Aquino gov’t trims deficit to P164B in 2013

MANILA, Philippines – The Aquino administration incurred a budget deficit of P164.1 billion in 2013, significantly below its P238-billion ceiling, the Department of Finance announced.

The shortfall was also lower than the P242.8 billion deficit recorded in 2012, and was equivalent to 1.4% of gross domestic product (GDP).

“I am pleased to note that the national government’s budget deficit for 2013 has been contained to 1.4% of GDP, well within the country’s 2% deficit ceiling,” Finance Secretary Cesar Purisima said.

The government incurs a deficit when its revenue collections fall below its expenditures. This deficit is funded by borrowings.

The Aquino administration has been trying to shore up revenue collections so it can trim its deficit without affecting its expenditure program. Trimming the deficit will mean lower debt expenses for government and more funds for social services.

Both the country’s revenues and expenditures grew in 2013 from their 2012 levels, but fell short of targets set by fiscal authorities.

Data from the Bureau of Treasury showed the government collected P1.716 trillion revenues in 2013, 12% higher than 2012’s collections, but P30 billion lower than the target of P1.746 trillion.

The Bureau of Internal Revenue and Bureau of Customs grew their collections year-on-year, but they missed their collection goals.

Driving the BIR’s collections was the Sin Tax Reform Law, which was implemented January 2013. “The first year of implementation has been largely successful,” said Purisima.

For customs, he said the results of major reforms “have been encouraging.”

Government expenditures in 2013 stood at P1.88 trillion, also lower than the P1.984-trillion target. – Rappler.com