By Lailany P. Gomez Reporter
THE Arroyo administration’s budget deficit widened by 345 percent because of poor tax collections and weak imports, according to the Bureau of Treasury. In a briefing, the bureau said the September performance led the nine-month fiscal gap to jump to P237.5 billion from P53.4 billion in the same period last year.
With three months to go, the government is P12.5 billion shy of hitting its full-year deficit ceiling of P250 billion.
“We are really facing tough times. Our revenue collection efforts are seriously hampered by the slowdown in economic activities and tax breaks that were granted largely through legislation,” Finance Secretary Margarito Teves said at a press briefing.
He said the implementation of several revenue-eroding measures such as Republic Act 9504 and lower corporate income taxes may be blamed for the September funding shortfall.
R.A. 9504 increases the level of personal exemption allowance of each individual taxpayer to a uniform amount of P50,000 regardless of the status of the taxpayer. It also raises the additional exemption allowance for each qualified dependent from P8,000 to P25,000.
Excluding interest payments, expenditures at end-September picked up 15.4 percent to P1.08 trillion from last year’s P933.3 billion. Expenditures for September alone went up 15.2 percent to P125.2 billion from last year’s P111.3 billion.
Interest payments went up 0.2 percent to P235.3 billion from the previous year’s P234.7 billion.
Revenues for the third-quarter slipped 4.6 percent to P839.8 billion from last year’s P879.9 billion. In September alone, revenues reached P100.7 billion, or 12.3 percent higher than last year’s P89.6 billion.
The Bureau of Internal Revenue (BIR), which accounted for about 80 percent of tax revenues, collected P557 billion at end-September, or 5.2 percent lower than last year’s P587.9 billion, while the Bureau of
Customs generated P165.4 billion, or 14.4 percent lower than a year ago.
For September alone, the BIR’s P56.2-billion collection was 0.8 percent higher than last year’s P55.8 billion. Customs’ P18.3-billion collection, however, was 29.1 percent lower than last year’s P25.8 billion.
Preliminary data from the National Statistic Office showed that total external trade in goods in the first seven months of this year reached $44.922 billion, representing a 31.4-percent decline from $65.507 billion during the same period in 2008.
With the end-September fiscal figure accounting for 95 percent of the full-year program, Teves said, “We remain hopeful that we will be able to dispose of government assets before the end of the year that could help us generate additional revenues for our rehabilitation and reconstruction efforts.”
The Philippines raised an additional $1 billion in commercial borrowing abroad—its third global bond offering this year—for the rehabilitation of areas hard hit by typhoons Ondoy and Pepeng. First offered in January 2007, the reissued 25-year sovereign bonds—also called Republic of the Philippines debt papers (ROPs)—will mature in October 2034.
The notes were priced at 99.382 percent of their face value with a yield of 6.425 percent, or 216.5 basis points over benchmark US Treasuries.
Besides the global bonds, the government last month raised an additional P114-billion from the sale of retail Treasury bonds, the proceeds of which are meant to plug the budget deficit and accommodate the
government’s higher spending to keep the economy afloat.
The government borrows money through the sale of Treasury papers in the local market, as well as sovereign bonds in the international market, to make up for tax collection shortfalls.
The government was forced to resort to more borrowings this year after it raised its budget deficit ceiling from the previous P199.2 billion and partly for rehabilitation and reconstruction.
“We need to spend for the urgent needs of our people, especially for the relief and rehabilitation of calamity-stricken provinces. Millions of crops were damaged and a number of bridges were destroyed. We need the resources to rebuild and fortify our economy,” Teves said.
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