The public sector borrowing requirement (PSBR), or the combined budget shortfall of the National Government and the 14 monitored state-run corporations less the budgetary assistance extended to these firms, posted a deficit of P91.5 billion last year, almost double the P47.92 billion recorded in 2007.
The PSBR indicates the amount that the government should borrow to plug the budget shortfall of the National Government and state-run firms. It has been regarded as a key indicator of a government’s fiscal health.
The higher deficit was mainly due to the swelling fiscal gap of the National Government, which soared to P68.12 billion last year from P12.44 billion in 2007 on account of dipping revenues due to slower business activity.
The monitored government-owned and controlled corporations (GOCCs), meanwhile, incurred a combined deficit of P27.69 billion in 2008, a reversal from the P57.93-billion surplus achieved in 2007.
The 14 monitored GOCCs are the Philippine National Oil Co., Philippine Economic Zone Authority, Philippine Ports Authority, Metropolitan Waterworks and Sewerage System, Local Water Utilities Administration, Home Guaranty Corp., National Housing Authority, National Power Corp., National Electrification Administration, Light Rail Transit Authority, National Irrigation Administration, Philippine National Railways, National Food Authority and the National Development Co.
On the other hand, central bank restructuring accounts, another component of the PSBR, recorded a deficit of P9.56 billion last year from P8.18 billion in 2007. The National Government is paying off the debts left by the old central bank, which was reestablished as the BSP in 1993.
The combined deficits of the National Government, the GOCCs and the central bank restructuring accounts were offset partly by the net lending and equity to state-run firms, which totaled P13.75 billion last year from P10.62 billion in 2007.
Other public sector, which consists of the social security institutions, government financial institutions (GFIs), the BSP, and local government units (LGUs) posted a surplus of P120.17 billion last year, a turnaround from a deficit of P26.58 billion in 2007.
Social security institutions, which consist of the Social Security System, the Government Service Insurance System, and the Philippine Health Insurance Corp., posted a combined surplus of P66.7 billion in 2008, almost double the P34.20 billion surplus recorded in 2007.
GFIs, composed of the Development Bank of the Philippines, Trade and Investment Development Corp. of the Philippines, and the Land Bank of the Philippines, managed to achieve a surplus of P7.5 billion last year from P5.94 billion in 2007.
The BSP, on the other hand, posted a surplus of P9.43 billion, a reversal from the P89.22-billion budget shortfall it incurred in 2007.
LGUs also enjoyed a higher aggregate surplus at P34.38 billion in 2008 from P21.80 billion the previous year. This was traced to higher internal revenue allotments from the National Government as a result of higher tax collections.
Earlier, the Asian Development Bank noted the Philippines has failed to reduce the number of GOCCs that are draining much of state funds, noting that some of these are still suffering from weak institutional and regulatory frameworks. The Finance department said it would look into the performance of state-run firms, but said there may be no closures of nonperforming ones this year as this may lead to job losses amid an economic slump. — Alexis Douglas B. Romero
