The shortfall was 15.9 billion pesos ($370 million), the government said in an e-mailed statement in Manila today, compared with a previously reported deficit of 101.5 billion pesos for December. That is the smallest since a surplus reported in August. Spending rose 16.2 percent, compared with a previously reported 43.2 percent increase in December. Revenue dropped 7 percent, even as collection of taxes increased.
President Benigno Aquino is increasing spending to a record this year while seeking $16 billion of investment in rail and airports in an effort to create jobs and reduce poverty. The World Bank and the International Monetary Fund have forecast higher public spending and strong domestic demand will help boost growth to 4.2 percent in 2012 from 3.7 percent in 2011.
“We expect tax revenues to continue improving owing to administrative measures to further enhance compliance,” Christian de Guzman, a Singapore-based assistant vice president at Moody’s Investors Service, said before the data. Improvements in both revenue and expenditure performance will continue in 2012, he said, with public spending supporting economic growth.
The nation won credit-rating upgrades from Fitch Ratings and Moody’s last year after narrowing the budget gap to 2 percent of gross domestic product from 3.5 percent in 2010. The government forecasts the shortfall will be 279 billion pesos in 2012, or 2.6 percent of GDP, as it increases expenditure.
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