Budget deficit swells to P41B in H1

The National Government (NG) incurred a budget deficit of P41 billion in the first half of the year, or P9.7 billion, higher than the programmed shortfall of P31.3 billion, Finance Secretary Margarito Teves announced yesterday.

This as the government’s two revenue agencies — the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) — both failed to meet their collection goals for the period.

Data from the Department of Finance (DOF) showed that the BIR incurred a revenue shortfall of P38.6 billion during the period as revenues reached P334.7 billion against the target of P373.3 billion. The BOC incurred a shortfall of P13.1 billion as collections reached P92.2 billion during the period or below the target of P105.3 billion.

For the whole of 2007, the BIR has a revenue target of P730 billion while the BOC’s revenue goal is P228 billion.

Total revenues in the first half of the year reached P510.3 billion or P47.7 billion lower than the target of P558 billion but higher than the P471 billion posted in the same period last year.

Expenditures, on the other hand, reached P551.3 billion, below the program of P589.3 billion. Of the P551.3 billion, the National Government spent P129.6 billion for interest payments and P421.6 billion for other budgetary expenses.

Teves assured that the P63-billion budget deficit target for the year would be met and that the two agencies would be stepping up efforts to improve collections.

“In the succeeding months, the BIR and the BOC will aggressively pursue their action plans to meet their monthly targets and partially recover their shortfall in the first half. We will be complementing our collection efforts with the privatization of big-ticket government assets and more effective implementation of our governance-related programs to attain our revenue goal of P1.1 trillion and meet our deficit target of P63 billion this year,” Teves told reporters.

On the privatization of state-owned assets, Teves said the government would prioritize this year the sale of two big-ticket items: the government’s stake in food and beverage giant San Miguel Corp. (SMC) and in Philippine National Oil Co.-Energy Development Corp. (PNOC-EDC).

The government hopes to raise P50 billion from the sale of its 60-percent interest in PNOC-EDC and another P50 billion from its 24-percent stake in SMC.

“We will still try to target the sale of SMC by the end of the third quarter,” Teves said.

Teves said the sale of these two giant assets would help the government compensate in case the BIR and the BOC fail to meet their revenue goals for the year.

“The worst case scenario is that there is a shortfall for both (BIR and BOC) of P60 billion. It is revenue shortfall not the deficit target. The bottom line is that we will not exceed P63 billion,” Teves said.

In June alone, the government posted a surplus of P0.8 billion but this is lower than the P12.7 billion surplus posted in the same period last year.

Revenues for the month reached P77.7 billion, or lower than the P81.3 billion posted in the same month last year. Expenditures, on the other hand reached P76.9 billion, higher than the disbursements in the same period last year of P68.6 billion.

BIR collections, meanwhile, reached P49.1 billion in June or 2.5 percent lower than the P50.4 billion posted in the same period last year.  BOC revenues also went down by seven percent to P17.2 billion from P18.5 billion.