Monday, February 26, 2007

Fiscal deficit is down for fourth straight year!

Our economic managers have reason to rejoice with the national government’s fiscal deficit falling to P62.2 billion in 2006, way below the P125 billion original target and the P80 billion revised official estimate. As a ratio to GDP, the fiscal shortfall dipped to 1.0% from 2.7% in 2005. Many factors were attributed to the realization of this positive performance, among them, the fact that we operated on a re-enacted budget in 2006 which substantially curb government spending due to a lower expenditure program. This is the fourth straight year that the national government has managed to reduce the deficit.

To complete the fiscal performance: national government revenues reached P978.7 billion in 2006, up 19.9% from P816.2 billion in 2005 and 4.6% higher than the P974.1 billion target. Revenues raised by the Bureau of Customs, Bureau of the Treasury, and other offices rose above targets to P198.2 billion, P73.9 billion, and 54.8 billion, respectively, from P154.6 billion, P70.6 billion, and P48.3 billion, also respectively. However, the Bureau of Internal Revenue, which collects two-thirds of all revenues, raised only P651.9 billion, 23.4% short of its P675.4 billion target, but higher over a year ago by P109.2 billion. The BOC easily met its target because of increased fuel imports. On the other hand, the BIR fell short of its goal due to lower tax collection on interest income arising from lower interest rates and the lower volume of government securities offered.

On the other hand, public spending rose to P1.04 trillion, below the P1.1 trillion ceiling, but above last year’s P962.9 billion. Local government units received P174.7 billion from the national government, when its programmed ceiling was only P134.1 billion. Interest payments on government debt amounted to P310.1 billion only, below the P340.0 billion program, due to lower domestic interest rates and a strong peso-dollar rate.

With this favorable fiscal situation, there is enough optimism that that the target deficit can be held down to P63.0 billion in 2007, and en route to a balanced budget by 2008.

Wednesday, February 14, 2007

Happy Valentine's Day from Fiscaladspace!

This is irrelevant to the subject matter that's been filling this Blog. But since everyone's heart and mind are filled with celebrating this special occasion, I might as well join the fray.

Most of us simply see Valentine's Day as a chance to show our loved one's how much we care with a bunch of flowers, an expensive gift, a heart shaped chocolate or a special message of love. I started mine this morning with a card and a couple of hand picked chocolate for my wife. But the day itself has a lot more sinister origin.

Valentine's Day originated from St. Valentine, a Roman who was martyred for refusing to give up Christianity. He died February 14, 269 A.D., the same day that being devoted to "love lotteries". Legend also says that St. Valentine left a farewell note for the jailer's daughter, who had become his friend, and signed it "From your Valentine".

Just to add more spice, has posted this Valentine's trivia:

- Teachers will receive the most Valentine's Day cards, followed by children, mothers, wives, and then, sweethearts.
- More than 50% of cards are sold the week of the holiday, with the largest and most elaborate Valentine cards sold 48 hours before February 14.
- 70% of those celebrating the holiday give a card, followed by a telephone call (49%), gift (48%), special dinner (37%), candy (33%) restaurant meal (30%), and flowers (19%).

Interesting huh, here's some Valentine's superstitions: To be awoken by a kiss on Valentine's Day is considered lucky. Seeing different animals on Valentine's Day can result in different ways; seeing a goldfinch, you will marry a millionaire; seeing a robin you will marry a crime fighter; seeing a dove, you will have a happy peaceful marriage. (Maybe it's a good day to go to the zoo!)


The waiting is over: DBM to pay deficiency in GSIS premiums.

The bureaucratic volleyball between the DBM and GSIS on how to resolve the issue of unremitted government share in premium of national government employees from July 1997 to December 1998 may be over.

To recall, the national government owed the GSIS a sizeable amount corresponding to the deficiency in the government share on the premiums contributions of national government employees from July 1997 to December 1998. Such deficiency was due to the increase in contributions from 9.5% to 12% as mandated in the GSIS Act. After a series of reconciliation, the deficiency was finally established and negotiations between the two agencies went on for quite sometime.

The first option to settle the obligation was for the Bureau of the Treasury to issue a fixed rate treasury bond redeemable over a period of six years. Despite the MOA executed between the GSIS, DOF and DBM during Isidro Camacho's stint with the DOF, the agreed settlement never pushed through. The second option was the "debt-to-equity" swap in which national government-owned land be turned over to the GSIS as payment of the "utang". But this never materialize as well. The third and more practical option was for GSIS to request for an appropriation cover equivalent to the reconciled unpaid premiums.

Finally, in October last year, Congress passed a supplemental appropriations (RA 9358) setting aside among others, the amount of Php 3,299,791,000 to cover payment of said deficiencies. Last month this year, the DBM and the GSIS issued Joint Memorandum Circular No. 2007-1 implementing the said supplemental appropriation.

The joint circular prescribes that the DBM shall release to GSIS the appropriated amount and post in its website the amount to be paid broken down by agency or office.

Here are the other salient provisions of the joint circular:

- the amount paid the GSIS shall cover only the principal; the interest due thereon shall be resolved separately by the DBM and GSIS;
- NGA personnel who already availed of retirement benefits from the time GSIS began deducting increase premiums shalll be entitled to corresponding benefits;
- deductions made by GSIS and applied as payment of premium deficiency shall be refunded to the employees.

Tuesday, February 06, 2007

Ensuring transparency in the 2007 Budget

The scheduled signing by the President of the 2007 General Appropriations Act has not been set yet, hopefully before the end of February. I bet it's going to be on February 14th, and expectedly in a more solemn ceremony. The Chief Executive has not done this for the past two years since we have been operating on a re-enacted budget.

Sans the approval yet, certain innovations on the 2007 GAA are being publicized - among them the insertion of a special provision that mandates full disclosure of the use of public funds by each and every government agency, allowing the public careful scrutiny of government funds, including the way pork barrel funds are spent. Senator Franklin Drilon, Chair of the Senate Finance committee who is credited for this innovation said that with this provision, "any citizen can now insist on their constitutional right to know".

I will dwell on the salient features of the 2007 GAA once it is enacted into law.

And the Winners are . . .

The Regional Awards Committee (RAC) composed of the DILG (Chair), Philippine Councilors League (PCL), DBM, DA, and DSWD has just completed its validation of the regional nominees to the Local Legislative Awards for Region VI.

The winners in each of the four (4) categories are: Bacolod City for highly urbanized cities; San Carlos City in Negros Occidental for component cities; San Jose de Buenavista in Antique for the 1st-3rd class municipalities; and Mina, Iloilo for the 4th- 6th class municipalities. The said LGUs will be officially honored and given cash awards during the PCL Assembly this February. The regional winners will be Region VI nominees to the national awards in March. This early, the RAC is very optimistic that San Carlos City with its IT-enabled legislative processes and tracking will make it as among the national winners.

The Legislative Awards is in its maiden search and an initiative of the DILG and the PCL to give due recognition to the best practices promoted by the Sanggunians of provinces, cities and municipalities.