Finance Secretary Carlos G. Dominguez delivers a speech at the Philippine Economic Briefing on Tuesday. — PHILIPPINE STAR/ GEREMY PINTOLO
THE BUDGET deficit is expected to start narrowing this year, with borrowings likely to decline and revenues seen to rise as the economy rebounds from the coronavirus pandemic, Finance Secretary Carlos G. Dominguez III said at the Philippine Economic Briefing on Tuesday.
For 2022, Mr. Dominguez said the budget deficit is expected to hit P1.65 trillion, slightly lower than 2021’s actual deficit of P1.67 trillion.
“Last year, our revenue collection was already 5% higher than in 2020, signaling a return to robust economic activity. This year, we expect to bring back our revenue collections to pre-pandemic levels,” he said.
Domestic and external borrowings are also expected to drop to P1.65 trillion and P560 billion respectively, from local and foreign borrowings of P1.98 trillion and P568 billion respectively in 2021.
Mr. Dominguez said the Philippine economy is now recovering “strongly,” but has to deal with volatility arising from the Russia-Ukraine war.
“As the pandemic subsides, the Philippine economy is now well on its way to rapid recovery,” Mr. Dominguez said, citing the decline in coronavirus disease 2019 (COVID-19) cases and reopening of the economy.
Economic managers expect the economy to grow by 7-9%, after gross domestic product (GDP) expanded by 5.6% in 2021.
Mr. Dominguez said economic managers are keeping a close eye on the impact of the Russia-Ukraine war on the economy, particularly on fuel prices.
“Our optimism is, of course, tempered by the uncertainties introduced by the Ukraine conflict. We face a situation that will almost certainly raise inflation levels in all countries. This will be due primarily to the spike in oil and commodity prices,” he said.
The Finance chief emphasized there is no shortage of commodities, despite the spike in prices.
“There is no shortage of commodities, there is no shortage of fuel, of corn, of wheat. It’s actually the anticipation of shortages that are driving up prices,” Mr. Dominguez said.
“It’s affecting us negatively, but we’re confident that since our agricultural production in the Philippines, particularly for our staple food especially for rice, is constant.” — Tobias Jared Tomas