Recent developments in the economy of Uruguay

 No. E 103a RESTRICTED 67012 This report is restricted to use within the Bank. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT RECENT DEVELOPMENTS IN THE ECONOMY OF URUGUAY August 16. 1950 Economic Department Prepared by: Cynthia Sokobin  RECENT DEVELOPMmrS IN THE ECOnOMY OF URUGUAY Sm~TARY Only one important change affects the economy since the Inst report (circulatod as No. E 27/49a of February 18, 1949 to the Board of Exeoutive Directors) namely, the fact that the market for wool has improved during the last year, eliminating certain reservations previously held as to trade outlook. Inflationary elements have been controlled to large extent, import pressures are normal and import supply situation is satisfactory, harvests of domestically consumed crops have been good, most exports have shown improvement during the last two years, labor demands have been settled pacifically, and the political situation, despite approaching elections, is not explosive. Two somev;hat adverse elements may be noted, however: . (1) domestic financial 5i tuation of the Goverrnnent has deteriorated slightly, ar.d (2) strikes in the meat industry alternating vdth suspension of operations by the packers in protest of a long over-due subsidy have reduced operations by the large companies to a virtual minimum since rTarcho TRADE Although no data have yet been received with respect to trade after the first two months of 1950, full year figures for 1949 and market outlook forecast export improvement {which is, however, largely dependent on wool) and indicate increased imports from non-dollar sources. '(Tables 1, 2, and 3) Uruguay achieved a surplus on trade account in 1949 in contrast to deficits in 1947 and 1948. Exports in 1949 Vfere US:;~ 200.6 mi11ion, including US::? 8.6 million for prepaid meat under the contract '!Jith the United Kingdom,  - 2 - and imports were US~s 184.6 million, resulting in a surplus of US:~~ 3.6.0 million. The geographical pattern of trade during 1949 Sh~NS increaseG depend- ence on European sources of supply for imP01'tS. The trend was strongly notice- able during the first nine months but was reversed unexpectedly, though pro- bably only for a short period, after the wave of E.uropean cevaluations. revival of wool exports to the United states in the second half of the year presumably provided dollar exchanbe v:hich was eagerly taken for increased dollar imports despite the reduced cost of imports from countries which }lad devalued. Howevel', a policy of encouraging imports from non-dollar sources still followed by the exchange control authorities, with the result tl1at E.uropean sources nO"!1 predominate almost exclusively for automotive sUP2lies (constituting some 15-18% of total imports) and in many other categories. Exports of most major cOll'lJTIodities (wool, meat, hides and skins) showed slight improvement in 1949 over 1948. Linseed and linseed p:.:'oducts, however, are lagging behind, although exporters of these products have the benefit of a devalued rate and authorization for certain barter or compensation transactions. - Hool exports during the first half of 1949 ",ere stagnant and the ~ increase in total eX''ports Vias achieved only in the second half of the year, as a result of revival of the US market which consumes some 65% of' the Uruguayan product. Prices through 1950 todate have been maintained high and have recently risen again. An annual average of 80 million pounds actual weight is estimated for US imports of Uruguayan yrool for the period 1950-54, 1/ compared with 67.4 million pounds in 1949 and 102.2 in 19487 A strike of warehousemen and other 1'1001 workers from February 8 to April 27, 1950 had little effect on sales of the 1949-50 production as most of the clip was already u...'1der contract. By the end of Tray, 1950, a carry-over of 37 million lIRevision of Conclusions as to the United States 'Tarket Prospects for Uruguayan rJool 1950-59", IBRD, Economic Dept. June 30, 1949.  - 3 - pounds from previous seasons and 85% of the 19h9-50 clip, estimated at 143 million pounds,had been sold. Although drought conditions during the second half of 19h9 resulted in weakened cattle and emergency slaughter, weather improved durj.ng the first few months of 1950 and herds were reported exceptionally large by tDe end of l1ay. Market outlook for meat is fair largely because trade agreements assure disposal but the picture is shadowed by the drop in US prices for corned "beef. Internal business conditions in the packing industry may also present serious adverse prospects at least for the current year. ~ exporters have for sowe years protested payment of a substantial subsidy to the quasi-offidal Frigorifico Nacional, which has a government-protected share of the domestic market. Prices packers must pay to cattle raisers are fixed, and packers other than Frigorifico Nacional did not receive the subsidy payment Que in December 1949 until June 1950. A packing house strike in early l:ay 1950 '.ms settled by granting strikers a 30(~ wage rise, precipitating virtual cessation of operations by the three largest foreign-owned companies. l~nother strike began on July 16, 1950. As a result of rising costs and inadequate peso return under the United Kingdom meat ccntract (see belovr), the industry clabled it would lose 30 million pesos in 1950. In July, 1950, the Government agreed to study the possibility of financing wage increases out of fiscal revenue; however , its answer to the problem so far has been an nttenpt to reorient meat exports to markets in which prices are free, rather than under fixed price contract. The United Kingdom" the United States and Belgium have each ta 1cen approximately 18-20% of Uruguayan meat exports in the past two years; under the German trade agreement finalized in 1949, provision was made for annual exports of meat to Germany during the next tvlO years of US::? 20 million or 40% of Uruguayan meat exports in 1949.  --4 . ·- Prospects for other exports are less encouraging. Hides prices have recently fallen. TRADE AGREEI'lliNTS The Ninth United Kingdom r'leat Contract negotiated in November, 194::>, provided for pa;yment at the rate of Ps~~ 6.12 to the pound sterling through December 31, 1949. This was in effect the pre-devaluation dollar cross rate for the pound and postponed the impact of the ~ devaluation. An increase of 63% in prices quoted in sterling was provided effective January 18th" 1950; however, a ruling effective January 17, 1950, of Uruguayan exchange Buthorit:i.es provided for a peso return to the meat exporter at the post-devaluation dol:!.ar cross rate for the pound, 1. e. offsetting the 63;; price rise by a curl~ency devaluation. Peso return to the neat exporter, thus, is now only 12~~ than under the Eighth Contract. Prices were to be revised again at end June 1950, but no indication of such revision has been received. Other agreements finalized in 1949 and early 1950 were v.ri th Sweden (September)) the United states (November), Finland and Brazil (December) and Yugoslavia (January 1950). Details are not available; however, the agreement.s with Finland and Yugoslavia appear to provide for settlement of balances in dollars. The German agreement alone provides for barter amounting to half the value of total exports from Uruguay in 1948. BALANCE OF PAYHENTS A deficit in 1948 of US~p 10 million was substantially due to a deficit in trade. (Table 4). In 1949 the balance of payments deficit (i.e. the decrease in gold and foreign exchange reserves as repcrt:x.l by tIL B:mco ric Republica reached US~? 25 million. A trade sUl'plus of US(,; 16 million was offset by the utilization of the equivalent of US~; 51.4 million of blocked sterling balances  - .5 - for purchase of Bri tish ... ovmed railways (US;~ 43 million) and water-works (US0 8.4 million). Uruguay's other usually strong positive items, foreign travel (tourism) and private capital movement (largely flight capital), have both seriously diminished during the last two years as a result of exchange restrictions in Argentina, although a flight to the Uruguayan peso is said to have resulted from the announcement by the Argentine Goverrunent in September, 1949 of abrogation of the gold backing of the Argentine peso. Net movemen t of gold and foreign exch8.nge holdings, the latter includ- irrg blocked sterling balances, was as follows: ------------- (million dollars) J"Iovement December December durJ.ng 3~, 1948 31, 19L-9 1949 Gold ..................... 