Purisima says budget overruns pushed deficit wider

The deficit government incurred in the first half ballooned beyond its programmed ceiling because of budget overruns that included capital outlays for fast-tracked infrastructure projects, subsidies to government agencies, and funds for El Niño mitigation activities, the Finance Department said Thursday. There were double-digit, budget overruns that pushed the deficit 30.6 percent over the programmed ceiling to P196.7 billion in the first six months, the department said. In an emailed statement, Finance Secretary Cesar Purisima said the biggest of these excesses was the higher disbursements for infrastructure and capital outlays of P33 billion. Plus, the release of the other half of funds allotted for potable water supply in waterless areas also spurred the government to exceed the program deficit by 30.6 percent during the period, Purisima said. “Spending for maintenance, operating and other expenses or MOOE was higher by P22.0 billion or by 30.8 percent due to the release of funds for the El Niño mitigation activities; for the financial subsidy to LGUs; for the activities of the Philippine National Police to sustain peace and order; and the frontloading of funds for the 2010 Census of Population and Housing," Purisima said, citing the major expenditures government made to incur a budget shortfall of P196.7 billion. Various government-owned and -controlled corporations were also subsidized, particularly the National Transmission Corp.'s connection assets that were being constructed by Korean firm Hanjin Heavy Industries Inc. and its partner in Subic which exceeded its program by P1.7 billion or 28.4 percent, the finance chief said. Releases that were done ahead of schedule for the price stabilization mandate of the National Food Authority also helped widen the spending gap, Purisima added. —VS, GMANews.TV