Shortfall still under control

Business World

Revenue gains, prudent spending cited; Nov. data out tomorrow

THE GOVERNMENT likely kept its budget deficit as of November "much below P300 billion," a Cabinet official said, putting it well on track to meeting this year’s target.

Fiscal data for the month will be reported tomorrow and Budget Secretary Florencio B. Abad last Friday said higher revenue collections and continued "prudent" spending played key roles in keeping the shortfall under control.

"Deficit is okay. But I think the result was mainly because of higher revenues last month," Mr. Abad told BusinessWorld, adding that expenditures had been "kept prudent."

He declined to be more specific, saying "just wait for the announcement on Tuesday."

The government recorded a P10.5-billion deficit last October. This brought the 10-month tally to P270.3 billion, comfortably below the P292.8 billion programmed for the period and well under the P325-billion ceiling set for 2010.

Mr. Abad pointed to "better results" for the tax and customs bureaus which, despite missing their November collection goals, took in more money compared to last year.

An 18% gain for the Bureau of Internal Revenue (BIR) was noted and the budget chief said the Bureau of Customs (BoC) also improved by 14%.

The BIR, which accounts for about two-thirds of the government’s tax take, last week said it failed to meet its P86.03-billion target for November, collecting only P82.43 billion. The result, however, was an improvement from the P70 billion collected in the same month last year.

It also brought the agency’s January-November count to P753.23 billion, below the P783.030-billion goal for the period. With a month left to 2010, BIR chief Kim Jacinto-Henares last Wednesday said the full-year target of P860.4 billion would not be achieved.

The BoC, meanwhile, last Friday said it had also fared poorly in November, announcing cash collections of P18.35 billion that were short of a P24.14-billion goal. Mr. Abad’s claim of a 14% improvement could not be immediately verified.

The BoC’s full target for the month is P26.73 billion, which includes P2.59 billion in Tax Expenditure Fund (TEF) collections involving subsidies for importations by government agencies.

The preliminary data brought Customs’ 11-month take to P231.85 billion, over P30 billion short of its P263.49-billion goal.

"The agency is unlikely to meet its 2010 cash collection goal of P241.6 billion... as well as its full-year goal [of P280 billion]," Customs Commissioner Angelito A. Alvarez said in a statement.

He previously said the bureau was no longer counting the TEF, which has been affected by a reduction in government imports, as no earnings were actually being gained.

Mr. Alvarez, in the statement, explained the November shortfall was due to a stronger peso, tax credit availments and duty-free importations.

The deficit hit a record P298.5 billion last year as the government increased spending to counter a global economic downturn.

This year’s P325-billion cap was adopted in July by the new Aquino administration, which noted the need to sustain growth after its predecessor breached the first-half ceiling. -- from a report by P. P. Magtulis