In its presentation before Fitch Ratings Service last week, the DOF said that at P83 billion, the 2006 deficit would be 43.7 percent lower than the 2005 deficit of P146.8 billion.
The DOF said total income for 2006 is projected to reach a total of P970.4 billion, 18.9 percent more than the 2005 revenues but 3.7-percent short of the P974.1-billion target for the year.
The shortfall came mainly from tax revenues which increased by 21.2 percent compared to 2005 but fell 24.5-percent short of the P879.8-billion target for 2006.
The DOF reported that the collection of the Bureau of Internal Revenue (BIR) was particularly problematic in 2006, with total revenue collection short by 26.9 percent of the P675.4-billion target.
Compared with the 2005 collection, however, the DOF said BIR’s collections were 19.5 percent more than the actual collection of P542.7 billion.
The DOF explained that the BIR’s collection suffered from the decline in interest rates which shrunk the interest income tax that the bureau normally collects from financial transactions.
The DOF report showed that BIR’s collections was P15.3 billion less than it should have been from the decline in interest rates alone.
The Bureau of Customs, on the other hand, remained ahead of its collection target despite the appreciation of the peso which brought down the value of imports.
The DOF reported that the BOC’s total collection for 2006 was projected to reach P198.1 billion, 2.1 percent over the programmed collection and about 28.2 percent higher than the 2005 total.
In 2007, the Arroyo administration has made the commitment to further cut its budget deficit to P63 billion, equivalent to about 0.9 percent of the gross domestic product (GDP).
For this year, the 2007 deficit is expected to be 24.1 percent less than the 2006 deficit, resulting from total expenditures of P1.181 trillion in the 2007 budget and revenues of P1.118 trillion.
The government is expecting windfall revenues from the sale of its big-ticket assets, particularly government’s shares in Philippine Long Distance and Telephone Co. (PLDT).