Gov’t trims 2011 deficit to P197.75 B

MANILA, Philippines – The National Government incurred a budget deficit of P197.754 billion in 2011, below last year’s ceiling of P300 billion and narrower than the P314.4 billion reported in 2010, National Treasurer Roberto Tan said in a press briefing yesterday.

But in December, the budget gap hit P101.500 billion, wider than the P44.638 billion recorded in the same period a year earlier as disbursements picked up in the last quarter of the year, Budget and Management Secretary Florencio Abad also pointed out yesterday.

Total revenue collections for 2011 reached P1.359 trillion, short by P51.4 billion against the program of P1.411 trillion as the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) both missed their respective collection targets.

The BIR, which accounts for 70 percent of government revenues, collected P924.146 billion in December, which was below the program of P940 billion for the period.

However, compared to collections in the same period last year of P822.623 billion, the BIR’s 2011 collections were higher by 12.34 percent.

The BOC, for its part, collected P265.108 billion last year, also below the full year program of P320 billion or a shortfall of P54.892 billion. In 2010, the BOC collected P259.241 billion.

The Bureau of the Treasury (BTr) collected P75.236 billion last year, below the P54.315 billion in 2010.

Expenditures, on the other hand, reached P1.557 trillion last year, below the program of P1.711 trillion or a shortfall of P153.608 billion. In 2010, expenditures totaled P1.522 trillion or a growth of 2.32 percent.

Of the P1.557 trillion, the government spent P278.996 billion for interest payments and P1.278 trillion for the rest of the expenses during the year.

In December alone, the government collected P110.170 billion in revenues and disbursed P211.670 billion.

During the month, the BIR collected P74.631 billion, above the P69.298 billion tax-take in December 2010. The BOC, on the other hand, collected P22.148 billion, 13.96 percent below the December 2010 collections of P25.741 billion.

Collections by the BTr amounted to P75.236 billion in December last year, above the P54.315 billion generated in the same period in 2010.

Finance Secretary Cesar Purisima said revenue gains were achieved mainly through tax administration efficiency.

“This is a concrete proof that our efforts to plug the loopholes in our tax system and fight tax evasion and smuggling are bearing fruit,” he said.

The finance chief said that the government still needs to generate more revenues as the economy continues to grow.

He reiterated the need to index excise taxes to inflation and to rationalize fiscal incentives in order to collect more resources for the government.

“We are pushing for the enactment of these vital bills in Congress as we believe on their positive contribution to the economy,” Purisima said.

Abad, for his part, said disbursements improved significantly last year.

“In December alone, disbursements have reached an all-time high of P211.7 billion, increasing year-on-year by a whopping 43.2 percent. It was an unprecedented feat, as it contributed a significant 13.6 percent to total disbursements for the year; whereas normally, monthly spending contributes eight to 10 percent to the annual aggregate,” Abad said.

He said the improvement would continue throughout the year as the Aquino administration pumps up spending to boost economic growth.

Last year, the Philippine economy, as measured by gross domestic product (GDP), grew 3.7 percent, slower than the 7.6 percent recorded in 2010 due to weak government spending.

This year, the government has a growth target of 5-6 percent and a deficit ceiling of P286 billion or 2.6 percent of GDP. –Iris C. Gonzales (The Philippine Star)