By LEE C. CHIPONGIAN

Budget Secretary Rolando Andaya Jr. is confident the government can contain the budget deficit to 3.2 percent of gross domestic product (GDP) this year but readjusted next year’s fiscal program higher to 2.8 percent of GDP from previous estimate of only two percent.

“We’re still comfortable that P250 billion is our (budget gap) ceiling for 2009. We can keep that,” Andaya, also chair of the inter-agency Development Budget Coordinating Committee (DBCC) said.

“For 2010, we’re looking at a deficit equivalent to 2.5 percent to 2.8 percent of GDP,” he added.

Andaya noted that the same issues are there, such as spending constraints which would in part, contain the budget gap this year. “The pace of spending would be part of why we think we will not exceed the program but there will be improvements in how we spend,” he added.

As per the latest DBCC meeting, the deficit program for the year is still P250 billion. The Department of Finance has programmed a budget deficit of P62.45 billion for the third quarter and P32.4 billion for the last quarter of the year. In the first half of the year, the budget gap amounted to P153.4 billion, which was a little lower than program of P155.1 billion.

In June, which was the last time DBCC tweaked fiscal numbers, it approved a 2010 deficit program of P166.7 billion or two percent of GDP on improved economic and revenue environment. DBCC, which tracks and programs macro-economic targets and assumptions in a three-year path, forecasts GDP will grow by 2.6 percent next year from 0.8-1.8 percent this year.

Last year the budget deficit amounted to P68.1 billion or less than one percent of GDP, while in 2007 the shortfall was lower at P12.4 billion which gave budget and finance officials hope at the time that the 2008 balanced budget goal will be met.

The International Monetary Fund said government’s decision to readjust budget deficit ceiling higher to 3.2 percent of GDP is an appropriate move and a “neutral fiscal stance” and that it would “unlikely unsettle investors in view of the global recession.”