MANILA, JULY 23, 2010 (STAR) By Iris C. Gonzales - The Aquino administration vowed yesterday to contain this year’s budget deficit within the revised target of P325 billion despite inheriting from the previous administration a budget gap of P196.7 billion for the first six months of the year.

Finance Secretary Cesar Purisima gave this assurance yesterday as he said that the administration would not spend beyond the programmed disbursements unlike the previous administration’s overspending binge of P45 billion from January to June.

“What we’re seeing with these numbers is really the mismanagement of our budget…over-spending by P45 billion, I think is unconscionable,” Purisima told reporters yesterday.

The Bureau of the Treasury reported on Wednesday that the six-month budget deficit hit P196.7 billion or 28.2 percent more than the P153.4-billion budget deficit recorded in the same period last year.  

The six-month figure is P51.6 billion higher than the programmed ceiling of P145.2 billion for the period due mainly to higher-than-programmed spending.

National Treasurer Roberto Tan attributed the wider-than-expected deficit during the six-month period to the setbacks encountered by the government in the privatization of state-owned assets and to higher-than-programmed spending.

The Arroyo administration had planned to raise P30 billion from the sale of government-owned assets in the first half of the year but this did not happen because of poor market conditions and administrative concerns.

In June alone, the budget deficit hit P34.6 billion, or 14.5 percent more than the P30.2-billion deficit recorded in the same month last year.

Despite the record deficit incurred by the government in the first six months, Purisima assured that the Aquino administration would manage state coffers better.

“I’m confident that for the next six months, we will not do the same mistake on the expense part. We will stick as closely as possible to the budget,” he said.

The Finance chief said the government is already reviewing where the expenses went. Nonetheless, he conceded that shoring up revenues is a major challenge for the government.

“Nothing is easy. I believe that we’re more disciplined than the previous administration. We won’t exceed it (the P325 billion deficit) by that much. We can exceed it by one peso. I cannot be exact but it will be closed to the target as possible. It could be less,” he said.

The Aquino administration hopes to bring the tax effort to 15 percent of gross domestic product (GDP) in a year, an improvement from the previous government’s target to bring this to 13 percent of GDP.

The tax effort measures the government’s ability to increase tax collection that is commensurate with the growth of the economy.

In the first quarter of the year, the government’s tax effort improved to 12.3 percent of GDP from the 11.6 percent of GDP recorded in the same period in 2009.

Chief News Editor: Sol Jose Vanzi

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