First-quarter deficit over half of full-year target

LOWER REVENUES blamed on the global economic downturn and higher expenditures widened the budget deficit to P119.7 billion in the first quarter, the government yesterday reported.

The January to March shortfall accounts for 60% of the P199.2-billion ceiling set for 2009 and is more than double the P51.6 billion incurred in the same period last year. It is also higher than the programmed P110.1 billion for the quarter.

"This [deficit] is largely due to lower revenues that were adversely affected by the slowdown in economic activity as reflected in the lower imports and the decline in collections," Finance Secretary Margarito B. Teves said.

"Infrastructure spending increased by 73.5% ... while maintenance and other operating expenses increased by 41.2% ... mainly due to additional disbursements for the conditional cash transfer program."

Total revenues for the period hit P235.4 billion, lower than the target of P251.8 billion. Total expenditures amounted to P355 billion.

The tax bureau collected P154.8 billion, lower than its P165.3-billion goal, which tax chief Sixto S. Esquivias IV said was due to a law exempting minimum wage earners from income tax and slower economic activity.

Customs, meanwhile, collected P43.1 billion, also below its target of P51.3 billion. Customs deputy commissioner Alexander M. Arevalo said the shortfall was due to a decline in imports.

The Bureau of Treasury contributed P20.7 billion while other offices earned P16.8 billion.

The government has said it would have to borrow more to fund the higher shortfall and yesterday, National Treasurer Roberto B. Tan announced that this year’s borrowing mix would be tweaked to include more overseas loans.

"We will manage ... by adjusting the borrowing mix from 75-25 in favor of domestic [loans] to 72-28. The new figure for external borrowings is P174.9 billion versus P147.4 billion previously and domestic borrowing figure is now P439 billion from 442 billion," he said.

"We are looking for additional ODA (official development assistance) financing of around $500 million."

Mr. Teves said the Asian Development Bank had offered the P500 million worth of ODA but added the government was still deliberating whether to accept it. — ADBR