Gov’t expects to incur P43-B budget deficit in Q3

MANILA, Philippines - The government expects to incur a budget deficit of P42.9 billion in the third quarter this year as it steps up spending on infrastructure to boost economic growth, data from the Department of Finance showed.

However, the expected budget shortfall for July to September is still 14 percent lower than the P49.9 billion recorded in the same period last year.

 Total expenditures are seen to reach P551 billion, up 15.5 percent from P477.03 billion a year earlier.  Of the total, P440.02 billion will account for operating expenditures while P107.88 billion will comprise capital outlays which include infrastructure spending.

The government is targeting P508.1 billion in revenues for the third quarter.  The amount represents an increase of 19 percent from the P427.1 billion reported in the same period a year ago.

Of the total estimated revenues, P365.59 billion will come from the Bureau of Internal Revenue (BIR), P103.2 billion from the Bureau of Customs and P4.39 billion from other offices.

The Philippines posted an unexpected budget surplus of P8.51 billion in May as the government frontloaded spending to sustain economic growth. This was a reversal of the P42.84-billion fiscal deficit reported in the same month the previous year.

The government aims to bolster spending on roads, airports, water supply and transportation to five percent of the country’s total economic output by the time President Aquino steps down from office in 2016.

For this year, the government planned to spend P399.43 billion on public works or around three percent of gross domestic product (GDP). The figure is expected to increase further to P826 billion by 2016.

The World Bank has urged the Philippines to ramp up public spending on infrastructure to sustain its growth trajectory and improve its competitiveness.  Foreign companies cite poor infrastructure as a barrier to investment and growth.

The country’s infrastructure facilities, particularly airports and transportation,  continue to lag   behind many of its Asian neighbors.