Philippines budget deficit shoots up

The Philippines' budget deficit soared in May, the government said on Tuesday, but a senior economic official insisted there was still room to pursue higher spending to sustain economic growth. The government spent 19.90 billion pesos ($468.31 million) more than it earned in May, Finance Secretary Cesar Purisima said in a statement. He insisted the deficit was manageable, expressing confidence the full-year fund shortfall would stay within 2.6 percent of the gross domestic product (GDP), or 279 billion pesos. "We are pleased with the continued rise in revenue collections, especially since this allows us to pursue our spending programme for the year while making sure that our fiscal position remains under control," Purisima said. "The wide fiscal space will now give us an advantage to finance infrastructure projects and social programmes that shall in the long term curb poverty and promote equality." The January-May deficit reached 22.79 billion pesos, well within the government's self-imposed first-half ceiling of 109.34 billion pesos. The government said it spent 668.43 billion pesos in the first five months of the year, up 13.1 percent compared to the same period last year. Over the same period, revenues reached 645.64 billion pesos. For May, revenue grew 9.4 percent to 131.40 billion pesos, while spending reached 151.30 billion pesos. Purisima said the government remains committed to reaching its 5.0-6.0 percent growth target this year, having recorded 6.4 percent expansion in the first three months. The Philippines suffered a 197.8 billion-peso budget deficit last year, equivalent to 2.0 percent of GDP. Officials have said the government will step up its spending this year in order to spur growth.