BATU, Indonesia. Photo by Jes Aznar

Monday, October 20, 2008

the budget gap swells

Budget deficit widens in September
By Iris C. Gonzales
Tuesday, October 21, 2008

The government’s budget deficit swelled to P21.6 billion in September, a 48.9 percent increase from the P14.5-billion shortfall recorded a year ago due mainly to higher than expected spending and lower than programmed revenues, Finance Secretary Margarito Teves reported yesterday.

The September deficit brought the January to September budget gap to P53.4 billion or P18.2 billion more than the programmed ceiling of P35.1 billion.

“This was due to higher than expected spending and lower than programmed revenues,” Teves said.

Revenue collections in September reached P89.6 billion while total expenditures reached P111.3 billion. Of the P89.6 billion, the Bureau of Internal Revenue (BIR) collected P55.8 billion, or 14 percent higher than the P48.9 billion collected in the same month last year.

The Bureau of Customs collected P25.8 billion during the month, 35.1 percent higher than the P19.1 billion collected in the same period last year.

Total collections of the Bureau of the Treasury amounted to P2.2 billion in September, down 74.3 percent compared to last year’s level mainly due to lower income from investments. Collections from other offices amounted to P5.9 billion or an increase of 34.1 percent from a year ago.

“The bigger contributor to the deficit was the increase in spending for social services and infrastructure,” Teves said.

Total expenditures in September increased by 16.6 percent to P111.3 billion compared to the P95.4 billion disbursed in the same period last year. Of the total expenditures, actual disbursements for projects and operations increased by 25.8 percent to P82.1 billion while interest payments declined by 3.3 percent to P29.2 billion.

Total revenues for the nine-month period reached P879.9 billion, P14.1 billion lower than the collection goal for the period of P894 billion.

Of the total revenues, the BIR collected P587.9 billion, P18.9 billion lower than the program while the BOC generated P193.2 billion in revenues during the nine-month period. This is P7.3 billion more than its target due mainly to higher rice imports by the National Food Authority (NFA).

BIR Deputy Commissioner Nelson Aspe attributed the revenue shortfall to additional tax exemptions from the minimum wage law implemented starting last July.

“The biggest contributors to the shortfall was the effect of the additional exemptions to the income tax collections,” Aspe said.

The Bureau of the Treasury reached its collection target of P47.8 billion while total revenues from other offices, including proceeds from privatization reached P51.1 billion or lower by P2.5 billion against programmed targets.

Expenditures, on the other hand, reached P933.3 billion, amid increased spending for infrastructure and social services.

Teves expressed optimism that the government would still be able to keep the budget deficit at P75 billion. “We will not exceed the P75 billion,” he said.

He said the government expects to generate P25 billion from the sale of its remaining stake in Petron Corp. which has already been put on the auction block.

The government expects to book the proceeds of Petron before the end of the year.

“For the remainder of the year, we will continue to work harder to ensure that the National Government has the resources to support the needs of its people during these challenging times,” Teves said.