RP budget deficit soars to US$2.1b

RP budget deficit soars to US$2.1b

MANILA: The Philippines' budget deficit soared way above target to 107.5 billion pesos (US$2.1 billion) in the five months to May, the government said Wednesday, triggering a stock market selloff.

"Let me be frank. The deficit for the first five months of the year exceeded the programmed targets," Finance Secretary Jose Isidro Camacho told reporters.

The five-month deficit figure was way above the government's first-half target ceiling of 78.26 billion pesos.

The market swooned at the news due to fears that the deficit situation would drive up interest rates. The Philippine Stock Exchange composite index settled 46.43 points or 3.9 percent down to 1,143.68 points at midday after heavy morning trading.

Camacho said five-month revenues reached 223.84 billion pesos, while the government spent 331.38 billion pesos over the period. -- AFP