6-month budget deficit cut to only P17.23B
The national government’s budget deficit in the first half stood much lower than anticipated as public expenditures fell way below the programmed level.
Economic officials said the deficit for the first six months gave assurance that the full-year figure would be much lower than the P300-billion ceiling set for 2011.
Nonetheless, they said the government intended to spur spending, especially for infrastructure and social services, in the second half. Consequently, the deficit in the last six months of this year is expected to be higher than that registered in the first six months.
The Department of Finance reported Wednesday that the deficit from January to June amounted to only P17.23 billion, significantly smaller than the ceiling of P152.13 billion for the period.
Documents showed that the smaller deficit was despite the slightly lower-than-target revenues collected by the government.
Expenditures for the six-month period amounted to only P698.87 billion even if the spending program would have allowed the government to disburse as much as P838.55 billion.
Revenues, accounted for largely by tax collection, reached P681.64 billion, falling short of the P686.42-billion target for the period.
The finance department likewise reported that for June alone, the budget deficit reached P7.69 billion. This came as revenues amounted to P100.14 billion while expenditures reached P107.83 billion.
The ability of the government to trim the deficit helped the country win the favor of credit-rating firms. The Philippines’ credit rating got a boost this year with upgrades from international ratings firms, which had cited the seeming commitment of the Aquino administration to put its fiscal house in order.
Last month, Finance Secretary Cesar Purisima vowed that the government would reduce its deficit to much more manageable levels.
Moody’s raised its credit rating for the Philippines from three to two notches below investment grade while Fitch raised its rating for the country from two notches to just a notch below investment grade.
Some economists, however, have opined that although the smaller-than-programmed deficit in the first half was good for the country’s fiscal standing, the underspending affected the economy’s ability to reach its growth potential.
