MANILA, Philippines - The country's budget deficit in the first six months of the year stayed below program levels, with the government yet to fully catch up with its spending targets, Budget Secretary Florencio Abad said on Tuesday.
Abad said government spending picked up in June but not at the pace the government had wanted.
"The deficit was way below than programmed," Abad said when asked if the government met its P152 billion budget deficit ceiling in the first half of the year.
He did not give specific numbers. "All agencies have already accelerated the budget execution," he said, citing the public works and social welfare departments as taking the lead.
But Abad said the government was still behind its expenditure plan for the January to June period.
Manila's budget gap in the January to May period was just P9.54 billion, 94% lower than a deficit of P162.11 billion a year earlier, helped by higher revenues and underspending.
Officials had said government underspending was partly to blame for the slower pace of annual growth in the first quarter of 4.9% against 6.1% in the fourth quarter of 2010.
The government is targeting growth of 7% to 8% this year, after a revised 7.6% expansion in 2010. It wants to keep the budget deficit at P300 billion, or 3.25 of GDP this year, after a deficit of P314 billion, or 3.7% of GDP in 2010.
Fitch Ratings said on Tuesday the Philippines must lift its long-term growth potential through higher investments and sustain fiscal reforms via structural changes in revenue collection if it wanted to achieve investment grade status.