Fiscal gap swells as spending surges in Oct 2018

MANILA, Philippines — The country’s fiscal deficit ballooned by 175 percent to P59.9 billion in October from only P21.8 billion a year ago as revenue failed to keep up with the government’s aggressive spending program, the Bureau of the Treasury reported yesterday.

This brought the government’s cumulative deficit to P438.1 billion from January to October, 87 percent higher than the P234.9 billion recorded in the previous year. The 10-month tally already accounted for 84 percent of the 2018 full-year deficit program of P523.7 billion.

Revenue for October alone rose 20 percent to P246.8 billion compared to the P205.1 billion recorded in the same month last year as both tax and non-tax collections posted double-digit growth rates.

Tax collections grew by 19 percent year-on-year to P222.2 billion, the bulk of which was generated by the Bureau of Internal Revenue (BIR). The agency collected P164.8 billion in October, 16 percent higher than the P142.5 billion recorded in October 2017.

Duties and taxes collected by the Bureau of Customs (BOC) also increased by 30 percent to P56 billion from P42.9 billion a year ago.

Non-tax collections jumped 32 percent to P24.5 billion in October.

Of the amount, P8.4 billion was generated by the Bureau of the Treasury (BTr), 10 percent above the P7.6 billion recorded the same month last year.

“The increase was driven by higher income from national government deposits, interest on advances to government-owned and controlled corporations, foreign exchange risk cover fee and remittance of NG share from PAGCOR (Philippine Amusement and Gaming Corp.),” the BTr said.

Revenues from other offices reached P16.1 billion for October, increasing by 47 percent over the 2017 level of P11 billion.

Year-to-date, the national government’s revenue grew by 18 percent to P2.36 trillion from P2.01 trillion in the same 10-month period in 2017.

Meanwhile, government spending in October accelerated by 35 percent to reach P306.6 billion from P226.9 billion in the same month a year ago.

“This marks the second highest monthly disbursement growth for the year following the 43 percent growth recorded in April,” the Treasury said.

Primary expenditures (disbursements net of interest payments) amounted to P282.6 billion, higher by 37 percent than the P206.4 billion registered in the same month last year.

Interest payments in October also climbed 18 percent year-on-year to reach P24 billion due to the payment of interest that was originally due in September, but was paid in October, as well as the valuation effect of the weaker peso on foreign currency interest servicing.

Despite this, interest payments accounted for only 7.8 percent of the total expenditures for the month, lower than the nine percent recorded in the same month in 2017.

Total expenditures from January to October amounted to P2.8 trillion, 25 percent up from last year’s level of P2.24 trillion.

Netting out interest payments from expenditures, the national government’s primary deficit for October still widened to P35.9 billion from P1.4 billion in October 2017.

This resulted in a year-to-date primary deficit of P142.8 billion, a reversal from the P34.5 billion primary surplus posted in the same period last year.

Meanwhile, Speaker Gloria Macapagal-Arroyo is supporting the plan of the official opposition bloc in the House of Representatives to conduct an inquiry into the reported underspending of the Duterte administration that has already reached P1.3 trillion in 2017.

“The House Oversight Committee wants to look into the underspending (of the DBM). That’s a good function, that’s a very good intention. I agree with them, I agree with the minority on their general evaluation,” Arroyo said.

House Minority Leader Danilo Suarez said they plan to summon Budget Secretary Benjamin Diokno to explain the underspending of the Duterte administration.

Suarez, along with some more than 40 members of the official opposition bloc, comprise the House Oversight Committee. “The slow disbursement of government agencies must be addressed,” the Quezon lawmaker said. – With Delon Porcalla