MANILA, Philippines - The government needs to work harder to raise more revenues and keep spending within programmed for the whole year so that it would be able to meet its yearend budget deficit target of P293 billion, according to the latest Market Call, a report on the Philippine economy issued by First Metro Investments Corp. (FMIC) and the University of Asia and the Pacific Capital Markets Research.
“[B]eing behind in the first quarter means the National Government will have much work ahead to remain on track (in meeting the 2010 deficit target),” said the report.
In the first quarter of the year, the government incurred a budget deficit of P134.2 billion, above the target ceiling for the period of P110.9 billion.
Fiscal authorities and market analysts expected the first quarter deficit to be within the target for the period because of rosy revenues but higher-than-programmed expenditures caused a breach in the budget gap ceiling.
The P134.2-billion deficit in the first quarter was also 12.1 percent above the P119.7-billion deficit incurred in the same period last year.
Total revenues during the period amounted to P265.8 billion or slightly below the programmed collection of P266.3 billion while expenditures reached P400 billion or P22.8 billion above the programmed amount of P377.2 billion.
In March alone, the budget deficit amounted to P63.9 billion or 21.3 percent higher than the deficit incurred in the same month last year.
Total revenues for the month amounted to P96.9 billion or higher by 27.6 percent compared to March last year while expenditures during the month amounted to P160.7 billion or an increase of 25 percent compared to the same month last year.
In their report, FMIC and UA&P Capital Markets Research said there is a strong chance the government would meet its budget deficit target for the year given the trend that expenditures are usually compressed in the second semester of the year.
“Regardless who heads the government, National Government expenditures are usually compressed in the second semester and adjusted to meet deficit targets. This will be likely as a new president and Congress take office,” according to the Market Call.
At the same time, FMIC and UA&P said the government needs to make sure that the two agencies, the Bureau of Internal Revenue (BIR) and the Bureau of Customs continue generating enough revenues so that the deficit is contained within the target.