11-mo deficit only 32% of 2011 target

MANILA, Philippines – The national budget deficit from January to November accounted for only 32% of the full-year 2011 target, the finance department said.

In a statement on Thursday, Dec. 22, 2011, the finance department announced that the November deficit, which measures government’s earnings against its expenses, was at P22 billion. 

Compared to a sizable 267.328 billion in the first eleven months last year, the lower P96.25 billion this year is deceiving. Reducing the deficit should be a good thing, which usually means the government will issue less debt and can put money that would have been spent paying down interest to worthwhile causes like building classrooms. 

The deficit was low since spending was down.

Expenditures slid to P1.35 from P1.37 billion in the period last year. That translates mostly to lack of investment in infrastructure, which is vital in a developing country like the Philippines.

About 4% or P12.5 billion of the projected 2011 budget was intended to go to large-scale infrastructure projects through the
Public-Private Partnership (PPP) program. As it stands only the Daang Hari-SLEx link road, the smallest of the government’s 10 earmarked PPP projects for the year, has been successfully bidded out.

The Aquino administration underspent the Arroyo administration for the first seven months of the year, only hiking up spending near the end of the year. Even with that hike, the government is unlikely to meet its 2011 target deficit of P300-billion or 3% of GDP.

Still, there is reason to hope that next year will be better. Of next year’s P1.816 trillion budget, P140 billion will be allotted to infrastructure development. Nearly twice as much has been earmarked for PPPs. Hopefully that hike in infrastructure spending will result in better roads, more classrooms and an airport terminal the country can be proud of. – Rappler.com