The government reported a primary deficit of P2.3 billion in the first nine months of the year, lower compared to what was reported in August of P6.6 billion, data from the Bureau of the Treasury (BTr) showed.

The Department of Finance missed its primary balance program in the first three quarters ending in September of a P38.8-billion surplus. Last year also in September, the primary balance position was healthier at P181.3 billion.

Credit rating agencies monitor the country’s primary balance since it is an accurate indicator of the government’s capacity to pay the national debt, which as of July has reached P4.223 trillion.

For the month of September, the primary gap was bigger at P4.3 billion against the previous month’s P2.3 billion.

The primary deficit is reported along with the National Government budget deficit. It is revenues minus expenditures but excluding interest payments on government debt. By excluding net interest, finance officials said the primary balance is a more direct measure of state spending.

The government collected P839.8 billion in revenues as of September, 4.6 percent lower year-on-year and 74.4 percent off the program of P914.2 billion.

Government expenditures net of interest payments amounted to P1.07 trillion, up 15.4 percent compared to the same period in 2008 but it fell 54.4 percent from the target spending of P1.13 trillion for the January-September program.

Net of interest payments, expenditures totaled P842.1 billion in the first nine months. Interest payments amounted to P235.3 billion, which was lower than the program of P256.4 billion in the first three quarters.

For the month of September alone, revenues totaled P100.7 billion while expenditures net of interest payments reached P96.4 billion.

For 2009, the DOF has programmed a primary surplus of P63.6 billion based on a P250-billion budget deficit program.

The previous primary balance target was a surplus of P165.8 billion when the budget deficit program was lower at P199.2. The deficit program was revised last June.