The government plan to balance the budget this year may not be realized as new revenue target of P1.217 trillion will not be enough to meet target expenses of P1.236 trillion.

The government however, may still be able to balance the budget after 10 years of being in the red if it will be able to cut expenses.

Reducing expenses however may mean that growth may fall below target.

There is still another way for the government to balance the budget and that is by selling more state assets.

The government sold P100 billion worth of assets last year enabling it to close the budget gap to P12.4 billion.

This year, however, proceeds from privatization at best is seen at only P30 billion .

Development Budget and Coordination Committee documents showed that revenues may reach only P1.217 trillion, P19 billion short of target as import growth is expected to slacken aggravated by the strengthening peso against the US dollar.

A strong peso means less tax base for imports.

The DBCC, the inter-agency committee that sets economic targets, will meet this week to finalize the revenue targets and find alternative sources of revenues.

The Bureau of Internal Revenue, which contributes two-thirds of total government revenues, is seen raising only P833.4 billion, P11.5 billion lower than the P844.9 billion target.

The Bureau of Customs, meanwhile, is expected to chalk in only P246.7 billion some P7.7 billion less than the target of P254.4 billion.

The DBCC said the emerging BIR revenue turnout assumes a slower growth in collection. BIR revenues grew 13 percent last year, and that growth is unlikely to be sustained this year, the DBCC said.

Meanwhile, BOC revenues are affected by the peso’s rise against the dollar, which cuts the value of imports and subsequently the duties due them.

The BOC target assumed an average peso-dollar rate of P46. However, the DBCC is now looking at a stronger rate of P42 per US dollar, after the local unit came off a record 19-percent appreciation last year.

Both the BIR and the BOC failed to meet their goals last year as inflation and interest rates came off less than expected, as well as due to the peso’s sharp appreciation.

The BIR collected just P713.6 billion and the BOC, P209.4 billion, which were below the P765.9 billion and P228.2 billion targets, respectively.

Under the DBCC latest assumptions, the economy is seen growing by 6.3 percent this year, the average treasury-bill rate at 3.5 percent and import growth at nine percent.

That compares to earlier expectations of 6.1 percent for the economy, four percent for t-bill 11 percent for imports.