164 178 + Ib Foreign exchange ......... 77 38 - 39 ------------------------------------- Total ............. 241 216 25 Knov!U expondi tures of blocked ateTling amounting to us~~ 51.4 equival- ent suggest that total of other exchange holdings (including non-blocked sterling) increased by 12.4 millions in order to achieve a net fiGure of -39 for movement of foreign exchange holdings. The following details of holdings at January 29, 1950, may be of interest: (million dollaTs) Gold ••..•.••..•.•.•... , •. ., 4 ••••• 183.11 US dollars •.••••••.•••.•••••.••• 1.36 'sterling •••••••••••••••••••••• 15.07 , sterling blocked •••••••••••••• 19.65 Others •••••..••.•..••...•••••..• 13.52 Total .......... .... .. ,. , 232.71  -6- EXCHANGE CONTROL Devaluation of the Uruguayan peso was undertaken on October 6, 1949, vdth the concurrence of the IHF. I~o par value has yet been declared (none existed at the time of devaluation). Bu:rring rates vary from 1.52 (~}re-deyal­ uation rate for all exports, now applying for unprocessed wool, meat, linseed and wheat), to 2.74 for non-trade remittances (average free market rate for 'Hay, 1950). Selling rates spread between 1.52 (Government transactions s:'lch 8.S debt service and printing supplies imports) to 2.75 for non-trade remittances. Devaluation averaged 7%. EXTER?JAL DEBT Outsta,nding dollar debt in Hay 1950 is re?orted at h4.S millio:1, while sterling debt was 47.6 million (dollar equivalent). At end 1?49 reduction in total of these debts since December 31, 1948, was 1" 9 mElion. Reduction of amounts outstanding of r;:xport-Ilnport Bank and US l'[a:r-i time Com- mission loans is also proceeding gradually. J:. t June 30, 1950, total ExiITl credit of US~ 13.7 million remained outstanding out of total authorized credit of US$ 14.5 million, which has been wholly drawn down. INTERNAL FINANCIAL CONDITIOnS 1. Fiscal position: A. Budget Under the Uruguayan constitution a budget may be indefinite:i..y pro- longed 'with annual tramendmentsll, apparently also in effect indefinitely_ Thus no new budget has been passed since 19L.5, al tl:ough both rovenues and eXDcmdi tures have approximately doubled. CI'able 6) In 1949.. revenues were 289.9 million  - 7- 1/ pesos, while expenditures were 288.8 million pesos~ leaving a surplus of only 1.1 million in contraf$t to a surplus of 12 million in 1948. The clmulative increase of 112 million pesos in authorized annual Government expenditures since 1945 (of vrhich 70% is for personnel expendit.ures) has been accompanied by a decline in domestic quotations for Government securi- ties, suggesting saturation of the private market for Government bonds. The need for a reorganization of finances has thus been emphasized. A budget bill for a total of 272~2 million pesos was unsuccessfully preserited in larch 191.;.9 to the Cor:gress for the fiscal year 1949-50; during the past :rear the Govern- ment has as usual operated on essentially the 19h5 budget with lIamendments!l or fladditionstl. A budget for 1950-51 has again been submitted but h2.S not. yet passed. ~'inar:cing of the increase in expenditures has recently basel reiClforced by several new taxes, including a modified income ta:~, a new one pe::.~ c tax on exchange transactions, wider application of the corporate inco:t:".e tax. (see l!evelopment Finance below)" etc. During the 1949 fiscal year, incone from these new sources was estimated at 27 million pesos. B. Government internal borrow'ing An increase in both funded and unfunded debt appeared in 1949. Gross increase in internal funded debt during 1949 '!,faS 73.1 million pesos" comparing as fol1m~rs 'V,d th 19h8: 1/ Mensaje del Poder :Cjecutivo a la Asamblea Gen6ral a:'_ Inm:i.t;urarse 4° Periodo de la XXXV Legislatura, :rarch 1950, page III/B3. Apparently does not include some revenues; probably those collected in the IIccmplementary!! or grace period durine the first fey!' months of 1950, because total of monthly statE:ments of 11 principal revenues" is 296.2 lliillion pesos, See table 5.  - 8 - (Billion Pesos) Internal Debt Issues ThJxing 1948 and 1949 1948 1949 Public vlorks •.•.•••••••• e • • • • • • • • • . 