RP budget deficit up by 14.5% to P33.2B in Feb

(Updated) The government incurred a P33.2-billion budget deficit in February — more than a tenth higher than a year earlier — due mainly to sliding income from Treasury operations. This brought the two-month budget gap to P70.3 billion, 4.9 percent higher than the year-ago level. The government must limit the deficit to P40.6 billion in March in line with its P 110.9-billion programmed gap for this quarter. "We will continue to work hard in improving revenue collection through the sustained implementation of the action plans of the Bureau of Internal Revenue and Bureau of Customs and the realization of our privatization program," Finance Secretary Margarito B. Teves said on Tuesday. "We will endeavor to remain on track with our fiscal program to enable us to continue supporting the urgent needs of our people and sustain economic growth," he added. Economist Victor A. Abola of the University of Asia and the Pacific said the first-quarter deficit cap of P10.9 billion is achievable, especially as the tax season approaches. "I think the target projection for the first quarter is very doable. Normally, collections pick up at the end of March towards April as individuals and corporations start paying taxes," he told GMANews.TV. He also said the BIR and Customs bureau appear to be doing well in hitting their revenue targets. Total revenues in February slid by 5.3 percent to P76.7 billion from a year earlier, while spending was flat at P109.9 billion, the Finance department said. Of the total collections, the Bureau of Internal Revenue contributed two-thirds or P51 billion, 7.5 percent higher than a year earlier. The Customs bureau contributed almost a quarter or P18.1 billion, which was 30.5 percent higher than the year-ago level. On the other hand, Treasury bureau collections went down by three-quarters to P3 billion, while revenues from other offices, which included privatization proceeds, declined by 41.8 percent to P4.6 billion. Revenues for January to February inched up by 6 percent to P169 billion from a year earlier, while expenditures expanded by 5.7 percent to P239.3 billion. Including interest payments, government expenditures went up by almost a tenth to P170.3 billion, the Finance department said. BIR collections went up by more than a tenth to P115.6 billion during the two-month period, while Customs revenues were up by more than a quarter to P35.7 billion. Treasury bureau collections amounted to P8.2 billion, while other offices generated P9.5 billion. The Philippines has had difficulty raising tax revenues due to widespread evasion, corruption and weak implementation of tax laws, leading to a record budget deficit last year as collections failed to keep pace with spending to stimulate the economy amid the global downturn. The government incurred a shortfall of P298.5 billion last year, equivalent to 3.9 percent of the gross domestic product (GDP), due to poor revenues and state failure to sell big-ticket assets. The figure was slightly over its worst-case estimate of P298 billion and way over the year’s cap of P250 billion. The target this year is P293 billion, or roughly 3.5 percent of economic output, as the government tries to improve tax collections amid the recovering economy. Last week, the World Bank cited the need for a detailed and credible strategy to plug the government’s widening budget deficit over time, which it said was crucial to investor, entrepreneur, and consumer confidence — all needed for "inclusive growth." It also asked the state to impose a moratorium on tax-eroding measures, rationalize fiscal incentives, simplify net income taxation to improve compliance among the self-employed and professionals, and adjust excise taxes for tobacco, alcohol and gasoline, among other reforms. — GMANews.TV