RP 2006 budget deficit at P62.2B, beats target
Manila (1 February) -- The Philippine government's budget deficit hit P62.2 billion as of end-2006, only roughly half of the P125 billion-target for the year, the Department of Finance said Thursday.
In a press briefing, Finance Secretary Margarito Teves said the figure represents 1.4 percent of the country's Gross Domestic Product, a significant improvement from the 2005 ratio of 2.7 percent.
Teves also said this year's deficit is the narrowest in seven years, since the country achieved a deficit of P50 billion in 1999.
For December alone, the government registered a budget deficit of P3.9 billion.
"Given this performance, we are on track to meeting our medium term targets. This brings us closer to a balanced budget," Teves said.
The government is programmed to achieve a balanced budget by 2008, two-years ahead of the original target.
"The reenacted budget was actually a blessing in disguise for us," Budget Management Secretary Rolando Andaya said.
In November, Teves, anticipating a budget overperformance, said the deficit was likely to land between P80-90 billion, short of the official target as spending was constricted by a reenacted budget. This estimate too was beaten by the actual figure.
For 2006, government revenue reached P978.7 billion, P4.6 billion above target. Finance data show that this is a 20 percent improvement from the country's 2005 revenue of P816.2 billion.
Due to limits from the reenacted budget, expenditures in the same period grew only 8.1 percent to P1.04 trillion, P58.1 billion lower than the programmed spending for the year.
Despite this, Andaya said the government had already spent 95 percent of the P46 billion supplemental budget.
Andaya said the supplemental budget was used to pay off veterans' benefits, soldiers' pensions and other administrative expenses.
He said infrastructure spending, which was not programmed in the supplemental budget, would come in in 2007.
Teves said the department would stick to its programmed P63-billion deficit for 2007, despite the 2006 deficit besting even the target for this year.
"In 2007, we expect a higher level of spending. So in the meantime, let's stick to P63 billion," Teves said.
"We're actually trying to spend more... We dont want to arrive at a hollow balanced budget. There are so many things to spend on before we reach a balanced budget," Andaya added.
Both the Budget Management departments and the National Economic Development Authority have earlier said they would prioritize infrastructure projects this year in line with the administration's construction-heavy super-regions program.
Meanwhile, a record 2.8 million tourists visited the Philippines last year, most of them from South Korea, the US and China, the Tourism Department reported Wednesday.
Tourist arrivals were up 8.4 percent from 2005, but fell short of the 3 million target for 2006, official figures showed.
The Philippines says it aims to attract 5 million visitors a year by 2010 to boost the economy.
Many of the visitors from South Korea come to the Philippines to learn the English language. (PIA-MMIO) [top]