National Government expects budget surplus in December 2008

The National Government could hit a budget surplus for the month of December 2008 due largely to higher-than-expected revenues from the sale of its stake in Petron Corp. and royalty taxes from the Malampaya. project.

“Most likely it could be a surplus,” Finance Undersecretary Gil Beltran said of last month’s possible fiscal position.

The consortium behind the Malampaya natural gas project remitted to the Bureau of the Treasury (BTr) roughly P13 billion in royalty payments for 2008, higher than the usual P9 to P10 billion yearly royalty dues.

Officials said the revenues from the Malampaya consortium were unexpected and had not been included in the programmed revenues.

Aside from higher-than-expected revenues from the Malampaya project, proceeds from the sale of the government’s 40-percent stake in Petron also came in last month.

The government has sold the 40- percent stake of the Philippine National Oil Co. (PNOC) in Petron to the Ashmore Group for P25.7 billion.

PNOC remitted net proceeds of P21 billion to the Bureau of the Treasury last Dec. 23, minus the financial and investment costs.

The government sold its stake in Petron, considered a crown jewel in the oil industry, to raise revenues for social services and infrastructure projects.

The government’s sale of its stake in Petron ends an era of state control in the oil refining business which started in the early 70s.

After Petron, the government hopes to sell this year other big ticket items such as the 120-hectare Food Terminals Inc. property in Taguig and its remaining 40-percent stake in PNOC-Exploration Corp.

Aside from higher revenues, the government also was unable to meet its expenditure program for the month of December, Beltran noted.

However, Beltran said government spending significantly improved in December because of the improvement in the absorptive capacity of state agencies.

“There’s a lot of improvement but it’s still below the program,” Beltran said.

The National Government incurred a budget deficit of P4.3 billion in November, a marked turnaround from the P54.1-billion surplus recorded in the same period in 2007.

The November budget gap brought the January to November deficit figures to P66.7 billion, reversing the P12.6- billion surplus recorded in the same period in 2007.

With higher-than-expected revenues for the month of December, Finance officials expect the 2008 budget deficit to fall below the P75-billion program for last year.