Gov't breaches deficit goal

The government breached its deficit goal for the first quarter, as spending exceeded the limit while revenues fell short of target. Finance Secretary Margarito B. Teves reported in a press briefing yesterday that the government incurred a P134.2-billion deficit in the first quarter, breaching the P110.9-billion limit and nearly half of the full-year target. That deficit figure was also bigger than the P119.7-billion gap recorded in the same three months of last year. "It was really the expenditures which affected the deficit," Mr. Teves said. Expenditures totaled P400 billion, exceeding the ceiling for the period by P22.8 billion, as the government spent heavily to rebuild facilities destroyed by storms late last year. It also undertook road rehabilitation and nautical highway projects. Acting Budget Secretary Joaquin C. Lagonera said in the same briefing that the higher-than-programmed government spending was due to the earlier-than-usual passage of the national budget in early February and the frontloading of expenditures ahead of the election ban which started March 26. Government spending for the first quarter, Mr. Lagonera said, accounted for a little more than a fourth of the total P1.54-trillion budget. "We can say we are still on track with our expenditure [sic] for the year. Moreover, we expect spending in the second quarter to taper off due to the election ban until May 10 and we will closely work with the Department of Finance in order to calibrate our disbursements," he said. Revenues fall short Revenues amounted to P265.8 billion, a little short of the P266.3 billion programmed for the first quarter. The Bureau of Internal Revenue (BIR) collected P173.9 billion, exceeding its goal by P16.2 billion. Internal Revenue Commissioner Joel L. Tan-Torres said he hopes strong collections would continue, especially from the value-added tax on tollways, estate tax from the implementation of Project Rest in Peace, 5% withholding tax on campaign paraphernalia as well as settlement of government agencies and local governments’ tax deficiencies. As of April 1-26, he said, the bureau’s collections had reached P67 billion, exceeding last year’s collections in the same period by P4 billion. The Bureau of Customs collected P60.6 billion, exceeding its target by P5.4 billion. But income from the Bureau of the Treasury amounted to P13.9 billion, lower than the programmed amount by P2.9 billion. Revenues from "other offices" amounted to P17.4 billion, P19.1 billion short of the P36.6-billion target for this category. P12B from asset sales in 1st half Mr. Teves said there was no plan for now to revise the P293.2-billion deficit target for the year, adding that the government was still confident it can raise up to P12 billion from the sale of some state assets in the first half. The government initially set the first quarter as the deadline for the privatization of three assets, namely: the 10% participating stake of the Philippine National Oil Co.-Exploration Corp. (PNOC-EC) in the Malampaya natural gas project, a portion of the Food Terminal Inc. (FTI) complex in Taguig City, and the government property in Fujimi, Japan. All three are expected to fetch a total of P30 billion in privatization revenues. Difficulties The government eventually moved privatization efforts to the second quarter after experiencing various difficulties in selling the three assets. Asked for updates on privatization efforts, Mr. Teves said that the PNOC-EC board has yet to decide on the mode of sale, explaining that resorting to a public bidding would move the sale farther to the third quarter. This leaves the FTI sale and the Fujimi property lease -- or their alternatives -- as the privatization efforts that could have some promise this quarter. As for the FTI, Mr. Teves said negotiations were still ongoing. "We are looking at anywhere between P7.5-9 billion," he said. He added that the government has had problems attracting qualified parties to develop the Fujimi property. "We are looking at an alternative... to compensate for the P3 billion from Fujimi," he said. Finance Undersecretary Rosalia V. de Leon said the government was looking at the sale of the Philippine National Construction Corporation’s 20% stake in the South Luzon Tollway Corp. and its 40% holdings in Manila Toll Expressway Systems, Inc. as an alternative for the lease of the Fujimi property. She said about P3.6 billion is expected from the sale of these assets. "We still have to work on the mechanics and the mode of the sale," she said. -- Louella D. Desiderio, BusinessWorld