The government incurred a budget deficit of P164.1 billion last year, much lower than the ceiling of P238 billion set by fiscal authorities, according to the Department of Finance.
The latest budget gap, equivalent to 1.4 percent of gross domestic product (GDP), was also lower than the P242.8 billion recorded in 2012.
The DOF said the government’s latest fiscal position showed that the Philippines, which last year secured investment grades from major international credit-rating firms, meant to continue improving its creditworthiness.
“The fiscal gap narrowed … behind improved revenue collections and prudence in expenditures,” the DOF said in a report released Friday.
The latest budget deficit came about as revenue collection, composed largely of taxes and import duties, hit P1.716 trillion while expenditures amounted to P1.88 trillion.
The expenditures were up year-on-year by 6 percent, but came in short of the P1.98-trillion program for the year.
The government credited the spending shortfall, amounting to P100 billion, to efforts to streamline operations of line agencies to save on costs.
Critics, however, said the lower-than-target spending was due largely to weak absorptive capacity of some agencies, which failed to maximize their budget allocations.
The Department of Budget and Management had adopted the Disbursement Acceleration Program (DAP) in a bid to accelerate spending, but the program was stopped on claims of unconstitutionality.
Under the DAP, the budget department would reallocate funds from slow-to fast-moving projects, claiming this would help ensure spending programs were realized as planned.
However, such maneuvering of the national budget was questioned on grounds that it violated the Constitution.
Meantime, revenues were up year-on-year by 12 percent, but were slightly short of the P1.746-trillion target.
The Bureau of Internal Revenue, the government’s biggest revenue earner, turned in P1.217 trillion. The amount was 3-percent short of the goal but was up year-on-year by 15 percent.
The Bureau of Customs, on the other hand, collected P304.5 billion, 10 percent short of the target but up year-on-year by 5 percent.