Finance Secretary Alberto Romulo said preliminary data showed the government spent a total of P97 billion in the first two months of the year but collected only P81 billion in revenues.
The budget shortfall for February reached P10 billion from P6.386 billion in January but Romulo did not release exact figures since the data are still expected to be finalized next week.
"Expenditures for the first two months were slightly lower compared to last year because revenue-enhancement (measures) did not meet targets, resulting in a higher-than-expected deficit," Romulo told finance reporters over the weekend.
Romulo attributed the "higher-than-expected" budget deficit mainly to weak revenue collections from the Bureau Internal Revenue (BIR) and the Bureau of Customs (BOC) but no exact figures were available.
Other finance officials lamented that the slow pick-up in the stock market may also affect the government’s budget position since the sale of state assets has been postponed due to depressed prices.
The government expects to plug a part of the budget deficit through the sale of government holdings in listed firms such as the Manila Electric Co. and Philippine National Construction Corp., among other companies.
Losses incurred by government-owned and controlled corporations (GOCCs) are also expected to adversely affect the national budget since fiscal managers are expecting a drop in dividend remittances.
No less than President Arroyo has lamented that government financial institutions (GFIs) sustained losses because they were forced to finance the "lavish lifestyle" and "building binge" of the previous administration.
The President said that although the deficit last year was already expected to double the P62.5-billion target it committed with the International Monetary Fund (IMF), the Estrada administration continued to chalk up debts with its suppliers.
Romulo had earlier revealed that the accounts-payable of the Estrada administration may amount to as much as P70 billion which would have to be settled by the Arroyo administration this year.
The President also lamented that the funds of GFIs were also used to invest in companies linked with Estrada cronies as attested by the former heads of the country’s two state pension fund agencies.
She was referring to the testimonies of former Social Security System chairman Carlos Arellano and Government Service Insurance System president Federico Pascual who admitted Estrada earned as much as P189 million in kickbacks through the use of the pension funds.
Mrs. Arroyo said Estrada also instigated similar misuse of public funds of the Land Bank of the Philippines, Development Bank of the Philippines, and Philippine National Bank.
Nonetheless, the Arroyo administration has said it is bent on keeping a lid on the budget deficit although it is expected to balloon to P145 billion to P225 billion this year.
The government has prepared a menu of measures to trim the deficit, including an increase in collections from large taxpayers, pursuit of long-pending tax cases as well as cost-cutting measures.
As an example, the President in a multisectoral consultation in Laguna said that instead of bidding out contracts to construct senior citizens centers alone, she would construct multi-purpose halls for youth and women as well as senior citizens.
Mrs. Arroyo also said she would withhold the release of the maintenance, operating and other expenses budget of certain government offices.
"That is how we will save our limited funds," she said. "Let us not be ostentatious like the previous administration. If we will be ostentatious and conduct a building binge, our economy will fall further."