MANILA, Philippines - The Philippines said yesterday its budget deficit in November was P22 billion, bringing the shortfall in the first 11 months of the year to just 32 percent of the full year target.
The government had promised to spend P72 billion on fast-moving projects in the last three months of the year after tight spending was blamed for slower-than-expected overall growth in the nine months to September.
The annual budget deficit this year is likely to come in much lower than the target of P300 billion, or three percent of GDP.
Data from the Department of Finance (DOF) showed the deficit from January to November amounted to P96.25 billion, 64 percent lower than the deficit of P267.328 billion recorded last year.
The 11-month deficit was also 32 percent lower than the P300-billion programmed deficit for 2011.
“Our November fiscal position has shown our ability to sustain increased expenditures with improved revenue collections... This only shows that we can keep up with our fiscal consolidation processes despite spending more to shield our economy from the present global uncertainties,” Finance Secretary Cesar V. Purisima said.
Trinh Nguyen, economist from HSBC Hong Kong, said it is already expected that the deficit will be significantly below target.
“As mentioned before, the pace of spending is significantly slow as fiscal consolidation measures to increase efficiency have slowed down the pace meaningfully. This is expected for the rest of the year,” Nguyen told Reuters.
“We expect the pace to pick up next year, as the government would try to do what it can to boost domestic demand. They will try to push through projects as well as largely delayed PPPs (public-private partnership projects).”
Radhika Rao, economist from Forecast Pte in Singapore, said the November figures gives credence to the Philippine government’s assurances that disbursements have been stepped up towards the end of the year.
“With over 40 percent of the P72 billion stimulus package also making its way to the needed sectors, markets are expected to draw confidence that the administration is getting its act together to cushion downside risks to growth as we head into a rocky 2012,” Rao said.
The government’s revenue collections stood at P128.745 billion in November. This brought the 11-month collection to P1.25 trillion, a 13.13 percent increase from the previous year. This is already 89 percent of the P1.41 trillion target for 2011.
For the 11-month period, the Bureau of Internal Revenue reported a 13 percent growth in collections to P849.515 billion, while the Bureau of Customs’ collections jumped four percent to P242.960 billion.
The BIR needs to collect only P90.485 billion in December to be able to meet its full year goal of P940 billion. This is a challenge that BIR Commissioner Kim S. Jacinto-Henares said is possible to attain.
On the other hand, actual expenditures reached P150.74 billion in November. From January to November, expenditures amounted to P1.35 billion, 2% lower than comparable figures in 2010.
Excluding interest payments in the expenditures, the government posted a primary surplus of P155.3 billion for the January-November period, versus P5.15 billion during the same period in 2010.