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Philippines Half-Year Fiscal Deficit Plunges

by Mary Swire, Tax-News.com, Hong Kong

04 August 2011


The Philippine government’s much-reduced deficit in the first half of the 2011 fiscal year was partly due to improved tax collection, but was also the result of a failure to achieve its spending budget.

The cumulative fiscal deficit during the period from January to June this year was PHP17.2bn (USD408.6bn), over 90% lower than the PHP196.7bn seen in the first half of the 2010 fiscal year. However, while revenue in the first half of 2011 reached PHP681.6bn (up 15% from the previous year), government expenditure fell way below its target to a level of PHP698.8bn, some 11.4% below spending in the same period of 2010.

In fact, despite its rise, the government’s total tax revenue fell marginally below its half-year target of PHP686.4bn, but that was still hailed as a strong performance given the tax authorities’ complete reliance on improvements in tax collection and administration.

It was added that the government, despite an expected upswing in government spending in the second half of the year, can now be expected to meet its budget deficit for the whole year of PHP300bn, or 3% of the country’s gross domestic product. That would show an improvement over the 3.5% deficit in 2010, and be well on the way to fulfil the government’s aim of reducing it to 2% by 2013.

TAGS: tax | economics | budget | Philippines | revenue statistics

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