Q1 deficit 'well within' target
MANILA, Philippines – The government's budget deficit for the first quarter was well within program as both its revenues and spending fell below targets.
The Department of Finance (DOF) announced it recorded a deficit of P40.2 billion in March, bringing the total for January-March to P84.1 billion.
The first-quarter deficit was 27% higher than last year's P66.48 billion, but lower than the P145.85-billion ceiling set by government.
Revenues collected mainly by the Bureau of Internal Revenue (BIR) and the Bureau of Customs amounted to P398.41 billion, 7% lower than the programmed collections of P428.5 billion.
Expenditures, on the other hand, reached P482.5 billion, 16% below the target of P574.34 billion. The government did not meet its spending goal despite rehabilitation efforts in areas ravaged by Typhoon Yolanda.
Nevertheless, the Finance department said its fiscal position was strong.
It said revenues were "fast growing," owing to reforms aimed at plugging leakages in the tax system.
Revenues for the first quarter fell short of target, but were up 9% from P364.3 billion last year. The BIR collected P264.7 billion, up 8% year on year, while the Customs generated P86.5 billion, a 26% jump.
“Growing revenue collections, most notably that of the Bureau of Customs, is just one of several wins we have garnered recently,” DOF Secretary Cesar Purisima said.
In March alone, the Customs posted a 34.4% annual growth in collections, the highest monthly growth rate it recorded since December 2010. It was also the third consecutive month that the bureau had a growth of above 20%.
“The figures on the Bureau of Customs’ collections are quantitative proof that the changes we have laid out in the Bureau are indeed taking effect,” Purisima stressed.
Last year, the bureau implemented a series of reforms such as the appointment of new top-level officials and the return of employees to their mother units.
Purisima pointed out that prior to the reforms, cash collections by the bureau only grew 4.9%. "When the reform program had begun to stabilize, the year-on-year improvement spiked up to 23.9%," he said.
The government incurs a deficit when its expenditures exceed its revenues. This deficit is funded by borrowings.
The Aquino administration has been trying to shore up collections so it can trim its deficit without affecting its spending program. Trimming the deficit will mean lower debt expenses for government and more funds for social services. – Rappler.com