This was how the Palace on Saturday defended itself from criticism hurled against the outgoing administration of Mrs. Gloria Macapagal-Arroyo that it is leaving the country a budget deficit of P340 billion, the largest so far in our history. Deputy Presidential Spokesperson Gary Olivar said that with the deficit also comes the highest gross domestic product (GDP) ever posted, which he attributed to the government’s efforts to “pump-prime" the economy.
GDP is a standard indicator of a country's overall economic output, measured as the total market value of all final goods and services made within the country in a year.
“Dapat nating tandaan na ang GDP sa ilalim ni Pangulong Arroyo ay pinakamataas din sa ating kasaysayan," Olivar said Saturday in a live interview by Mariz Umali on GMA News’ Balitanghali.
(Let us remember that the GDP under President Arroyo is also the highest in our history.)
This page requires a higher version browser Olivar was reacting to statements made earlier by Sen. Francis Escudero, chairman of the Senate committee on banks, financial institutions and currencies, that Mrs. Arroyo is passing on to the incoming Aquino presidency the biggest fiscal shortfall ever.
Escudero also criticized Mrs. Arroyo for having spent close to P3 billion in foreign trips in the last nine years.
“The government had spent much for economic stimulus plans so our economy would remain resilient despite the global recession," Olivar said.
‘Manageable deficit’ This year, the budget deficit from January to May has already ballooned to P162.1 billion, partly due to higher disbursements following the destructive typhoons that hit the country late last year. This figure went beyond the P145.2-billion target deficit for the period.
For the entire year 2009, the government incurred a budget shortfall of P298.5 billion. This had bypassed the highest recorded deficit at P210.7 billion in 2002, a year after Mrs. Arroyo came to power.
On the other hand, the 2009 deficit represented only 3.9 percent of the GDP, as compared to the 2002 deficit, which was 5.3 percent of that year’s GDP.
“The deficit is anywhere between 2.5 to less than four percent of the GDP in this case—something that is manageable," Olivar said in Filipino.
Public debt nearly doubled
The government also incurred a bigger debt in order to cover the budget shortfall and to compensate for low revenue collection in 2009.
As of November 2009, government borrowings rose to P4.42 trillion.
This represents a 4.4 percent or P188.2 billion increase over a 12-month period, compared to the November 2008 figures.
The increased public debt also represents a whooping 56.8 percent of the P7.7-trillion GDP posted during the same 12-month period. This means that to create P100 worth of goods and services in the Philippines, the government has to manage a debt of P60.
Real Gdp at Factor Cost By Industry
Government borrowings when Arroyo came to power in 2001 was pegged at P2.38 trillion. It has since nearly doubled after nine years.
Olivar reiterated, however, that even if the government borrowed more and spent higher than its target, the country’s GDP proportionally grew.
In 2008, GDP growth was pegged at 3.8 percent, and rose to 4.7 percent in 2009. In the first quarter of this year, GDP grew by 7.3 percent. Monetary authorities are predicting an annual growth of 2.6 percent to 3.6 percent this year. Olivar said the country’s GDP might rise to as much as P8.5 trillion from last year’s P7.7 trillion — if the economy continues to grow.—JV
