UNDER spending by the Aquino administration resulted in a lower budget deficit in the first quarter, raising fears that the government would miss its economic growth target this year.
The Department of Finance (DOF) disclosed Wednesday that the government’s revenue shortfall in the first three months of the year fell 80.5 percent to P26.197 billion from last year’s P134.2 billion, and was P85.789 billion below the P112 billion ceiling set for the period.
“Strong revenue performance of the two main revenue collecting agencies matched by judicious spending focused mostly on priority programs kept the fiscal deficit in check,” Finance Secretary Cesar Purisima said.
The government raised P323.078 billion in revenues during the first three months of the year, or 22 percent higher than the P265.824 billion generated last year.
The Bureau of Internal Revenue (BIR) collected P199.549 billion, or 14 percent higher than a year ago, while the Bureau of Customs (BOC) raised P62.618 billion.
In March alone, revenue collections reached P107.152 billion, or 10.63 percent more than last year’s P96.860 billion, with the BIR share of P71.562 billion higher by 22.72 percent from a year ago.
Actual disbursements for the first quarter reached P349.275 billion, or P81.982 billion short of program and 12.68 percent lower than a year ago.
In March alone, disbursements stood at P125.283 billion, or 22.05 percent lower than what the government had spent during the same month a year ago.
“The consequential drop in interest expense contributed to the deceleration in total disbursements. Interest payments during the first three months amounted to only P90.7 billion, P10.5 billion lower than program and 16.7 percent lower year-on-year,” Purisima said.
Excluding interest payments, the government recorded a primary surplus of P64.523 billion for the first quarter, a turnaround from the primary deficit of P25.281 billion last year.
Department of Budget and Management (DBM) Secretary Floren¬cio Abad said the release of almost half the P1.645-trillion General Appropriations Act for 2011 would not reflect in the first-quarter fiscal numbers until such time the recipient-agency starts paying cash for the implementation of their respective projects.
He said the stringent review of projecdts to lower budget assumptions hampered the spending momentum of the government.
“You have to make a distinction between us issuing the allotments and actual spending. First, we give the allotment, and then the obligation. Once implemented, starts the payment, which is the disbursement that would impact on the deficit because that’s when you use cash,” Abad said.
Major drag to economic growth
Former Budget Secretary Benjamin Diokno said the government’s under spending would be “a major drag rather than a contributor to economic growth.”
“The Aquino administration has nobody to blame but itself. Congress approved the 2011 national budget promptly and with very little adjustment. The expectation is that the early approval will bring about faster implementation of government projects. It has not happened,” said the University of the Philippines economics professor.
“This reflects a very slow moving bureaucracy if we believe DBM’s press statement that it has already frontloaded the bulk of the 2011 budget. I estimate that more than half of the capital projects have yet to be disbursed. The explanation giver was that project costs are being reviewed. That’s a very poor excuse. The review should have been done and completed during the first six months of the Aquino presidency. The government has a lot of catching up to do. Otherwise it can kiss goodbye to its ‘fighting’ growth target of 7 [percent] to 8 percent,” Diokno said.
WITH REPORT FROM DARWIN G. AMOJELAR