RP posts P28.67-billion consolidated public surplus

MANILA, Philippines – The country posted a consolidated public sector surplus of P28.67 billion in 2008 or 0.4 percent of gross domestic product, (GDP), marking the third consecutive yearly surplus for the public sector, latest data from the Department of Finance (DOF) showed.

The P28.6 billion surplus is P7.326 billion higher than the P21.347 billion surplus posted in 2007, data from the DOF also showed.

The DOF 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 combined public sector surplus of social security institutions such as the Government Service Insurance System (GSIS), Social Security System (SSS) and the Philippine Health Insurance Corp. (PHIC) hit P66.69 billion, higher than the P34.203 billion surplus posted in 2007.

The Bangko Sentral ng Pilipinas (BSP), meanwhile, posted a surplus of P9.427 billion in 2008, a marked turnaround from the P89.220 billion deficit it posted in 2007. 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 P21.803 billion surplus recorded in 2007. The DOF said this was due to higher internal revenue allotments from the 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, higher than the P5.940 billion surplus recorded in 2007.

On the other hand, the 14-monitored GOCCs posted a deficit of P27.7 billion last year.

The country’s consolidated public sector fiscal position is the combined budget deficits or surpluses of the government and state-owned firms. These include GOCCs, local government units (LGUs) 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 Philippines is expected to incur a consolidated public sector deficit of P232.953 billion this year on the back of the government’s swelling budget deficit.

This means that the consolidated public sector position would be back in the red this year after posting three consecutive yearly surpluses from 2006 to 2008.

The latest public sector deficit projection took into account a revised budget deficit for 2009 of P250 billion from the original projection of P40 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 P21.347 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 (The Philippine Star)