Shortfall balloons to P67B in 2 months

03/31/2009

The budget deficit in the first two months surged to P67 billion, which is already a third of the deficit goal for the entire year, as a result of another front-loading scheme that was meant to stimulate the economy early in the year.

The two-month deficit was also more than double the deficit in the same period last year, Finance Secretary Margarito Teves admitted.

The increase from a deficit of P32.9 billion posted in the first two months last year was due to higher government spending and lower revenues amid the global economic slowdown, Teves said.

He noted that the government had planned to increase spending in the first part of the year to stimulate the economy in the face of the world financial crisis.

Teves said the government was still expecting a budget deficit of P110.1 billion for the first quarter and P177 billion for the whole year.

“All government agencies will have to work harder to meet our revenue targets,” he told a media briefing.

Teves also said the government was expecting to earn about P21 billion from the privatization of state assets.

Earlier this month, Socio-Economic Planning Secretary Ralph Recto warned that the budget shortfall could soar to P257 billion if the economic situation worsened.

The government has already cut its forecast for economic growth in 2009 to between 3.7 and 4.4 percent, down from earlier forecasts of 3.7 to 4.7 percent.

The budget deficit for 2008 amounted to P68.1 billion, lower than the government’s target of P75 billion.

Reflecting concerns about a possible increase in government borrowing, the yield on the four-year bonds rose 5 basis points to 6.075 percent following the budget deficit announcement, traders said.

Revenues for the two-month period reached P159.4 billion, about 5.5 percent lower than year-ago’s P168.8 billion.

Bulk of the collection came from the Bureau of Internal Revenue (BIR) at P102.6 billion but this is lower by 4.6 percent from the end-February 2008’s P107.6 billion.

The Bureau of Customs (BoC) collections in January to February this year was at P28.3 billion or about 7 percent lower than the P30.4 billion during same period last year.

On the other hand, revenue of the Bureau of the Treasury (BTr) rose by 28.2 percent or P16.8 billion from P13.1 billion last year while that of the other offices went down by 33.7 percent to P11.7 billion.

Expenditures at end-February 2009 totaled to P226.5 billion, 12.3 percent higher than year-ago’s P201.7 billion, BTr data showed.

For last February alone, the deficit reached P29 billion or higher than year-ago’s P10 billion while expenditures totaled to P110 billion, up by 9.1 percent year-on-year.

Total collections last February amounted to P81 billion, which is a percent lower than the P81.8 billion collected during the same period last year.

Of the total, the BIR collected P47.4 billion, which is 6.8 percent lower against last year’s P50.9 billion while BoC brought in P13.9 billion or 11.5 percent decline from year-ago’s P15.7 billion.

BTr registered 38.2 percent growth in collections last February after its revenue reached P11.7 billion while the other offices’ collection grew by 18.4 percent to P8 billion from year-ago’s P6.7 billion.

Teves vowed to continue allocating a higher budget for government programs “to support continued economic growth and provide assistance to the very poor amid these challenging times.”

“We will work harder to meet our revenue targets to ensure that the government has the resources to provide for the needs of its people during these uncertain times,” he said.

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