Philippine fiscal deficit projected at P1.780 trillion in 2021

The Philippines is projected to post a fiscal deficit of P1.780 trillion this year as the growth of disbursements will be bigger than that of revenues, an official said Monday.

During the Sulong Pilipinas Forum, Budget Secretary Wendel Avisado said the deficit is expected at 8.9% of the gross domestic product (GDP), higher than 7.6% of the GDP in 2020.

Revenues are expected to grow 0.9% to P2.881 trillion, equivalent to 14.4% of the GDP. Meanwhile, disbursements are seen to grow by 10.3% to P4.662 trillion or 23.3% of the GDP.

Avisado said this year's disbursements cover efforts on health, socioeconomic recovery measures, as well as infrastructure projects.

"The programmed disbursements for fiscal year 2021 also account for the extension of the validity of fiscal year 2020 general appropriations act until December 31, 2021, and the appropriations under Bayanihan 2 until June 30 of this year," he said.

President Rodrigo Duterte in January signed laws that extended the Bayanihan to Recover As One Act and the 2020 national budget, given the COVID-19 pandemic.

"For next year, the deficit will be gradually lowered to 7.3% of GDP as the government continues to implement a fiscal consolidation strategy to rebuild its fiscal space and lessen the burden from borrowings and debt," said Avisado.

Revenues for 2022 are expected to grow by 15.0% to P3.316 trillion or 14.8% of the GDP, while the disbursements are projected to grow by 6.3% to P4.954 trillion or 22.1% of the GDP.

"Our objectives still remain the same. We will sustain our fiscal consolidation strategy," said Avisado. —KBK, GMA News