Budget deficit soars in January-February

MANILA, Philippines - The country’s budget deficit soared 491.5 percent to P31.28 billion in the first two months of the year from P5.29 billion in the same period last year as government spending outpaced revenue collections, the Bureau of Treasury reported yesterday.

Spending climbed 12.4 percent to P281.966 billion, outpacing the growth in revenues, which rose by just two percent to P250.72 billion.

Collections at the main tax agency, the Bureau of Internal Revenue reached P169.24 billion, up 10 percent from the same period in 2012.

The Bureau of Customs, on the other hand, contributed P47.01 billion to total revenues, representing an increase of six percent from the year earlier figure.

The Bureau of Treasury, meanwhile, contributed P16.31 billion while other agencies generated P18.156 billion in revenues.

In February alone, the government posted a budget deficit of P11.75 billion as overall revenues fell six percent to P112.35 billion while spending surged by 14 percent to P124.1 billion.

Budget Secretary Florencio B. Abad said spending continued to rise at a fast pace to spur continued economic growth.

Cumulative disbursements for January to February amounted to P282 billion, up P31.2 billion or 12.4 percent from the year ago. This is the highest growth recorded since 2007, the Department of Budget and Management said.

Infrastructure and capital outlay expenditure surged by 40.8 percent to P32.3 billion while disbursements for maintenance and other operating expenditures jumped 40.5 percent to P47 billion.

In February, disbursements reached P124.1 billion, 14.3 percent higher than the year earlier level.

 â€œWe expect to see further improvements in budget implementation, given the expenditure reforms we’ve advanced over the last two years. As we continue to fine-tune the budget process and make it even more efficient, we urge departments and agencies to optimize their allocations and ensure that these translate to the quick delivery of high-impact services to the public,” Abad said.

The government has earmarked more than P400 billion for infrastructure projects and capital outlays under this year’s P2.01-trillion budget.

Abad noted that the country’s recent investment grade rating from Fitch would help buoy the Aquino administration’s expenditure strategy, particularly for investments in infrastructure, agri-fishery industries, business process outsourcing, and other strong-performing sectors.

 The Philippines had set a budget deficit goal of P241 billion or two percent of the country’s gross domestic product.  It wants to contain its budget deficit to this level from 2013 to 2016 when President Aquino’s term ends.