The government’s fiscal gap program was adjusted upward this year by the country’s economic team as they anticipate higher state spending on pandemic response.

Following the 179th Development Budget Coordination Committee (DBCC) meeting, Budget Secretary Wendel Avisado said on Tuesday night that the DBCC raised this year’s deficit ceiling to 9.4 percent of the country’s gross domestic product (GDP).

The new ceiling for the deficit-to-GDP ratio is wider than the DBCC’s previous expectation of 8.9 percent and the actual 7.6 percent last year.

The revised revenue and disbursement program, according to Avisado, resulted in the adjusted ceiling.

The revenue program for 2021 was maintained at P2.88 trillion.

Due to funding requirement for Bayanihan 2, which includes the procurement of coronairus disease 2019 vaccines among other items, estimated disbursements for this year have been raised from P4.66 trillion to P4.74 trillion.

Bayanihan 2 — the Republic Act 11465 or the Bayanihan to Recover as One Act —  includes initiatives such as cash-for-work programs, skills training, social assistance programs, support for the agriculture, tourism, transportation, and education sectors, and more lending programs to help businesses thrive. It expired last December 19.

The deficit-to-GDP ratio is expected to be 7.7 percent in 2022, with revenues estimated to hit P3.29 trillion against a P4.95 trillion disbursement program. Expenditures are projected to accelerate to P5.11 trillion in 2023 and P5.40 trillion in 2024.

Avisado clarified that the projected disbursements for 2022 to 2024 already take into account the proposed Growth Equity Fund (GEF), which will be developed in accordance with the Mandanas-Garcia case Supreme Court ruling.

“The GEF aims to assist poorer local government units in addressing the problems of marginalization, unequal development, and high poverty incidence,” he added.

He also assured that the DBCC will continue to pursue a fiscal consolidation strategy to gradually reduce the deficit to pre-pandemic levels, with a forecast 6.4 percent of GDP rate in 2023 and 5.4 percent of GDP rate in 2024.