By Lawrence Agcaoili

The Finance Department sees the country?s public sector incurring a deficit this year instead of a surplus due to a wider budget shortfall.

The Finance Department said the government?s consolidated public sector fiscal position would register a deficit of P74.32 billion, or 0.9 percent of the gross domestic product this year, a reversal of an earlier projected surplus of P25.4 billion.

The revised estimates were primarily caused by the wider budget deficit forecast in light of the expected slowdown in the GDP growth to a range of 3.7 percent to 4.7 percent this year instead of the original target of 6.1 percent to 7.1 percent.

The government expects to book a budget shortfall of P102 billion this year, instead of P60 billion, under the proposed 2009 national budget.

The deficits of the 14 monitored non-financial government corporations are expected to hit P13 billion while those of social security institutions, local government units and government financial companies are seen to continue to perform strongly this year.

Social security institutions, led by Government Service Insurance System, Social Security System and Philippine Health Insurance Corp., are expected to post a combined surplus of P50.1 billion. Local government units are likely to post a ruplus of P42.6 billion this year.

State-run financial institutions led by Development Bank of the Philippines and Land Bank of the Philippines will post a combined surplus of P6.65 billion while that of the central bank is expected at P1 billion this year.