Budget deficit at P242.8B in 2012: Finance Dept

(Updated 2:28 p.m., 5 March 2013) The government's budget deficit for the full year of 2012 was P242.8 billion, according to the Department of Finance on Tuesday.

The amount is 2.3 percent of the GDP, below the official deficit ratio target for the year of 2.6 percent or P279.1 billion.

Expenditures for the full year also grew 14.1 percent year-on-year to P1.777 trillion from P1.557 trillion, while total revenues reached P1.53 trillion, 12.9 percent better than 2011's total revenues of P1.35 trillion.

Interest payments for the year was at P312.8 billion, P4.8 billion lower than programmed. As a percentage of total revenue, interest payments were down to 20.3 percent in 2012 from 24.8percent in 2009. Interest payments as a percentage of total expenditures also went down, to 17.6 percent in 2012 from 19.6 percent in 2009.

Netting out interest payments, the government had a primary surplus of P69.9 billion for 2012.

For the month of December, the budget deficit was P115.7 billion, 14 percent higher year-on-year. Expenditures increased 14.4 percent to P242.1 billion from P211.7 billion in the same month in 2011, while earnings reached P126.4 billion, up 14.75 percent year-on-year.

"We are working hard to further sustain the gains that have been made on both the revenue and expenditure side," said Finance Secretary Cesar Purisima.

Among the government's revenue collecting agencies, the Bureau of Internal Revenue collected P1.057 trillion in 2012, only P9 billion shy of its target for the year of P1.066 trillion.

"To further expand revenue collection in 2013, we are working closely with the Bureau of Internal Revenue to improve collection performance, especially from estate or inheritance tax and income taxes from the self-employed and professionals sector, and with the Bureau of Customs to improve compliance in the declaration of import values," said Purisima. "We are also undertaking several efforts to improve information sharing between BIR and BOC as well as among other national government agencies to further strengthen our ability to evaluate the correctness of the tax payments of different entities."
 
"On the legislative side, with the passage of the Sin Tax Bill in 2012, we will work on reforming the fiscal incentives regime and the fiscal regime on mining this 2013."

Purisima added that the government's strong fiscal position due to factors such as increased revenue collection allowed for key expenditures such as additional capitalization for the Bangko Sentral ng Pilipinas. "The P20 billion increase in capitalization should help the BSP in stabilizing the local currency which is critical in maintaining macroeconomic stability," he said.

The inter-agency Development Budget Coordination Committee has committed to keeping its deficit target to 2 percent of GDP in 2014.

The 2014 deficit target of P266.2 billion was announced earlier this month in National Budget Memorandum No. 116, which sets the macroeconomic assumptions, fiscal targets and department budget ceilings that should guide departments and agencies when drawing up their budget proposals for next year. — BM, GMA News