The Department of Budget and Management (DBM) has transmitted the proposed P4.50 trillion spending plan for 2021 to the legislature for approval.
The proposed budget was 9.9 percent higher than this year’s P4.10 trillion and equates to 21.8 percent of the country’s gross domestic product (GDP).
Personnel services took the bulk of the 2021 budget or 29.2 percent of the National Expenditure Program as government plans hiring additional health workers at the Department of Health.
Capital outlays received the second largest chunk of the budget with P920.5 billion or 20.4 percent of the 2021 NEP.
“The increase in capital outlays from this year’s budget is owed mainly to the increase in infrastructure programs of the Department of Public Works and Highways (DPWH) and Department of Transportation (DoTr),” budget planners said.
By agency, the Department of Education along with state universities and colleges received the highest allocation of P754.4 billion followed by the DPWH with P667.3 billion and the Department of the Interior and Local Government with P246.1 billion.
For next year, the DBM projected revenues reaching P2.71 trillion equal to 13.2 percent of GDP and assumed a higher income of P3.03 trillion for 2022.
In terms of disbursement, the agency projected spending P4.46 trillion and P4.67 trillion for 2021 and 2022, respectively.
The plan results to a budget deficit as wide as 8.5 and 7.2 percent in 2021 and 2022.
Meanwhile, the Bayanihan 2 awaiting President Duterte’s signature should help the economy gain back strength, acting Socioeconomic Planning Secretary Karl Kendrick Chua said.
“We are optimistic the Bayanihan 2 will help the country bounce back from the crisis with its improved provisions on the healthcare system, public transport and restoring consumer demand,” Chua said.
According to him, the bill will help facilitate faster economic recovery.
ING Bank senior economist Nicholas Mapa said its approval could help prevent an entire year lost to zero GDP expansion.