Budget deficit widens in June

Manila, Philippines – The government incurred a budget deficit of P11.696 billion in June, wider than the P7.691 billion recorded a year ago, Finance Secretary Cesar Purisima reported yesterday.

The June budget gap brought the first half deficit to P34.482 billion, still way below the programmed ceiling of P109.341 billion for the period as the government has yet to meet its revenue and spending programs even as economic managers noted significant improvement in both areas.

But Purisima said the latest fiscal position gives the government enough fiscal space to stimulate the economy if necessary.

“I am extremely pleased with our position. If we need to accelerate expenditures, we can. It shows that the Philippine government has fiscal space. The first half deficit is below by close to P75 billion compared to the first half program. This gives the government ample space to pump prime if necessary,” Purisima said during a briefing.

He also said the government’s latest fiscal position boosts the country’s chance of finally earning an investment grade rating from global debt watchers.

“This makes us one step closer to investment grade,” Purisima told reporters.

Revenues in the first half of the year increased by 11.6 percent to P760.921 billion from P681.640 billion a year ago. This is P15.026 billion lower than the P775.947 billion during the period.

Similarly, January to June expenditures increased by 13.8 percent to P795.403 billion from the P698.871 billion a year ago. However, this was still below the program for the period of P885.288 billion.

In June alone, revenues increased to P115.276 billion, 15.1 percent higher than the P100.139 billion generated a year ago while expenditures reached P126.972 billion, 17.8 percent higher than the P107.830 billion disbursed in June last year.

The two main revenue-generating agencies, the Bureau of Internal Revenue (BIR) and the Bureau of Customs, both reported a growth in collections during the first half of the year and for the month of June.

For the January to June period, the BIR collected P521.159 billion, higher by 13.8 percent from the P457.996 billion but below the programmed collections for the period of P535.357 billion.

The BOC raised P143.425 billion, 11.6 percent higher than the P128.557 billion generated a year ago but also below the target revenues for the period of P167.175 billion.

In June alone, the BIR collected P81.343 billion, a 21.6 percent improvement over the P66.904 billion generated in the same period last year.

Similarly, the BOC generated P23.299 billion, 7.6 percent higher than the P21.663 billion collected a year ago.

Despite the lower-than-programmed spending, Budget Secretary Florencio Abad said disbursements have been improving significantly.

He said that in the second quarter, disbursements reached P400.5 billion or a 14.6 percent growth year-on-year. This is slightly better than the disbursements in the first quarter, which reached P349.9 billion, Abad said.

“With government disbursements in the second quarter growing a bit faster than in the first quarter, we are confident that national government spending will again make a significant contribution to economic growth,” Abad said, noting that public spending was among the drivers of the 6.4 percent GDP growth recorded in the first quarter of the year. –Iris C. Gonzales (The Philippine Star)