Gov't deficit far from targets due to slow spending
MANILA, Philippines - The government has a long way to go to meet its budget deficit targets as it has yet to accelerate spending for crucial projects, especially infrastructure.
On Monday, May 21, the government announced it booked a "record-high" budget surplus of P31.024 billion in April, resulting in a deficit of P2.89 billion in the first 4 months.
The deficit was only 2.6% of its P109.341-billion target for the first half, and 1% of the full-year target of P290 billion.
Revenue collection during the 4-month period reached P514.242 billion, 11.4% higher than the P461.413 billion recorded a year ago. Expenditures, on the other hand, rose 12.1% to P517.127 billion from P461.352 billion last year.
"We are pleased to report that government disbursements continue to grow and to reverse contraction," said Budget Secretary Florencio Abad. "Nonetheless, we acknowledge that government spending, especially on priority programs and projects of the administration, needs to grow at a much faster pace in order to support our development targets."
Finance Secretary Cesar Purisima, meanwhile, attributed the low deficit to efforts of the administration to plug the loopholes in the tax system by running after tax evaders and smugglers.
He said collections made by the country's two main tax agencies continued to grow.
The Bureau of Internal Revenue, which accounted for 70% of government revenue, collected P345.065 billion in the first 4 months, up 14% from P302.942 billion last year.
Collections of the Bureau of Customs expanded 11.6% to P94.896 billion from P94.319 billion last year.
"This proves that there remains to be space for tax collections to grow considerably through process re-engineering and efficient tax administration marked by a sustained campaign against smuggling and tax evasion," Purisima said.
He noted that the Aquino administration will continue to pursue measures to raise much-needed revenues for vital social services and infrastructure.
"The excise tax reform has been approved at the committee level of the Lower House and the Finance department remains optimistic it shall be passed into law this year given President Aquino’s support to the measure which he identified as urgent."
The government's P280 billion deficit ceiling this year is equivalent to 2.6% of gross domestic product (GDP). The deficit stood at P197.8 billion or 2% of GDP in 2011.
The government had vowed to boost spending this year after failing to meet its expenditure goal in 2011 -- which was partly blamed for the drastic slowdown in GDP growth to 3.7% from 7.6% in the previous year. - Rappler.com