March budget deficit hounded anew by weak state spending
NOT SPENDING ENOUGH? President Aquino answers questions from the Foreign Correspondents Association of the Philippines during its forum at the Mandarin Oriental Hotel in Makati City on October 12, 2011. At the forum, acknowledged that government spending had been running well behind target that year and promised spending would be fast-tracked. But the January-March 2012 expenses reached only P394.88 billion, which was P45.7 billion short of the programmed spending although 52.7 percent higher year on year. INQUIRER PHOTO/EDWIN BACASMAS
The government posted a budget deficit of P28.62 billion in March as the surge in expenses outpaced the growth in revenues, according to the Bureau of the Treasury.
This brought the deficit for the first quarter to P33.91 billion, which was about 41 percent of the P82.81 billion that the government intended to spend on top of national budget for that period.
Also, the three-month deficit was 29 percent more than the P26.2 billion recorded in the same period of 2011.
January-March expenses reached only P394.88 billion, which was P45.7 billion short of the program but 52.7 percent higher year on year.
Vishnu Varathan, the Singapore-based economist of Mizuho Corporate Bank, lamented that the government’s spending targets are “chronically being missed.”
“This points to inherent institutional problems getting government spending on the ground,” he told Reuters. “And it makes all the difference for an economy that is trying to build infrastructure and expand social programs.”
“So the budget numbers are really bad news wrapped in an apparently pleasing wrapper of fiscal consolidation,” he added. “While the peso could benefit purely on the deficit differentials, the current situation subtracts from intended government boost to growth.”
“Above all, it darkens the medium- to long-term growth potential and prospects, the most worrying aspect in my books,” Varathan explained.
Three-month revenues reached a total of P360.97 billion, which was P3.2 billion more than the goal and 11.7 percent higher than last year’s.
In March alone, expenditures reached P144.05 billion, 15 percent higher than the P125.28 billion spent in the same month last year.
Revenues reached P115.43 billion, an increase of 7.7 percent from P107.15 billion.
The March fiscal performance “affirms our strategy of consolidating our fiscal position while at the same time investing heavily in key social and economic services,” Finance Secretary Cesar V. Purisima said in a statement.
He said that, netting out the interest payments from expenses, the national government continued to run on a primary surplus, pegged at P64.58 billion in the first three months.
“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,” he said.
From January to March, the Bureau of Internal Revenue contributed revenues of P229.04 billion, which was P3.6 billion short of the target but 14.8 percent higher year on year.
The Bureau of Customs chipped in P69.53 billion, which was P11.8 billion less than the target but 11 percent better than last year’s collection.
Also, the Bureau of the Treasury turned in P37.76 billion, which was P16.07 billion more than the program although one percent less than the year-ago level.
Other government offices yielded P24.64 billion, surpassing the goal by P2.6 billion and also 8.2 percent better year on year.—Ronnel W. Domingo with a report from Reuters
