ABS-CBN News Online Beta

RP 10-month budget gap exceeds 2009 goal

---

abs-cbnNEWS.com | 11/18/2009 2:34 PM

Printer-friendly version | Send to friend | Share your views

• 
• 
• 
• 
• 
• 
• 

MANILA - The Philippines exceeded its 2009 budget deficit goal in just 10 months, with weak revenues and higher spending on reconstruction following strong typhoons that damaged crops and infrastructure on the main Luzon island.

Finance Secretary Margarito Teves said on Wednesday the budget deficit from January to October now stood at P266.1 billion, more than 4 times the P62.3 billion deficit in the same period last year and above the government's 2009 ceiling of P250 billion or 3.2% of gross domestic product (GDP).

For the third quarter alone, the government incurred a shortfall of P28.5 billion, over 3 times what was recorded in the same quarter last year.

Revenues raised by the government in the first 10 months fell 4.8% to P925.4 billion while its expenditures jumped 15.1% to P1.19 trillion.

Lower BIR, BOC collections

The country's main revenue agencies failed to shore up their collections for the 10-month period.

The Bureau of Internal Revenue, which accounts for three-fourths of the government's total revenues, took in P612 billion in taxes, down 5.1% from last year's P644.8 billion.

Similarly, the Bureau of Customs recorded a 15.7% drop in collections to P183.9 billion from P218.2 billion.

The government's dwindling tax effort has been blamed on several factors including inefficient tax administration, widespread tax evasion and corruption. Worsening this was the global economic crisis, which slowed down businesses and triggered massive job lay-offs, and several "revenue-eroding" measures passed by Congress.

P300-billion deficit

Teves said the 2009 budget deficit would most likely come in at P280 billion ($5.99 billion). "That is the likely scenario," he told reporters Wednesday.

Teves said the scenario included the government's sale of sequestered shares of San Miguel Corp. within the year. Without the sale, the deficit was likely to hover around P300 billion, he said.

Some economists forecast in a Reuters poll last September that the budget deficit could climb to as much as P350 billion, higher than the government's P300-billion worst-case scenario.

To help finance the 2009 shortfall, the government sold P114.4 billion worth of domestic retail Treasury bonds in September, an offer not part of its original borrowing plan this year.

The Philippines, one of Asia's sovereign debt issuers, is looking at a Samurai bond sale early next year as part of a $2 billion foreign debt plan to fund its 2010 budget gap, which is seen to narrow to P233.4 billion, or 2.8% of GDP. With a report from Reuters