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MANILA: Weak revenues caused the Philippines to exceed its full-year budget deficit target after just 10 months, the government said Wednesday.
Spending outstripped revenues by 28.5 billion pesos (US$610 million) in October, bringing the 10-month budget gap to 266.1 billion pesos, the finance department said.
"We realise that we have already breached our full-year deficit ceiling of 250 billion pesos as of end-October," Finance Secretary Margarito Teves said in a statement.
"(This was) due largely to weak revenue collection, which was adversely affected by the (global) economic slowdown."
Manila had counted on heavy spending in the first half to help revive the economy after a collapse in its exports sector.
However storms in late September and early October that devastated Manila and other parts of the main island of Luzon, killing more than 1,100 people, also took a heavy economic toll.
October revenues fell 7.6 per cent from a year earlier to 85.6 billion pesos as import duties plunged 25.8 per cent to 18.5 billion pesos, Teves said.
This brought 10-month revenues to 925.4 billion pesos, down 4.8 per cent from the previous year.
Expenditures for the month rose 12.3 per cent from the year-earlier level to 114.1 billion pesos, bringing spending levels for the first 10 months to 1.19 trillion pesos, up 15.1 per cent compared with last year.
Goldman Sachs said in a report that it expects state spending to remain high for the rest of the year, partly due to reconstruction costs, and that the full-year deficit could reach 306 billion pesos, or 4.0 per cent of GDP, unless Manila sells some assets or taps the global bond markets.
- AFP/yb
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