‘FY07 budget may be $185M-$195M’

Next fiscal year’s working budget may be drastically reduced—between $185 million and $196 million—based on government actual collections this year, said House Speaker Oscar M. Babauta yesterday.

“I can sense that the revenues that we used to enjoy, we won’t be enjoying now. The budget will be much lower than prior years. We are looking at between $185 million to $196 million. That’s my estimate because collection is not meeting the expenditure,” said Babauta.

The speaker, in an interview yesterday afternoon, said he has not received the Fitial administration’s budget submission yet.

The new administration is required by law to submit its proposed budget for the next fiscal year on May 1.

But Babauta said that, based on his consultation with Department of Finance Secretary Eloy Inos, the budget level would have to be drastically reduced if the government is to survive the financial crisis.

“That would include wage cuts. If it’s not done, there’s probably payless paydays. Cuts are inevitable to be able to pay vendors and meet operational costs,” he said.

Earlier, the administration expressed confidence that it could collect up to $198.5 million, which mirrors the adjusted revenue estimate for the current fiscal year, which ends on Sept. 30.

Upon assuming his office in January this year, Gov. Benigno R. Fitial revised the annual appropriation, lowering it from $213 million to $198.5 million, citing a lack of resources.

‘$51M deficit’

Babauta said that, based on his recent talk with Inos, the government faces a budget deficit of $51 million by end of September this year if cost reduction schemes are not implemented on time.

Fitial said during his State of the Commonwealth Address on April 21 that the projected deficit was currently at $37.5 million.

To avert that situation, he said that his administration targets to limit government spending to $14.61 million a month.

He said that cost-cutting measures implemented by his administration had already reduced monthly expenditures from a high of nearly $21 million at the end of 2005, to $18 million in February, and $16.8 million in March.

He said the government had only $117 million in revenues available for the period between February and September 2006.