Budget deficit reaches P16B in January as gov’t steps up spending

MANILA, Philippines—The government incurred a budget deficit of nearly P16 billion in January—a reversal of last year’s P13-billion surplus—as it hiked spending, releasing more funds to line agencies.

The Department of Finance (DoF) on Wednesday reported that total government expenditures in January reached P142.30 billion while total revenues amounted to P126.35 billion.

The deficit for the month thus settled at P15.9 billion.

The expenditures for the month represented a 16-percent rise from the P122.49 billion reported in the same period last year, the DoF said.

The government posted a deficit in the first month of the year after it released more money for social services and infrastructure, hoping to pump-prime the economy, officials said.

Last year, the lower-than-target public spending reportedly led to a slowdown in the growth of the economy.

However, the deficit in January was not only driven by the increase in public spending. A decline in revenue collection also contributed to the budget gap for the month.

Data from the DoF showed that total revenues for January marked a 7-percent drop from the P135.9 billion reported in the same month last year.

Officials claimed that the lower amount of administrative fees being collected by various government agencies led to the drop in revenues, which occurred despite the increase in the tax- and import-duty collections by the Bureau of Internal Revenue and Bureau of Customs (BoC).

Data also showed that revenues remitted to the Bureau of the Treasury, including administrative fees and dividends, amounted to P11.05 billion in January, down year on year by 64 percent from P30.98 billion.

Meantime, the BIR reported that its revenue actually grew because of its pursuit of tax cheats and the enhancement of efficiency in tax collection.

The BIR turned over P85.15 billion to state coffers—up 14 percent from P74.57 billion.

The BoC collected P21.99 billion, rising by 7 percent from P20.54 billion.

Last year, the Philippine economy grew by 3.7 percent.

Although analysts described the growth rate as respectable, it was still a sharp deceleration from the 7.6 percent registered in 2010.

Originally posted at 05:48 pm | Wednesday, March 21,  2012