10-month budget deficit down 2.7% at P112.5B

The government incurred a slightly lower budget deficit in October from a year ago, staying poised to keep the fiscal gap for the full year well within the official ceiling for 2013.

The Department of Finance reported Thursday that the national government’s budget deficit for October amounted to P11.2 billion, down 4 percent from P11.7 billion in the same month last year.

This brought the deficit for the first 10 months of the year to P112.5 billion, lower by 2.7 percent from P115.6 billion in the same period last year.

The deficit in the year to October indicated the likelihood that the budget gap for the full year would stay below the limit set at P238 billion, or 2 percent of gross domestic product (GDP).

The latest deficit meant that the government has leeway to incur a budget gap of as much as P125.5 billion in the last two months of the year without breaching the full-year cap.

Finance Secretary Cesar Purisima earlier told reporters that the government would maintain fiscal discipline by avoiding a breach of the deficit limit. But he also said the government intended to spend as much as the ceiling would allow in order to help sustain a robust growth for the economy.

In October, the slight decline in the deficit was brought by the minimal drop in expenditures, with revenue collection registering flat growth. Expenditures for the month reached P145.5 billion, down 0.3 percent from P146 billion in the same month last year.

Revenue collection amounted to P134.3 billion, the same as that in October last year.

From January to October, total expenditures reached P1.51 trillion, up 10.2 percent from P1.37 billion in the same period last year. Revenue collection for the 10-month period amounted to P1.4 trillion, rising by 12 percent from P1.25 trillion in the same period last year.

Budget Secretary Florencio Abad had said that the government would use the available “fiscal space” in order to partially meet the expenditure requirements for post-calamity rehabilitation and reconstruction.

Supertyphoon Yolanda, which hit the country in November, led to loss of lives and damage to property and public infrastructure. Agriculture losses were estimated at more than P11 billion while damage to infrastructure was estimated at over P13 billion.

The government is setting a pledging session where foreign development lenders will be requested to commit amounts of low-interest loans to the Philippines to help rebuild the devastated areas in the Visayas. Michelle V. Remo