The Philippine state budget deficit last year soared to a higher-than-expected 136.11 billion pesos (2.6 billion dollars) amid a shortfall in tax collections and lower privatization proceeds, a government report said Monday.
The report by the Bureau of Treasury said revenue was at 505.725 billion pesos against an expenditure of 641.835 billion pesos.
The government had targeted a 2000 revenue of 566.954 billion pesos and an expenditure of 629.454 billion pesos, which would have resulted in a budget deficit of 62.5 billion pesos.
According to the report, the main reason for the revenue shortfall was that the Bureau of Internal Revenues collected only 353.973 billion pesos, some 43.791 billion pesos less than its target for the year.
Another key factor, the Treasury bureau report said, was lower privatization proceeds -- 4.894 billion pesos against a target of 21.976 billion pesos.
A huge deficit is seen putting upward pressure on interest rates as the government looks to the domestic financial market for borrowings needed to finance the budget gap.
Socio-economic Planning Secretary Felipe Medalla had said that the government was targeting an interest rate ranging from 11 to 12 percent for this year, referring to the key 91-day Treasury bill which is the benchmark for the setting of bank lending rates.
Political uncertainties arising from President Joseph Estrada's corruption trial in the Senate are expected to put pressure on the country's economy this year, officials said.
Estrada, impeached by the House of Representatives in November, could be removed from office if found guilty by the Senate -- MANILA (AFP)
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