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DBCC approves P5.024T budget ceiling for 2022, retains economic growth target

The interagency Development Budget Coordination Committee (DBCC) has given the thumbs up for the P5.024-trillion national budget for 2022.

Following a special meeting on Monday, the DBCC approved the expenditure ceiling of the fiscal year 2022 National Expenditure Program at P5.024 trillion, “consistent with the macroeconomic assumptions and foregoing fiscal targets.”

The national budget for the coming year is higher by 11.5% than the P4.5-trillion fiscal program for this year.

“The proposed 2022 national budget will continue to invest in building the country’s resilience amidst the pandemic by prioritizing funding for  COVID-19 response measures, such as healthcare development and social services, while also ramping up economic growth through investments in public infrastructure,” the DBCC said.

The interagency body comprises the departments of Budget and Management, Finance, and National Economic and Development Authority.

In January, the Budget department called on government departments and agencies to prepare for their budget proposals for the fiscal year 2022 as it targets to submit next year’s budget proposal on July 26, the day when Duterte will deliver his final State of the National Address (SONA).

Meanwhile, the DBCC retained its gross domestic product (GDP) target of 6% to 7% this year, 7% to 9% in 2022, and 6% to 7% in 2023 and 2024 “amid the declining number of COVID-19 cases in the country since the peak in April 2021 and the gradual reopening of the economy with more targeted granular lockdowns.”

“To support this outlook, the DBCC emphasized its support to manage risks and continue the gradual and safe reopening of the economy, subject to the strictest compliance to minimum public health standards,” it said.

“The intensified implementation of the prevent, detect, isolate, treat, and recover (PDITR) strategy, along with the full vaccination of residents in high-risk areas, will help build consumer and business confidence, and improve our health system capacity and prevent community transmissions of the Delta variant,” it added.

The relaxation of quarantine restrictions in high-risk areas must be complemented with an accelerated vaccination roll-out, in order to allow more businesses to operate and consumers to participate in socio-economic activities, the interagency body noted.

The DBCC also said that a total of P665.72 Billion had been released  to fund the government’s COVID-19 response and to mitigate the losses of low-income households, small businesses, and other vulnerable sectors.

With these actions, the interagency body is optimistic that the country’s GDP may return to its pre-pandemic levels as early as 2022.

The DBCC said it will review the GDP growth projections after the release of the second quarter GDP in August.

On the other hand,revenue projections for the medium-term were retained at P2.88 trillion for 2021 or 14.5% of GDP, P3.29 trillion for 2022 or 14.9% of GDP, P3.59 trillion for 2023 or 14.8% of GDP, and P4.0 trillion for 2024 or 15.1% of GDP.

The DBCC also kept the estimated disbursements for 2021 and 2022 at PhP4.74 trillion or 23.9% of GDP and P4.95 trillion or 22.4% of GDP), respectively.

Disbursements have been adjusted downwards to P5.02 trillion or 20.7% of GDP in 2023 and P5.30 trillion or 19.9% of GDP in 2024 due to the revised projections for the National Tax Allotment (NTA).

Meanwhile, the infrastructure program disbursement for 2022 is projected to increase to P1.29 trillion, equivalent to 5.8% of GDP, from P1.25 trillion original estimate.

“It will slightly taper off to P1.28 trillion (5.3% of GDP) in 2023 following the updated projections for the NTA and BARMM Block Grant, and will reach P1.35 trillion (5.1% of GDP) in 2024. The infrastructure program will average 5.4 percent of GDP over the next three years,” the DBCC said.

The deficit program for 2021 is retained at 9.3% of GDP.

“Over the medium-term, the deficit path will be on a downward trajectory with 7.5% in 2022, 5.9% in 2023, and 4.9 percent in 2024,” the DBCC said.

“This fiscal consolidation strategy will continuously be adopted by the government to ensure fiscal sustainability over the medium-term and to bring back the country’s deficit to pre-pandemic levels,” it said.—AOL, GMA News