6-month budget deficit narrows to P34.5B

The government posted a budget deficit of P34.5 billion in the first semester as the growth of expenses and of revenues remained at double digits, although still far short of targets.

In the six months to June, the government deficit—defined as its spending level beyond revenue collections—was just about a third of the programmed P109.3 billion. It was, however, twice the P17.23 billion recorded in the same period last year.

The January-June expenses reached P795.4 billion, which was just 90 percent of the program but 13.8 percent higher year on year.

In a briefing, Budget Secretary Florencio B. Abad said this was largely due to disbursements for infrastructure and other capital outlays, which grew by 66.1 percent year on year, as well as maintenance and other operating expenses, which rose by 41.1 percent.

“We are committed not only to sustain our current disbursement performance but also to further accelerate public spending and the delivery of urgent social and economic services,” Abad said.

“With government disbursements in the second quarter growing a bit faster than in the first quarter, we are confident that government spending will again make a significant contribution to economic growth,” he said.

The budget chief said public spending was a significant contributor to the 6.4-percent gross domestic product growth in the first quarter.

Also, six-month revenues reached P760.9 billion, which was 2 percent short of the goal but 11.6 percent higher than the actual take in the same period last year.

In June alone, the budget deficit hit P11.7 billion, or 52 percent higher than that of the same month in 2011.

June expenditures reached P127 billion, 17.8 percent higher than the P107.8 billion spent in the same month last year. Revenues reached P115.3 billion, up by 15.2 percent from P100.1 billion a year ago.

In the same briefing, Finance Secretary Cesar V. Purisima said the fiscal situation as of June gave the government ample space to pump-prime the economy—if necessary—by further accelerating expenditure. However, this would depend on the capacity of various agencies to absorb additional funds.