The government's budget deficit is typically at its widest in the first quarter of the year. In 2011 the authorities expect to record a first-quarter deficit of P112bn (US$2.5bn), equivalent to more than one-third of the deficit target of P290bn for the year as a whole. But in January the government recorded a budget surplus of P13.4bn, owing to two factors: budget revenue rose by 47.3% year on year to P135.9bn, as the two main tax-raising agencies, the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), both registered strong revenue growth. The BIR exceeded its collection target for the month by P2.6bn, while the BOC was P200m above its collection target. These results are in part owing to higher oil and commodity prices, particularly in the case of the BOC, but a recent campaign against tax evasion may also be paying dividends. The most striking improvement on the revenue side was from a non-tax source, the Bureau of the Treasury-its revenue rose to P31bn from only P5.2bn in the year-earlier period owing to dividends paid by SOEs. A 5.3% year-on-year fall in government expenditure, to P122.5bn, also contributed to the budget surplus in January. This reflected the government's decision to bring forward to December some of the expenditure programmed for this year. This trend is therefore unlikely to have continued, particularly as in mid-March the government announced plans to raise total spending in 2011 by P10bn, to P1.71trn (US$38.6bn).

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