Press Release
July 5, 2007

Jinggoy alarmed over 'election month' budget deficit

Opposition stalwart Sen. Jinggoy Estrada has expressed alarm over the country's budget deficit, especially the bulk incurred in May, coinciding with the senatorial and local elections.

This developed after Finance Secretary Margarito Teves reported that the government incurred a P1.7-billion fiscal deficit in May, bringing the first five-month's deficit to P41.8 billion. The January-May deficit is just P21.2 billion shy from the programmed P63 billion ($1.37 billion) full year deficit for 2007 at 0.9 percent of gross domestic product.

Teves was quoted as saying the revenues in May totaled 94.1 billion pesos, against total expenditures of 95.8 billion pesos.

"What were these expenditures of the government during the election month of May? Did they include electoral campaign spending for some candidates? And why did we overspend, just basing on projected revenue collections that were later not realized?" Estrada asked.

The Finance chief attributed the first five-month deficit to increased expenditures and weaker-than-expected revenues especially in taxes such as capital gains, corporate income, insurance premiums and excise tax on tobacco.

Teves further said the government is now gearing for more revenues especially from privatization of state assets, including the sale of stakes in San Miguel Corp. estimated to be worth about $1.2 billion; in the PNOC-Energy Development Corp. for divestment of a 20 percent stake, and, possibly, in Manila Electric Co., said to be worth about $600 million.

"Are we reining on the budget as what the government has been telling us, or are we in fact losing control over our country's finances, and now we are selling all our government assets to the private sector?" Estada said.

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