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THE
monetary authorities have crafted policy anchored on the
assumption the budgetary shortfall this year should not
be larger than P63 billion, according to Bangko Sentral
ng Pilipinas Governor Amando M. Tetangco Jr., indirectly
underscoring the tight situation of a fiscal sector
struggling to overcome a semester of unmet revenue
targets.
In a
briefing late Friday, Tetangco told reporters the fiscal
sector headed by Finance Secretary Margarito Teves
appears committed to keep the deficit within program and
to make up for its multibillion-peso revenue shortfall
by getting it from the sale of assets.
“The
national government has pledged to plug its revenue
shortfall with proceeds from privatization. The fiscal
scenario we’re looking at is the same scenario the
Department of Finance is looking [at], or a deficit of
only P63 billion,” Tetangco said.
The P63
billion had come into focus recently, with some quarters
doubting if it could still be met, given that the
first-half deficit figure is seen to be off by at least
P6 billion to P7 billion. Teves, however, said the
P63-billion target stays, especially after his public
feud with then-Internal Revenue Commissioner Jose Mario
Buñag, who was relieved last month.
While
looking outwardly like a statement of support,
Tetangco’s comment puts a lot of pressure on Teves and
the main collection arms to perform.
Some
experts have already anticipated a deficit blowout
that’s as large as P100 billion, and some argue that
asset-sale proceeds are one-off affairs unlikely to be
sustained in the future.
For
Finance Undersecretary Gil Beltran, however, asset-sale
proceeds are not as bad as some have portrayed them to
be, pointing to Singapore and Hong Kong, whose
governments regularly book privatization proceeds like
recurring income.
Proceeds
from the sale of public housing units, among others,
regularly contribute to Hong Kong and Singapore revenue
streams, according to Beltran.
Some
P100 billion is expected from privatization this year,
mostly from the sale of government equity in such
companies as power distributor Meralco, food and
beverage conglomerate San Miguel Corp. and the
geothermal energy arm of the Philippine National Oil
Co.-Energy Development Corp., among others.
Tetangco
said while threats to inflation remain, their biggest
concern still centers on peso liquidity growth that at
one point expanded by more than 26 percent.
“Peso
liquidity growth is still a risk but is now seen to
further decelerate in June or July,” he told reporters.
Also
called M3, peso liquidity growth ranged above 20 percent
since November last year and was last surveyed at 21.1
percent in May. “M3 growth in June or July may not
necessarily be below 20 percent,” Tetangco said.
As M3
slows, Tetangco expects bank lending to pick up speed
going forward.
Bank
lending had been anemic since 1997 but posted
double-digit growth again last March when this averaged
10.5 percent, and still higher in April, 12.1 percent.
Tetangco
said bank lending growth will continue to improve even
though banks are no longer the only source of funding
for many borrowers.
He said
new financial products have entered the credit markets,
allowing businesses and individuals also to raise money
even from nonbank sources. |
