Gov’t borrowing up 39.49% to keep 2% GDP deficit

Latest data from the Department of Finance showed that total government borrowing increased by 39.49 percent in the first five months of the year compared to a year ago. Total borrowings from the foreign and local debt markets grew from last year’s January to May of P270.880 billion to P377.848 billion for the same period this year.

 

The increase in borrowing is attributable to the government’s effort to contain its budget deficit to two percent of gross domestic product.

 

Government borrowing from the domestic market in the first five months of 2012 amounted to P282.605 billion. This is 101.74 percent higher than the P140.086 billion borrowed in the same period last year. 

 

On the other hand, the government’s foreign borrowing from January to May declined to P95.243 billion from last year’s P130.794 billion. The reduction in foreign market borrowing is due to the Aquino administration’s effort to reduce its external debt. 

 

However, relative to GDP, Gross external borrowings in May rose to P11.529 billion from the May 2011’s P2.489 billion. Gross domestic borrowings dropped to P18.73 billion from P50.981 billion recorded in the same period last year. 

 

Revenues

 

The government hopes to contain the budget gap at roughly P280 billion this year or 2 percent of  GDP from the actual P197.8 billion recorded last year. 

 

The government recorded a budget deficit of P19.901 billion in May, bringing the January to May fiscal deficit to P22.786 billion. 

 

According to the Finance department, Revenue collections in the first five months of the year reached P645.645 billion, higher than the P581.501 billion generated a year ago. Expenditures amounted to P668.431 billion, also higher than the P591.041 billion a year ago. 

 

In May alone, revenues rose to P131.403 billion from P120.088 billion a year ago while expenditures also increased to P151.304 billion from P129.689 billion a year ago. — DVM, GMA News