in 2021 and below the 7.58 percent full-year program.

“The decline in our budget deficit augurs well with our fiscal performance targets. We laud our revenue agencies for this notable improvement as this is a better outturn compared to the year prior, considering the past two years of pandemic spending,” Pangandaman said in a news release.

She, likewise, expressed confidence that the administration’s Medium-Term Fiscal Framework (MTFF) will help further trim down the budget deficit to GDP ratio at 3 percent by 2028.

“Under our Medium-Term Fiscal Framework or the MTFF, we are targeting to further narrow the government’s budget deficit to GDP ratio at 3 percent by the end of President Marcos’ [Jr.] term in 2028,” she added.

Under the MTFF, the government is targeting faster economic growth at 6.5 to 7.5 percent of GDP in 2022 and 6.5 to 8.0 percent of GDP annually from 2023 to 2028.

It envisions the Philippines as an upper-middle income economy, with a poverty rate reduced to 9 percent by 2028.

Data released by the Bureau of the Treasury (BTr) last week showed that the government’s budget posted a PHP1.6 trillion deficit in January to December 2022, down three percent from PHP1.7 trillion in the previous year.

However, this amount is above the Development and Budget Coordination Committee’s (DBCC) outlook of PHP1.5 trillion.

The BTr attributed the fiscal outturn to revenue growth of 17.97 percent which outpaced the 10.35 percent expansion in government spending.

Data from the BTr showed the full-year revenue collection amounted to PHP3.5 trillion. This translated to a 17.97 percent or PHP540.0 billion improvement from the 2021 outcome.

Government spending for 2022, likewise, reached PHP5.2 trillion, up by 10.35 percent from PHP4.7 trillion a year ago.