16.9 0 •••••••• 36.9 Capital for autonomous fiscal entities (Frigorifico Nacional and SOyp) ••••••••••• 25.9 906 Financing for extraordinary expenditures ••• 25~9 2606 --~~------------ Total •••••••••••••••••••••••••••••• 68.7 73.1 .----- .- - Domestic credits of the Banco de 1a Republica to the Government and official entities increased from 206~2 million pesos at the end of 1948 to 278.8 million at end 1949, an increase of 72.6 million in comparison with an increase of only 58.6 during 1948 and 62.6 in 19L~ 7. Of the increas e during 191-\9, borrowinG by the Government proper was 47.5 million pesos, while Governll1ent entities I borrowing decreased from 45.6 million pesos in 1948 to 25.1 million pesos in 1949. Government bond quotations have fallen steadily for several years, generally interpreted as a long-term trend. Average for National Govel'!1~'TIent securities quoted on the Ilontevideo stock ~xchange was 90.2 in 1949, agcdnst 96.1 in 1()48. Hunicipals declined from 95.5 in 1948 to 88.7 in 1949. C. D€velo~ment Policy and Finance_ Fiscal subvention of wheat, bread, milk and subsidies in connection with meat are granted from budget revenues (except the Frigorifico Nacional subsidy, which is financed by bond issue). In line with a policy of fiscal assistance to lower costs and increase production until a satisfactory market adjustment of supply and prices can be achieved, subsidies are regarded as temporary expedients. Funds allocated in 1949 vrere as follows:  -9- (l':Iillion Pesos) Ylhea t price support ._. e·.·••.• ••••••••••••• -0 2$,,0 Bilk price support •••••.•••• _0 • • • • • • • • • • • • • 11.• 2 Bread price support .• _ •• t; • • • • • • . • • • • . . . _t • • • • -. .8 Hides - exchange differential for export. .3 l1eat and livestock development .............. 10.3 plus other unknown amounts. Funds are derived for subsidies from exchange differential profits of the Government. A nevv source ot development funds has been provided for calendar year 1950 and subsequently through revision of excess profits tax, which during 1949 applied to profits in excess of an amount equivalent to 12% of capital, now applied to the excess over 10% of capital, under condition that the increase of funds so obtained be applied to technical studies for develop- mente FinIs paying the tax may draw from the tax deposits in the Banco de la Republica for the specified purposes. Administration of development finance has also been facilitated by establishment of a Department of Rural and Indust;l'ial Credit with special credit authorization in the Banco de la Republica. Financial assistance from IBRD has been requested for major development plans, i.e., electric power, rail transport, the development of the Port of IIontevideo and of some important privately owned industries. Consummation of such plans presages continued high rate of Government expenditures. 2. Money Supply and Bank Financ!: Record money supply was reached in March, 19$0 ai 614.6 million pesos, and has since stayed close to 600 million pesos. OVer the year 1949, note issue was the more rapidly increasing factor in money supply and further e)~ansion is lil{ely as almost certain approval was expected in ]' lay, 1950 of a bill ci Substantially expanding issue powers of the Banco de la Republica. It is ap- parent that the increasing rate of spending by the Govermnent proper is the chief stimulus to monetary expansion, Borrowing by the Government in 1949 from the  - 10 - Banco de 1a Republica accounted for over 50% of the total increase in bank credit outstanding, both of the Banco de la Republica and of commercial banl~s. Borrowing by fiscal entities decreased and there was virtually no change in amount outstanding to the public at end year 1949 in compar~son w~th end year 1948. Con:mercial bank credit to all borrowers increased only 16 million pe::;os during 1949. The increase in central Government floating debt accompani€d by a decrease in borrowing by government entities is a departure from practice of pl'evious years. 