Preliminary figures indicated that the deficit for May alone stood at between P6 billion and P6.5 billion, way below the average monthly target of P12 billion.
Sources from the Development Budget Coordinating Committee (DBCC) said that based on these estimates, revenues for the first five months of the year amounted to P255.3 billion, about 14.1 percent above the P242.121 billion target and significantly over the P223 billion actual collection during the same period in 2002.
On the other hand, expenditures were also slightly below the cap for May although sources warned that there might be an uptick in the June expenditures due to interest payments that normally build up towards the end of every quarter.
From Jan to April, the deficit amounted to P65.46 billion while the Jan to May deficit was roughly estimated to be between P71.46 billion to P71.96 billion.
The improvement in the May revenue collection was due mostly to the performance of the Bureau of Customs which surpassed its target of P8.615 billion and collected P188 million more to reach a total monthly collection of P8.803 billion.
The Bureau of Internal Revenue, on the other hand, was only P540 million short of its target of P36.35 billion. The BIR said that based on preliminary data, its collection reached P35.81 billion, about 15 percent over its 2002 collection over the same period.
The Department of Budget and Management said it has not finalized the expenditure numbers for the five-month period but according to DBM Secretary Emilia Boncodin, the initial numbers are very encouraging.
"If that is true (that the deficit is only P6 billion), then that is very good," Boncodin said. "But I’d wait for the actual figures before saying anything more."
Despite its strong revenue collections, the Arroyo administration’s fiscal position is still in a delicate balance as it juggled its expenditures to put its deficit back on track.
It succeeded in April when the deficit dropped by almost 70 percent from P21.756 billion last year to only P6.584 billion, due mostly to the record performance of the BIR and the front-loading of two major expenditure items that were booked in March instead of April.
Sources said that although the DBM was adamantly refusing to reveal its monthly targets, the trend of public spending was intended to go down from the first quarter to the final months of 2003.
Based on the quarterly disbursement target of the DBCC, expenditures were programmed to hit P187.1 billion in the first quarter before rising to P387.8 billion for the first half; P580.4 billion for the first three quarters; and to P786.1 billion for the full year.
On the other hand, the national deficit was programmed to reach P55.2 billion in the first quarter; P102.2 billion for the first two quarters; P149.5 billion for the first three; and P202 billion for the whole year.
With the deficit for April at P6.5 billion and for May at P6 to P6.5 billion, the Arroyo administration could afford a deficit of about P34 to P34.5 billion for June alone, based on its quarterly deficit target of P47 billion.
However, sources said the government was still concerned about the surge in constructive cash items which accounted for a total of P5.6 billion of total expenses for April alone. If not for these items, government spending would have amounted to only about P700 million.
Constructive cash items are non-cash items that were reflected in the expenditure report as cash. These are funds from foreign donors who purchase materials and equipment directly from their own suppliers so that the funding assistance is delivered directly to the project proponents in kind instead of cash.
During the first quarter when the Arroyo administration missed its first quarter target, the bulk of the unplanned expenditures came from the uncontrolled increase in constructive cash.
The DBM was able to contain its constructive cash expenditures but it still accounted for the bulk.
For the whole year, the DOF projects that the deficit would reach P202 billion, but the worst case scenario pegged the deficit as P230 billion.