The government turned in a narrower deficit of P9.4 billion in 2007 than the programmed P63 billion due to higher asset sales and lower interest payments Finance secretary Margarito Teves said yesterday.

The shortfall was the smallest since the government began incurring deficit in 1998 and was 0.1 percent of gross domestic product compared to the 0.9-percent target. It also fell from the P64.8 billion posted in 2006.

The government however was not able to balance the budget a year earlier than programmed. Last December, the government was confident enough to declare that it may be able to balance the budget for 2007.

"The better than expected fiscal performance was achieved largely because the government surpassed the revenue program by P15.9 billion and expenditures were P37.7 billion below target," Teves told a briefing.

Total revenues for the year amounted to P1.13 trillion, P15.9 billion more than the P1.1-trillion program. It was also higher by 15.8 percent from the year earlier.

The Bureau of Internal Revenues chalked in P711.6 billion, P54.3 billion below target but nine percent more than in 2006.

The Bureau of Customs turned in P210.5 billion, P17.7 billion below program but 6.2 percent above the 2006 figure.

Revenues from other offices amounted to P144.7 billion, P73.5 billion more than the P71.2-billion program and 166.5 percent higher than a year ago. Proceeds from sale of state assets amounting to P90.6 billion accounted for the bulk of revenues.

Expenditures for the year totaled P1.14 trillion, P37.7 billion below the P1.18-trillion program on savings from interest payments.

Teves said lower interest rates allowed the government to trim interest payments for the year by P36.5 billion to P266.8 billion from the P303.3-billion program.

In December, Teves said the government incurred a deficit of P22 billion, higher than the P7.9-billion program and exceeding by 240 percent the previous year’s P6.5-billion shortfall.

Expenditures amounted to P112.4 billion, 8.4 percent more than in 2006 and exceeding the P99.6-billion program as the government accelerated infrastructure and social services spending during the month.

"We could have balanced the budget if not for the additional spending," Teves said.

Revenues for the month totaled P90.3 billion, more than seven percent lower than P97.2 billion from a year ago.

The BIR and BOC came up with collections of P63.9 billion and P18.5 billion, 8.9 percent and 7.9 percent higher than a year ago but below the P64.9-billion and P21.2-billion targets for the month, respectively.

The government is closing the gap in the budget this year. It aims to collect P1.236 trillion in revenues, 11 percent more than last year.

"Through the BIR and the BOC’s intensified development and more effective implementation of their action plans, we expect further improvements in their tax collection efforts that we have seen gradually taking place in the second half of last year," Teves said.

"We are hopeful we will hit our revenue target for 2008 to fully finance the P1.2-trillion budget to sustain high economic growth and maintain fiscal discipline," Teves said.