Gov’t spending topped collections in Jan.-MayBy Michelle V. Remo |Philippine Daily Inquirer
The government may keep the budget deficit for the year well within the official ceiling, even as public spending exceeded revenue collections by an estimated P42.8 billion in the first five months of the year.
National Treasurer Rosalia de Leon said the preliminary figure would allow the government to keep the 2013 budget gap at P238 billion or below.
The deficit from January to May was 88 percent higher than the P22.79 billion registered in the same period last year.
However, De Leon said the figure represented a mere 18 percent of the full-year target cap.
The deficit ceiling of P238 billion for this year represents 2 percent of the projected gross domestic product.
Last year, the deficit-to-GDP ratio stood at 2.3 percent.
The Philippines’ favorable fiscal condition is one of the factors that will help attract investors and creditors, De Leon said in a speech during an economic forum organized by The Asset and the Financial Executives of the Philippines (Finex).
De Leon said the latest outflow of foreign capital would only be temporary, given the government’s healthy finances, as well as the country’s strong economic growth.
“This episode of uncertainty we are currently experiencing is but a small bump in our thrust to greater economic prosperity,” De Leon explained.
The budget gap for May alone stood at P13.125 billion, about 32 percent lower than the P19.19 billion recorded in the same month last year.
De Leon said the government’s fiscal position should remain healthy over the short to medium term.
Apart from efforts to improve tax collection, she said, rising contributions of state-owned firms also served to beefing up the government’s overall revenue.
She said improving financial performance of government-owned and -controlled corporations would result in higher dividends collected by the state from the institutions.
In the first semester of the year, the government collected P17.7 billion in dividends from state-owned firms, she said.
This amount is higher than what the government used to collect from them in the past, she noted.
Financial market players in the country can help avert investors’ risk aversion by informing their clients about the country’s sound macroeconomic fundamentals, De Leon said.
“Help us in instilling calm back in the markets, and continue to be our partners in ushering an era of sustained high growth,” she urged the market players.