3. cost , of living: The Uruguayan cost of living index, based on 1937, shows less than 100% increase to date, a remarkable achievement in comparison ~~th many other Latin American cow'1tries. A high degree of stabi15.ty is shovm during 1947-1949; for the three years annual averages 'it\rere 177, 180 and 189 respecti'"i!ely. 1\ of 12 points occurred during the month of September 1949 alone, attributable to good crops and downward revision of controlled prices. few wage and salary increases were permitted, and il!lport supply and import costs improved due to the increase of European goods on the Uruguayan market. l/hether stability can be maintained in 19 $0 after wage rises in important industries anG. with continued high rate of Government spending, remains to be seen. POLITICAL SITUATION: Presidential and Congressional elections are scheduled. for NovE;..l'Jlber, 1950. Uruguay has essentially a t,rm-party system v;Jith many intra-party factions. Luis Batlle Berres, at present president and member of the Colora.do or Liberal party, will not run; candidates of his party are the current vice- president, and the 'president of the Central Bank. The opposition party is knovrrl as Blanco or Conservative, and its principal faction is under the leadership of Luis Herrera, presidential candidate.  LIST OF TABLES Table 1 • ••• f ••••••••••••• Direction of Trade '(Value). 2 •••• 4 ••••••••••••• Direction of Trade (Per cent of Total). 3 •••••••••••••••••• Trade by Commodity (Value in Per cent). 4 • • • t_ • • • • • • • • • ., • • • ., Balance of Payments. 5 ·................ . Principal Treasury Receipts. 6 ·................ . National Budget.  TABLE 1 URUGUAY DIRECTION OF TRADE (in millions of dollars) 1948 1949- Exports Imports - Balance L1Uport~ Exports' .E[a:a'nce United States ............... 67.5 -.- 50 .. 9 - 16.5 -- 39.5 50.3 _.--.,..-- + 10.8 Latin America ............. 56.8 21.9 - 35.1 45.1 25.1 - 20.0 Of which Argentina ....... (16.6 ) Of which Brazil .•...•.... (19.6) ( 4.1) (10.0) (- 12.5) 9.6) ( 2.2) ( 7.6) (+ 5.5) (- (19.7) (13.7) (- 5.9) United Kingdom (includes unshipped meat) ........... 25.3 ':33.6 + 8.4 42.6 51.3 + 8.7 Europe (continental) ...... 37.2 66.4 + 29.2 45.2 63.8 + 18 .• 6 Of which Germany •••••••• ( .5) ( 4.1) (+ 3.6) ( 1.2) (20.5 ) (+ 19.3) Other ...... ........ ...... - ~ 14.7 7.2 - 7.5 12.2 10.1 - 2.1 V:orld (includes unshipped meat) •••••••••••••••••••• 201.5 180.0 - --.....;;..................,..---- 21.5 184.6 200.6 + 16.0 Exports include meat not yet shipped at end of year under agreements vlith the U.K. Such commitments were US::;; 1 million at end 1948 and ust~ 9 million at end 1949. Excluding these commitments trade figures appear as foll(1'i's: Year Imports Exports Balance 1948 201.5 179.0 - 22.5 1949 184.6 191.7 + 7.1  TABLE 2 URUGUAY DlRECTIOE or THAJ:lli (in per cent of total) ---------------------- 1948 _ 12112---__ _ IMJ2Qrt.G. United States • • • • ·• • 33.5 28.5 21.4 26.3 La tin America • • • • • • · 28~2 12.2 13.1 United Kinr:dom (does not include unshipped meat) • 12.6 18.2 23.1 22.1 Je (.~o:atiner. ta 1) Eurc1 ~ 0 • . 18.5 3'7Q1 other • . • • • . • .• • ' .. 7 .. 2- 4 .. 0 12.7 5.2 hOFLD (does not include unshipped meat) • • • · 0 2~Q ,() . I()O·L_ -..100 .. 0 JOO.O- 1WY • • • • • • • • • • GERl' 1 .2 2~3 1.0 10.7 ARG:CNTIHA • • • • . • • • . 8.2 1.2 4~O BRAZIL • • • • • • • ·• •• 9.7 5.6 10.7 702  'l'AJL:E 3 U1~UGUAY a) Value in millions of dollars b) Percentage of total Value Percentage Value Percentage .::::---- \,1001 (rai'f) Meat and products Hides and. skins Linseed and products ~'lhep,t and ,.rheat flour Other IMPORTS: l!'ood and I i ve animaJ.s 2L~.6 12 20.7 II Fuel 20.4 Ie 2:;.4 12 Ra'" m~.teriels 52.0 26 .0 25 1'L?chinery, vehicles, metal rn~nu- fact1;.res 58.8 29 49.6 26 Other 4~~ ______~___________ ,~~~______~~~__-___ -__ TOTAL HtFQi,TS  URUGUAY BAL~~CE O~NTS -------------------------------.----- ____ +948 ---------------- ---,_._-_._- ~ Exports (f.o.b.) Imports (c.i.f.) · ·.................... . ................... . f. 195.5 .;. ;210.6 Trade Balance ·................... . 214.4 - 18 e 9 - 193.8 16.8 INVISIBLES (net) Foreign travel •••••••••••• " ••• 0 . . . . . .. f. 14.5 3.0 Investment Income ••••••••••••••.••••• 6.0 7.0 Otrer • ~ .... ,. ....•.'.................. .. .4 1.0 Invisibles balances Q •••••••••••••• f. 8.1 3.0 Amortization ••••••••••••••••••••••••• ~ 2.0 2.0 Meat credit (prepayment under UK contract) .J. / 9.0 Purchase of British raiJrc-ads ., •••••. 43.0 Purchase of Montevideo \>;8. t:rrworks •• ,. 