H1 deficit seen below ceiling

The budget department said the budget deficit stayed below the ceiling in the first half of the year as the government spent less than programmed.

According to Budget Secretary Florencio Abad, latest estimates point to a deficit lower than P150 billion for January to June.

Under the government’s fiscal program for 2011, the deficit should be kept at or below P152 billion in the first semester.

In a chance interview with reporters at the launch of two budget-related projects on Wednesday, Abad admitted that the lower-than-programmed deficit for the period was largely due to the lower-than-planned expenditure of the government.

He, however, said that the government was expected to accelerate spending in the second half.

Abad said the government would likely spend in the second half an amount bigger than programmed for the period. This will offset the underspending in the first six months.

“We expect to hit the full-year (expenditure) program,” Abad said.

He said the government aimed to spur spending, especially on infrastructure, in the next six months.

For the entire 2011, the government had set its expenditure program at P 1.71 trillion. It is targeting to raise at least P1.41 trillion in revenue to keep the budget deficit at or below P300 billion.

Latest government data showed that the budget deficit hit P9.54 billion in January to May, down by 94 percent from P162 billion in the same period last year.

The P300-billion deficit ceiling set for this year is lower than the P314 billion registered last year.

This year’s deficit ceiling is equivalent to 3.2 percent of the country’s expected gross domestic product (GDP), better than last year’s 3.7 percent.

The gradual decline of the deficit is a target of the Aquino administration, the term of which ends in 2016.