MANILA, Philippines – The Department of Economy, Planning and Development (DEPDev) is wary that a supplemental budget to support programs during the ongoing oil crisis may worsen the Philippines’ fiscal situation.

DEPDev Secretary Arsenio Balisacan told the Senate PROTECT (Proactive Response and Oversight for Timely and Effective Crisis Strategy) committee on Monday, April 13, that the department is mulling a supplemental budget request to meet the funding needs for aid programs tied to the Middle East crisis. But this may cause the country’s fiscal deficit to increase.

“When COVID hit us, we [had a] very good fiscal picture. The deficit was low, the debt was low, but this time we don’t have that luxury,” he explained.

Bureau of the Treasury data shows that the country’s budget deficit stands at P171.2 billion as of the end of February. Meanwhile, national debt climbed to P18.16 trillion in February as the government borrowed additional money amid what the National Treasury described as “evolving global financial conditions.”

Balisacan also noted that the soaring pump prices could cause inflation to accelerate beyond the government’s 2% to 4% target this year. The Philippine Statistics Authority on Tuesday, April 17, reported that inflation soared past government targets to 4.1% in March due to ballooning diesel and gasoline prices.

Apart from the supplemental budget, Baliscan also proposed other measures such as revisiting the oil deregulation law, easing the import ban on biofuels, and temporarily lifting the coal moratorium.

“My preference is that we work around the 2026 (General Appropriations Act). We need to cut back on capital outlays if necessary just to fund what’s most needed for the crisis,” the DEPDev chief said.

Balisacan said the Department of Budget and Management identified P238 billion in relevant appropriations to support emergency measures for the Middle East crisis. As of April 1, around P125.2 billion has already been released.

These available funds will only be enough to cover around three and a half months.

Of the funding released so far, around P20 billion went to the energy department’s emergency oil procurement. – Rappler.com