ASEAN KEY DESTINATIONS
Philippine budget deficit swells in December
The Philippines' fiscal gap widened by 4 percent in 2010, but fell below the ceiling for the year, owing to insufficient revenues, the country's economic managers said.
In a briefing late Friday, Department of Budget and Management (DBM) Secretary Florencio Abad cited preliminary data showing the full-year budget deficit reaching P309.8 billion last year from P298.5 billion in 2009. This was, however, below the P325-billion ceiling for 2010. In December alone, the fiscal gap swelled to P40.142 billion from the previous month's surplus of P482 million amid higher spending, Abad said.
He said last year's deficit was equivalent to 3.6 percent of the country's gross domestic product (GDP).
"It's below ceiling because of higher revenues and managed spending," the DBM chief said. Full-year revenues totaled P1.207 trillion, or 9.7 percent higher than the P1.1 trillion in 2009. Expenditures rose a slower 6.7 percent to P1.516 trillion from P1.42 trillion in the previous year.
The two main revenue collecting agencies, the Bureaus of Internal Revenue (BIR) and of Customs (BOC), failed to meet their targets for 2010 in spite of the 7.5-percent year-on-year improvement in collections.
The BIR fell short of its P860-billion target after raising P822.4 billion, while the BOC generated P259 billion of its P280-billion collection goal.
The Aquino administration inherited a fiscal deficit of P196.7 billion when it took office during the second half of 2010.
The higher-than-programmed revenue shortfall for the first half of last year prompted the new government to jack up the full-year deficit ceiling to P325 billion as President Benigno Aquino 3rd wanted to pour more money into agriculture and infrastructure to sustain the economy's recovery from the global slump in 2009.
Faced with a huge deficit that could hamper his administration's efforts for fiscal consolidation, President Aquino's economic team took the zero-based budgeting approach to reduce revenue leakages.
"We don't think a balanced budget is good for the economy at this moment," Finance Secretary Cesar Purisima told reporters.
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