The government ended last year with a worse-than-expected budget deficit of P298.5 billion – P48.5 billion past the target – due to poor revenues as a result of laws cutting taxes, as well as the state's failure to sell big-ticket assets. The gap is equivalent to 3.9% of the 2009 gross domestic product. “Our budget deficit in 2009 was higher than our likely scenario of a budget gap of P290.2 billion announced earlier,” Finance Secretary Margarito Teves said in a statement on Thursday. “We were actually hoping to perform better than the likely scenario due to the improved tax collection performance in December. But the revenue gains were offset by increased spending for infrastructure towards the end of the year,” he added. But Teves said the government managed to go below the P300-billion deficit expected by the market. “Also, our actual 2009 deficit, which is equivalent to 3.9 percent of the gross domestic product, was relatively better than most of our peers in the region,” he added. Deputy spokespersons Gary Olivar and Ricardo Saludo agreed with Teves, even as they blamed stimulus spending due to the financial crunch and reconstruction services because of recent calamities as factors adding to the deficit. The spokespersons also urged the citizens, particularly those in the business community, to cooperate with the government in improving fiscal performance. “If the people join hands with the government, we will move forward,” Olivar added. “However, we continue to be concerned that our fiscal gains from past reforms are being quickly eroded by various tax relief measures,” Teves said. He added that the government hopes to sustain its revenue performance through “action plans” of revenue agencies to improve collections, and by finally selling prime state assets. “But we need the cooperation of Congress to protect our fiscal gains from further erosion.” Total revenues reached P1.1 trillion — P115.9 billion below the target — while expenditures also slid by P67.4 billion to P1.42 trillion. Of the total revenues, the Bureau of Internal Revenue (BIR) collected P750.3 billion, or P48.2 billion lower than its goal. The Bureau of Customs (BOC) collected P220.3 billion — P53 billion below its target due to a sharper drop in imports. On the other hand, the Treasury bureau's revenue of P69.9 billion was seven times its goal. The revenue of other offices, which include privatization proceeds, reached P82.7 billion —P24.6 billion lower than the goal. For December alone, the budget deficit reached P26 billion, more than 18 times higher than the deficit a year earlier. Total revenues for the month reached P101.5 billion, 16.3 percent lower than a year earlier. BIR revenues amounted to P68.4 billion last December, nearly a fifth higher that in the same month in 2008. Customs collections were also up by 0.4 percent to P18.9 billion Meanwhile, Treasury revenue grew by almost half to P9.4 billion. But other offices posted a decline of more than three-quarters to P4.9 billion. Total expenditures for December reached P127.6 billion, 3.9 percent higher than a year earlier, the government said. This year, the government expects a budget deficit of P293 billion.
