Statement of the Finance Secretary on the 2010 Full Year Fiscal Report

Statement of Finance Secretary Cesar V. Purisima:
On the 2010 Full Year Fiscal Report

[Released on March 7, 2011]

I am happy to report that the National Government capped the fiscal deficit in 2010 at P314.4 billion which is P10.6 billion lower than the full-year program of P325.00 billion. The full-year deficit is equivalent to 3.7 percent of GDP, better than the 3.9 percent program, and lower than the 3.9 percent incurred in 2009. The lower-than-program deficit was realized because of improved revenue collections in the second half of the year as well as prudent spending exercised by the Aquino Administration.

Total revenues for the past year reached P1.2 trillion, which is 7.5 percent higher year-on-year. Collections of the Bureau of Internal Revenues (BIR) and Bureau of Customs (BOC), on the other hand, grew 9.6 and 17.7 percent, respectively, to P822.6 billion and P259.2 billion. On BIR collections, it is worth noting that for the first half of 2010, revenues generated by the Bureau increased by about only 7.4 percent, while for the second half, collections grew by about 12.0 percent year-on-year. Collections in both agencies have benefitted from the vigorous implementation of the Run After Tax Evaders (RATE) and Run After The Smugglers (RATS) programs at the BIR and BOC respectively, as well as administrative reforms undertaken by Internal Revenue Commissioner Kim Jacinto-Henares and Customs Commissioner Angelito Alvarez.

Meanwhile, total expenditures, rose 7.1 percent to P1.5 trillion or P97.1 billion lower than the P1.6 trillion program.

Moving forward, the National Government will continue to work hard to improve increase revenue collections and enhance spending efficiency. We are confident that this year’s fiscal targets will be met. Aside from the administrative measures that we have put in place at the BIR and BOC, fiscal measures have been included in the President’s priority legislative agenda for the present Congress to help ensure long-term fiscal sustainability. These measures include the: (a) Deficit-Neutral Fiscal Responsibility Bill which seeks to establish deficit-neutral rules towards responsible financial management, and a burden sharing framework between the executive and legislative branches of government; (b) Fiscal Incentives Rationalization Bill which aims to remove redundant incentives to reduce the fiscal costs and ensure that incentives will be given only to those who need them; and (c) GOCCs Reform Bill which shall promote financial viability and fiscal discipline in GOCCs and strengthen the role of the State in its governance and management.