Deficit narrows, but spending picks up
THE GOVERNMENT posted a fiscal deficit in March that was smaller than the year-ago gap, as spending picked up with revenues despite the past year’s high expenditure base as the May elections then neared, according to data the Treasury bureau released yesterday.
The resulting first-quarter deficit was similarly narrower than the gap recorded in 2016’s comparable three months and less than a fifth of the P478.1-billion program for 2017 that is equivalent to three percent of gross domestic product (GDP).
The fiscal deficit is programmed to balloon as the government ramps up spending on infrastructure and social services — financed by bigger revenues as a result of tax reforms — in a bid to spur overall economic growth to a faster plane and lift more Filipinos out of poverty.
This overall economic strategy has been dubbed “Dutertenomics” after President Rodrigo R. Duterte.
The government incurred a P353.422billion deficit last year, equivalent to 2.4% of GDP which was the highest ratio since 2010’s 3.5% though below a 2.7% (P388.9billion) program.
MARCH PERFORMANCE
March logged a P61.5-billion fiscal deficit that was 17% less than the P74.4-billion gap recorded in 2016’s comparable month but nearly three times last February’s P23.7-billion shortfall.
Revenues increased by 14% to P180.2 billion from P157.8 billion, with tax collections growing 12% to P156.4 billion from P139.5 billion and non-tax revenues surging 30% to P23.9 billion from P18.3 billion.
The Bureau of Internal Revenue (BIR), which contributed nearly threefourths to total tax take, raked in 11% more at P117.1 billion from P105.7 billion, even as it missed a P121.613-billion target for last month.
The Bureau of Customs (BoC), which contributed nearly a fourth, increased collections by 15% to P37.3 billion from P32.4 billion.
Government spending increased by four percent to P241.7 billion from P232.2 billion, picking up from February’s one-percent increment but much slower than the 23% hike recorded in March last year.
Interest payments fell 13% to P31.3 billion from P35.7 billion, while other expenditures grew seven percent to P210.4 billion from P196.4 billion.
March led to a first-quarter P83billion deficit that was more than a fourth less than the P112.5-billion gap recorded in 2016’s comparable three months.
Revenues grew 11% to P532.4 billion from P479 billion, as tax collections rose 13% to P479.6 billion from P425.3 billion.
The BIR grew collections by 12% to P370.4 billion from P330.2 billion, while the BoC increased its take by 15% to P104.1 billion from P90.5 billion.
The first three months also saw state spending pick up by four percent to P615.4 billion from P591.5 billion, as interest payments slid five percent to P97.9 billion and other expenditures increased by six percent to P517.5 billion.
Netting out interest payments from expenditures, the government posted a P30.2- billion primary deficit in March that was 22% lower than the past year, while the first quarter saw a P14.9- billion primary surplus that was a turnaround from the past year’s P9.9-billion deficit.
Sought for comment, Budget Secretary Benjamin E. Diokno attributed still- relatively slow spending growth to “base effects”.
“Because last year was an election year… They ( past government) were anticipating the election ban (on public works) so they were releasing much faster,” said Mr. Diokno in a phone interview, adding that “we expect higher expenditures in the second and third quarter — summer months — construction period ‘ yan.”