Public sector posts P32.3-billion surplus in 2008

MANILA, Philippines – The country posted a consolidated public sector surplus of P32.3 billion in 2008 or 0.4 percent of gross domestic product (GDP), marking the third consecutive yearly surplus for the public sector, the Department of Finance (DOF) reported during the weekend.

The P32.3 billion surplus is P6.142 billion higher than the P26.158 billion surplus posted in 2007, data from the DOF showed.

The Finance department attributed the significant increase in the public sector surplus to healthier finances of government-owned and controlled corporations (GOCCs), other state-owned agencies and local government units even in the wake of the global financial turmoil.

“The substantial increase in the public sector was partially due to improved position of the GOCCs, social security institutions Bangko Sentral ng Pilipinas (BSP) and the local government units,” the DOF said.

The combined public sector surplus of social security institutions such as the Government Service Insurance System, Social Security System and the Philippine Health Insurance Corp. (PHIC) amounted to P66.699 billion last year as combined revenues reached P199.457 billion while expenditures hit P132.759 billion. This is an improvement from the P34.201 billion surplus posted in 2007.

The BSP, meanwhile, posted a surplus of P13.059 billion in 2008, a marked turnaround from the P89.220 billion deficit it posted a year ago. This was largely due to lower costs of monetary management, the Finance department said.

The local government units, for their part, posted a combined surplus of P34.383 billion last year, also an improvement from the P24.657 billion surplus recorded in 2007. The Finance department said this was due to higher internal revenue allotments from the National Government as a result of higher collections from internal revenue taxes.

Similarly, government financial institutions posted a combined surplus of P7.496 billion in 2008. However, this was lower than the P7.899 billion surplus recorded in 2007.

On the other hand, the 14-monitored GOCCs posted a lower-than-program deficit of P27.7 billion last year due to lower capital expenditures during the period, the Finance department said.

The country’s consolidated public sector fiscal position is the combined budget deficits or surpluses of the National Government and state-owned firms. These include government-owned and controlled corporations (GOCCs), local government units and government financial institutions.

It is closely monitored by local and foreign debt watchers as it is an indication of a country’s credit risk.

The government earlier projected the country’s consolidated public sector position to hit a deficit of P74.3 billion in 2009, a marked turnaround from its previous projection of a P25.4 billion surplus.

However, Finance authorities are still reassessing the figures following a revised budget deficit projection for the year of P250 billion from the previous programs of P199 billion, P177 billion and P102 billion.

The government has been trying to impose prudent spending and financial discipline on state-owned agencies to improve the  country’s fiscal position.

In 2007, the government had a public sector surplus of P26.158 billion, sustaining the surplus in 2006 of P5.33 billion. The 2006 surplus was the first since the 1997 Asian financial crisis, swinging from a deficit of P103.54 billion in 2005.

Prior to the 1997 crisis, the public sector recorded a surplus of P7.5 billion in 1996. –Iris C. Gonzales, Philippine Star