Q1 deficit narrower than program, says DBM
The budget deficit during the first quarter of the year will likely fall below the programmed ceiling of P112 billion, Budget Secretary Florencio Abad said Tuesday. In an interview during the 75th anniversary celebration of the Department of Budget and Management, Abad said that the strong revenue performance of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), as well as prudent spending by the Aquino administration allowed government to beat the budget deficit program from January to March this year. The Aquino administration projects revenue collection to reach P319.3 billion and expenditures to hit P431.3 billion in the first quarter of 2011. Government spent less than the programmed capital outlay for the first quarter since agencies reviewed their project cost estimates for the year, Abad said. “We did not expect that spending would not accelerate as we had thought it would." The Department of Public Works and Highways for example, spent the first three months of the year reviewing project costs to increase government savings, said Abad. “We are optimistic that a significant level of savings would be generated once the cost assumptions have been reviewed," he said. More spending expected Spending in the coming months is expected to increase, Abad said. “It is likely that the impact of the spending would be felt either in April or May. But you know the advantage of reviewing [the project cost assumptions] is that you get the same projects done at a lesser cost, so you can actually do more projects," he said. The programmed spending for the second quarter of the year is pegged at P407 billion. He said, however, that the strong fiscal performance in the first quarter has given government breathing room for more expenses for the following months. “You expect accelerated spending in the coming months, which may give you a fiscal performance that is not as positive in terms of achieving a balanced budget compared to the first quarter. Since we are front-loading, we really don’t mind because what is important is we get the spending done," he added. Under the P1.645-trillion General Appropriations Act for 2011, government expects to trim the deficit to P300 billion or 3.2 percent of the gross domestic product. The country's budget shortfall widened to a record P314.5 billion or 3.7 percent of GDP last year from P298.5 billion or 3.9 percent of GDP in 2009, due to the effects of the global financial crisis. — BC/VS, GMA News