8.4 Disbursements under Exim ~oa'1s ••••••• 1.3 t .4 Net private capital flov (estim3.ted) •• Donations (private) ••••..........••.•• 5.0 1.1 t 5.0 1.0 Balance on non-compensatory capital movements ••••••••••••••••••••••• f. 3.2 - 40 0 0 ERRORS AND OMISSIONS .................. 2.4 3.2 Total Deficit •.••••••••••••••• - 10,,0 25.0 ---=-====,~.==.=~-~-:::!~==== - , - - .. OFFI~-E1NANCING OE TOTAL DEFICIT: Change in gold and foreign exchcmge holdings of the Central Bank, other than blocked pounds •••••••••••••• 00 • .;. 10.0 Utilization of blocked pounds for purchase of British raihrays and Hontevideo Vaterworks •••.••••••.••• .J. 51.4 Total ........................... 10.0 25.0 (continued)  tABLE 4 (cont~l)uedl -- NOTES Exports include smuggling, estimated at approximately 10%. Imports include smuggling, estimated at approximatelY 5%. Forei.gn travel is estimated to have fallen even further since the disastrous 1948 season, as a result of Argentine restr!ctions. Investment income includes largely government interest paYinents: in 1949, US$ 4.7 million. amortization includes government amortization only. Meat prepayment represents the value of meat not yet shipped at end of year but cow~itted under the 1949 UK - Uruguay agreement. Purchase of British railroads represents use of sterling balances as agreed in 1948 but effected in 1949. Purchase of MontEvideo l,Tatert..rorks vas the subject of an agreellent concluded in December 1948; it is assumed the payment of ;, :3 million out of blocked sterling 'Qalances vIaS eff'ected at the end of 1949 after ratificaUon by the Uruguayan Congress in October, i.e. after devaluation. Net private capital flow in 1949 is estimated to be slightly larger than in 1948 because announcement of abrogation of gold, bacldng of' Argentine national currency in September 19/+9 is reported to have brought on a flight to the Uruguayan peso. Capite.l £,101.1 in 1948 and 1949 is considerably les8 than in previous years, largely because of Argentine exchange restrictions.  TABLE 5 URUGUAY Princina1 Treasury Receints (Accruing. to Genor::t1 Funds and Snccif!ll..llocl3tionsl (in millio~s of ~esos) 1948 1949 195 0 Genoral Allocated General A11oc~ted J gJj. - AJ;l:dl Gencrr.l Alloc8.ted - Customs 42.0 9.0 36.6 5.7 13. 8 --- ~ 0 _L .0 Direct taxes 78.6 85.6 28.8 Internal taxes 28.4 14.7 44·5 18.2 12.0 3.8 Postal revenue 3.5 3·5 1.1 E:xch~.m{,~e profi ts 41.2 45.9 16.9 Excess profits 37.1 40.1 II.) Telecor.;munications 2.0 2.4 .7 o 0 Lottery 11.5 u.u 2.9 Tax on gambling 2. 0 Ii 4.2 L6 Total 251.3 23.7 272.) 2,J.9 89.0 5.6 Totd receipts 275. 0 296.2 94.6 11 Estimated  TABIE 2. URUGUAY NATIONAL BUDGll;T (in million of pesos) Principal Revenue 2/ Payments by BUdget1l Receipt by Treasury Treasury Balance ------------------.-~""> --- 1944 133.4 101.1 145.6 -44.5 1945 143.5 130 .. 2 l70~4 -40.2 1946 167.4 183.8 206.9 -2.3.1 1947 190.1 240.8 231.8 t 9.0 1948 231.5 275.7 263.3 ,L12.4 1949 255.5 296.2 2/ 288.8 .;. 7.42.1 1950 (Jan-Apr. ) n.a. 94.6 89~1 f 5.5 ----- 11 Since 1945 no budget has been formally approved by the Congr'3ss. Government administration has simply been carried on as a prolongaUon of the 1945 budget, with the addition of new revenues and expenditures specifically voted from time to time. y Estimated to equal 95% of total revenue receipts. Comprises customs, income (lldirectll) taxes, internal (tlexcise ll ) taxes,. excess profits tax, postal and telccormnunication revenue, exchange profits, national lottery r8ccipts and ta"'{es on gambling (Ilquinielas ll ) . J/ Source: Monthly receipts of principal revenues publishc;d by the Hinisterio de Hacienda in its Informativo~ Difference of 6.2 million this and figure of 289.6 million peso published by the same ag~ncy for total budget revenue (see page 6 ) is unexplained. It appears that some o~ the Inte tax returr::5, i.e., receipts during tho "period a complementerio ll , or fjrst months of each succeeding tax year, were not fully included in the statcl1ent of budget ravenue. Thus the budget surplus, officially r,')portE:d at 1.1 million pesos for 1949, appears in the above tp.ble as 7.4 million pr'sas. The fiscal surplus for January-April, 1950 shows improvement, but a projection of full year figures on the basis of th3 first four months of th; y<:;F1,r is not likely to be valid.