THE proposed 2021 budget was increased to more than P4.5 trillion with the economic team assuming a prolonged pandemic, a Finance Department official said.

Finance Undersecretary and the department’s Chief Economist Gil S. Beltran said that the economic team’s latest estimates showed the pandemic will last longer and its impact worse than initially expected.

“We thought that the pandemic will last only until August to September,” Mr. Beltran said in a text message on Monday.

He said the latest estimates assume the availability of a COVID-19 vaccine by the end of the year.

The prolonged lockdown prompted the Development Budget Coordination Committee to increase the proposed budget to P4.506 trillion on July 16 to fund more recovery programs.

The additions were “mainly recovery programs which were not thought of in May,” he said.

President Rodrigo R. Duterte ordered the National Capital Region, Bulacan, Rizal, Laguna and Cavite to return to a modified enhanced community quarantine for two weeks starting Tuesday.

The decision followed an appeal by healthcare workers for “breathing space” after a recent spike in coronavirus cases.

Mr. Duterte approved the proposed budget on July 30. The Budget department hopes to submit the 2021 National Expenditure Program to Congress this month, in time to meet the 30-day deadline counting from the date the State of the Nation Address was delivered.

“The theme is consistent with the Administration’s goal of saving lives and protecting communities while making different sectors of the economy stronger and more agile. Every peso of the proposed P4.506-trillion budget went through numerous budget hearings and consultations with the agencies, and levels of scrutiny and approval,” the Budget department said in a statement over the weekend.

It said the spending plan will “sustain” government initiatives for COVID-19 pandemic response by giving priority on improving the health care system, ensuring food security, allotting more investments on infrastructure, and extending aid to communities for their recovery.

The budget accounts for 21.8% of gross domestic product (GDP) and is 9.9% higher than this year’s P4.1-trillion spending plan.

In a meeting on May 27, the budget ceiling was set at P4.335 trillion, on the view that the economy will contract 2-3.4% this year and bounce back to 8-9% growth next year.

The previous macroeconomic assumptions caped the budget deficit at 8.4% of GDP this year, 6.6% next year and 5% in 2022.

The debt stock as a proportion of the economy is projected to rise to 49.8% this year from 39.6% last year. This is expected to rise further to 51.5% in 2021 and 52.3% in 2022. — Beatrice M. Laforga