The country’s public sector posted a surplus in the first three quarters of last year as the strong performance of social security institutions and local government units wiped out the weak financial position of the government and state-run enterprises.
 
The finance department reported on Wednesday that the government’s consolidated public sector financial position booked a surplus of P23.4 billion from January to September last year or much better than the projected deficit of P4.4 billion for the period.
 
The surplus, however, was less than half the P58.64 billion surplus registered in January to September of 2007.
 
Statistics released by the finance department showed that the government’s budget deficit widened to P53.37 billion in the first nine months of 2008 from P40 billion in the same period in 2007 due to lower tax take and higher spending.
 
Meanwhile, the 14 monitored government-owned and controlled corporations incurred a deficit of P12.5 billion which was a complete turn around of the P39.86 billion surplus after they were allowed to spend more to pump prime the slackening economy.
 
However, local government units posted surpluses amounting to P35.2 billion in or P8.3 billion higher than the projected surplus of P26.9 billion while social security institutions led by the Government Service Insurance System, Social Security System, and Philippine Health Insurance Corp. registered a surplus of P39.5 billion or P7 billion more than the programmed P32.5 billion.
 
Government financial institutions led by the Development Bank of the Philippines, Land Bank of the Philippines, and others posted a P6 billion surplus of slightly lower than the programmed P6.2 billion.
 
Meanwhile, the Bangko Sentral ng Pilipinas registered a higher surplus of P4 billion or P3 billion more than the programmed surplus of P1 billion as it incurred lower foreign exchange losses.
 
The finance department sees the country’s public sector incurring a deficit of P25.6 billion in 2008 instead of projected surplus of P24.8 billion.
 
The government abandoned its commitment to balance the budget in 2008 and postpone fiscal consolidation back to the original 2010 schedule. Instead of a balanced budget, the government expects the government to book a budget shortfall of P75 billion or one percent of gross domestic product from P12.4 billion or 0.2 percent of GDP in 2007.
 
The deficit of the public sector has steadily been increasing since 1997 and peaked at P235.95 billion in 2004 before improving to P103.54 billion in 2005. The Philippines posted back-to-back surpluses of P10.98 billion in 2006 and P36.4 billion in 2007.