Budget deficit narrows to P49.3B
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Mon, 25 Nov 2019 17:15:54 +0000
THE government’s budget gap narrowed in October as revenue grew faster than state spending, the Bureau of the Treasury (BTr) reported on Monday.
In a statement, the Treasury bureau said October’s P49.3-billion shortfall was lower than the deficit of P178.6 billion in September and P59.9 billion a year ago.
Government revenues accelerated by 5.99 percent to P261.6 billion in October from the year-earlier P246.8 billion, while expenditures grew by 1.37 percent to P310.8 billion from P306.6 billion in the same month last year.
A month earlier, revenues rose by 16.89 percent and expenditures increased by 39.01 percent.
October’s budget gap dragged the year-to-date deficit to P348.3 billion, 20.51-percent smaller than the P438.1 billion posted in the first 10 months of 2018.
For September alone, the Bureau of Internal Revenue accounted for the bulk of revenues with P178.1 billion, an 8.09-percent growth from P164.8 billion a year earlier. The growth was slower than September’s 15.24 percent.
The Bureau of Customs netted P57.7 billion, 3.04-percent higher from last year’s P56 billion.
Meanwhile, other offices contributed P1.7 billion, bringing total tax revenues for the month to P237.5 billion.
Tax-revenue growth was slower at 6.78 percent in October than 15.15 percent a month earlier.
Non-tax earnings totalled P24.1 billion, with the Treasury contributing P10.6 billion — up 26.77 percent — “fueled by higher income from NG (national government) deposits, NG share from Pagcor (Philippine Amusement and Gaming Corp.) income and dividends on NG shares of stocks,” the Treasury bureau said.
The bulk of government spending — P290.1 billion — was for primary expenditures, which rose by 2.65 percent from P282.6 billion a year ago.
Interest payments (IP) of P20.7 billion, on the other hand, accounted for the rest of state spending. It dropped by 13.70 percent year-on-year “primarily due to a high base effect from October 2018 IP as well as the premium from the re-issued bonds series.”
Netting out interest payments, the primary balance hit a deficit of P28.5 billion in October, bringing the year-to-date tally to a shortfall of P33.8 billion.
Commenting on the latest data, analysts from ING Bank Manila and Security Bank Corp. provided contradicting view on the government spending performance.
“We expect government spending to sustain the same strong pace to close out the year, which should translate to higher spending growth in both November and December given that government spending was in contraction by end 2018,” ING Bank senior economist Nicholas Antonio Mapa said.
He added that state spending coupled with revived capital formation after interest rate cuts by the central bank, and robust consumption supported by low inflation and the impact of the Southeast Asian Games will likely be enough to get the Philippine economy past the 6-percent growth rate this year.
For his part, Security Bank Assistant Vice President and economist Robert Dan Roces pointed out the narrow fiscal deficit in October “highlights the strain faced by the catch-up spending plan for the remainder of the year, making it less likely for the government to reach its fiscal deficit target.”
“Government spending will carry a heavier burden in nudging growth for the rest of the year as the positive effects of the fiscal stimulus pitches and the lag upshot from monetary easing have yet to be felt,” he added.