Govt narrows budget deficit by 81% – Purisima

Government narrowed its budget deficit by four-fifths in the first seven months of 2011 on the back of stronger revenue collection and judicious spending, Finance Secretary Cesar Purisima said Thursday. For the first seven months, the government posted a budget deficit of P43.713 billion – 80.95 percent narrower than last year’s P229.423 billion, Purisima said. He said the deficit was also 77.1 percent narrower than the P191.2-billion programmed for the period. Explaining the strength of the government’s fiscal position, Purisima said its revenues grew by 13.47 percent, to P788.603 billion from P695.012 billion in the same comparable period. Disbursements, on the other hand, decreased by a tenth, to P832.316 billion from P924.435 billion. Revenue collections ‘on track’ Purisima noted that the revenue collection of the Bureau of Internal Revenue (BIR), which accounts for about 70 percent of state tax revenues, remains on track. BIR also posted a 13.8 percent increase in revenue collection, to P531.785 billion from P467.282 billion. BIR collections in the first seven months were short by merely 0.6 percent of its P534.91-billion target for the period. “The BIR’s monthly revenue collections continue to improve every month as evidenced by its July performance, when its take grew by 15.63 percent to P73.789 billion as against last year’s P63.813 billion," he said. He added that cash collections for the first seven months reached P518.482 billion, or 99.8% of its P519.6-billion target for the period. “I am pleased to note that latest reports show that the BIR continues to perform well in the collection of taxes where it has administrative control in view of the sustained campaign against tax evaders under its Run After Tax Evaders program," Purisima said. He said the cash collections by the Bureau of Customs (BOC) from January to July also continued to improve, posting an 11-percent gain year-on-year to P147.623 billion from P132.991 billion. Lower cash collections “For July alone, however, cash collections contracted by 3.29 percent to P21.103 billion. The same case was recorded for non-cash collections, which are mostly tax expenditure fund. This sector only collected P180 million last month as against the P418 million in the same period last year," Purisima said. He said total collections reached P21.283 billion in July, down 4.29 percent from last year and short of the bureau’s P28.440-billion target for the month. “Similarly, though cash collections significantly improved from January to July, this was not enough to offset the 88.9 percent contraction recorded in the non-cash sector," he said. During the period, BOC collections reached P149.840 billion, or 2.04 percent lower than the P152.960 billion collected last year. Of this, non-cash collections dropped to P2.217 billion from P19.969 billion. — PE/VS, GMA News