Philippine budget deficit shoots up

Finance Secretary Cesar Purisima. INQUIRER FILE PHOTO

MANILA, Philippines—The Philippines’ budget deficit soared in May, the government said Tuesday, but a senior economic official insisted there was still room to pursue higher spending to sustain economic growth.

The government spent P19.90 billion ($468.31 million) more than it earned in May, Finance Secretary Cesar Purisima said in a statement.

He insisted the deficit was manageable, expressing confidence the full-year fund shortfall would stay within 2.6 percent of the gross domestic product (GDP), or P279 billion.

“We are pleased with the continued rise in revenue collections, especially since this allows us to pursue our spending program for the year while making sure that our fiscal position remains under control,” Purisima said.

“The wide fiscal space will now give us an advantage to finance infrastructure projects and social programs that shall in the long term curb poverty and promote equality.”

The January-May deficit reached P22.79 billion, well within the government’s self-imposed first-half ceiling of P109.34 billion.

The government said it spent P668.43 billion in the first five months of the year, up 13.1 percent compared to the same period last year.

Over the same period, revenues reached P645.64 billion.

For May, revenue grew 9.4 percent to P131.40 billion, while spending reached P151.30 billion.

Purisima said the government remains committed to reaching its 5.0-6.0 percent growth target this year, having recorded 6.4 percent expansion in the first three months.

The Philippines suffered a P197.8 billion budget deficit last year, equivalent to 2.0 percent of GDP.

Officials have said the government will step up its spending this year in order to spur growth.