Posted on 06 Sep 2010
Government expenditures in August may have declined in August compared to its spending in July as part of effort to cut costs and fix the country’s fragile fiscal position.
Budget Secretary Florencio Abad, citing preliminary data, said the National Government likely brought down its expenditures during the month of August as against July.
“If July is any indication, it’s (spending) lower in August,” he said.
The programmed expenditure for July was P143.6 billion but the government spent only P135.6 billion or a saving of at least five percent.
Abad said this was likely that in August, the government has brought this further down.
“This is realistic insofar as the government cut down on the unnecessary expenses like procurement of brand new vehicles, seminars and trainings and junkets.”
The Department of Budget and Management has already announced cost-cutting measures such as no acquisition of new motor vehicles for government offices and no creation of new positions except in the education and health sectors.
However, despite an expected decline in expenditures, there is no guarantee that the government’s fiscal position would show an improvement from the P32.7 billion budget deficit recorded in July.
The government July deficit was 5.6 percent lower than the P34.6 billion funding gap in the same period last year.
Latest data from the Finance department showed that revenues as of end-July expanded by 7.9 percent to P695 billion against the P644.1 billion in same period last year.
The budget gap in July widened the deficit to P229.4 billion as of end-July or 22 percent higher than the P188 billion recorded a year ago.
The budget gap in the first seven months this year was already 70.6 percent of government’s P325 billion ceiling for this year.
The Aquino administration has earlier raised this year’s deficit ceiling to P325 billion, or 3.9 percent of the country’s gross domestic product (GDP), from the earlier Arroyo-programmed P293 billion.
