Budget deficit soars to P153.4 billion

MANILA, Philippines – The country incurred a budget deficit of P153.4 billion during the first six months of this year, a sharp 752.2 percent increase from the P18 billion deficit recorded in the same period last year on the back of declining tax collections and accelerated spending amidst the slowing economy.

Despite the increase in the deficit for the six-month period, Finance Secretary Margarito Teves said the budget gap was still P1.7-billion below the P155.1-billion deficit target for the period.

The government posted the deficit as revenue agencies failed to meet their collection targets which officials attributed to the impact of the worldwide economic crisis.

Total revenues from January to June amounted to P545.7 billion or P35.7 billion lower than the P581.4 billion target while expenditures amounted to P699.1 billion, also P37.4 billion lower than the target for the period.

Of the total revenues, the Bureau of Internal Revenue (BIR) collected P375.6 billion during the period, P12.8 billion lower than the programmed amount due mainly to a slower than projected economic growth.

The Bureau of Customs, for its part, generated P104.8 billion or lower than the target by P20.1 billion, mostly because of the significant 35 percent drop in imports.

Other offices collected P35.2 billion in revenues, also lower than the target by P3.8 billion. Only the Bureau of the Treasury surpassed its target with an income of P30.1 billion, higher than program by P1 billion, Teves said.

With the P153.4-billion deficit for the first half of the year, Teves said the 2009 deficit ceiling remains achievable.

“We are hopeful that we will remain on track with our deficit program of P250 billion or 3.2 percent of gross domestic product (GDP) this year,” Teves said.

The 2009 deficit ceiling has been revised from a previous program of P199.2 billion.

For the month of June, the government incurred a budget deficit of P30.2 billion, reversing the P800 million surplus posted during the same month last year.

Total revenues for the month amounted to P89.6 billion, slightly up by 2.3 percent compared to June last year while expenditures reached P119.8 billion, an increase of 38 percent from a year ago level.

Of the total revenues, the BIR collected P60.4 billion, up by 11.7 percent from last year while BOC collections reached P20.3 billion or down by 18.5 percent compared to last year.

The income of the BTr, meanwhile, was also down by 46.8 percent to P2.2 billion while other offices posted an increase in income of almost 50 percent to P6.6 billion in June.

Teves said both the BIR and the BOC are vigorously pursuing their action plans to improve revenue collection. “These administrative measures by our revenue agencies are expected to raise additional collection of as much as P30 billion this year,” he said. –Iris C. Gonzales, Philippine Star