MANILA, Philippines - Despite increased public spending, the government reported a P33.909 billion budget deficit in the first quarter, well below its programmed deficit of P82.808 billion. This was attributed to higher-than-expected revenues and slower state expenditures.
Department of Finance (DOF) data showed the government posted a budget deficit of P28.621 billion in March, higher than the P26.197 billion deficit a year ago.
Total revenues reached P115.43 billion in March, up 7.7% from last year. Manila said it spent P144.1 billion in March, 15% higher than a year ago.
Collections at the main tax agency Bureau of Internal Revenue were P75.2 billion in March, 5% higher than its year-ago revenue, but below a target of P82.3 billion for the month.
Finance Secretary Cesar V. Purisima said the first quarter figures affirmed the government's strategy of consolidating its fiscal position, while also investing in key social and economic services.
He emphasized the need to pass 2 vital revenue bills, one that will reform the excise tax system and another that will rationalize incentives given to investors. He said two bills are still priorities for the Aquino administration.
"These developments only strengthen our resolve to continue with our initiatives not only to attain investment grade rating and lower our borrowing costs, but also to boost investments in social and economic services to improve productivity and economic growth," Purisima said.
The Philippines, criticized for weak spending that pulled down overall economic growth in 2011, committed to frontload spending of its P1.8 trillion budget early this year to help meet its 5 to 6% growth target in 2012.
Last year's budget deficit was P197.8 billion, or 2% of GDP, smaller than the government's full-year shortfall target of P300 billion, or 3% of GDP.
Manila wants to keep the deficit at 2.6% of gross domestic product in 2012, trimming it to 2% by 2013 and keeping it at that level until 2016 when President Benigno Aquino's term ends. - With Reuters