Philippines budget deficit doubles year on year

The Philippines budget deficit in the three months to March more than doubled compared with last year, the government said Wednesday, as the economy is battered by slowing revenues.

Finance Secretary Margarito Teves said the 119.7 billion pesos (2.47 billion dollars) deficit was up from the 51.6 billion pesos 12 months ago and 8.72 percent higher than the target ceiling of 110.1 billion pesos for the quarter.

"This is largely due to lower revenues that were adversely affected by the slowdown in economic activity," he added.

Tax relief measures passed by the government to help boost spending also contributed to the bigger financing gap, Teves said.

The export-dependent Philippines has been rocked by the global economic downturn as demand in its key overseas markets dries up. Economic Planning Secretary Ralph Recto said Manila would ask donor nations and multilateral aid agencies to sustain or raise assistance levels to the Philippines to reduce the gap, which could further hamper business activity.

"Past experience shows that ODA (official development assistance) levels are easily affected by economic cycles, and since a number of economies appear to be near or at the bottom of that cycle, we are concerned that ODA from development partners such as Japan and Europe will become scarcer," he said.

Teves said total revenues for the three months to March fell 7.2 percent year on year to 235.4 billion pesos, which was 16.4 billion pesos short of the target. AFP