Fiscal gap widens 4-fold in November as spending surges

MANILA, Philippines — The government‘s fiscal deficit widened more than four times year-on-year to reach P39.1 billion in November, as the strong growth in government spending outpaced the moderate increase in revenue, the Bureau of the Treasury reported yesterday.

According to the latest cash operations report of the BTr, the government’s fiscal deficit surged by 354 percent to P39.1 billion in November compared to the P8.6 billion deficit recorded in the same month in 2017.

This brought the country’s year-to-date fiscal position to a deficit of P477.2 billion, which already represents 91 percent of the 2018 full-year deficit ceiling of P523.7 billion. This is also almost twice the P243.5 billion deficit incurred in the same 11-month period last year.

A deficit occurs when the government spends more than the revenues that it generates.

Treasury data showed that government revenues last November rose by seven percent to P259.7 billion from the P243.5 billion posted in the same month in 2017.

Of this amount, P242.2 billion came in the form of tax revenues from the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), while the remaining P17.5 billion were non-tax collections from other offices.

The BIR, for its part, collected P192 billion last month, seven percent higher compared to the P179.4 billion it raised in November 2017.

The BOC‘s collections also rose by three percent to P47.9 billion in Novemver from P46.4 billion in the same month last year.

Revenues generated by the BTr for November likewise improved by 10 percent year-on-year to P4.7 billion due to higher income from national government deposits and the bond sinking fund or securities stabilization fund, dividend collections from state corporations, and the national government’s share in the income of the Philippine Amusement and Gaming Corp.

Year-to-date, the national government generated revenues amounting to P2.618 trillion as of end-November, up by 16 percent from last year’s level of P2.25 trillion. This also corresponds to 92 percent of the P2.846 trillion full-year revenue program for 2018.

Total BIR collections from January to November reached P1.8 trillion, an 11-percent improvement over the same period last year, while the BOC collected P538.5 billion, a 30-percent jump from last year.

Non-tax revenues also grew by 31 percent as of end-November to P258 billion from P196.4 billion a year ago.

On the other hand, government disbursements for the month of November significantly outpaced revenues, growing by 19 percent to reach P298.9 billion from P252.1 billion in the same month in 2017.

Interest payments grew by 20 percent to P24.7 billion, mainly due to discounts of reissued bond series and valuation effect of peso depreciation.

This means the remaining P274.2 billion in disbursements was used for more productive spending last month.

From January to November, government expenditures amounted to P3.095 trillion, 24 percent higher than the P2.493 trillion recorded in the same period last year.

Of the amount, P320 billion was used for interest payments, while the remaining P2.775 trillion was for primary expenditures.

Interest payments as a percentage of expenditures as of end-November declined to 10.3 percent from 11.6 percent a year ago, while interest payments as a share of total revenues likewise decreased to 12.2 percent from 12.9 percent.

Net of interest payments, the national government registered a primary deficit amounting to P14.5 billion in November. This is a reversal of the P12 billion primary surplus posted in the same month in 2017.

As a result, the national government incurred a primary deficit of P157.2 billion from January to November, also a reversal of the P46.5 billion primary surplus recorded in the same 11-month period last year.

The BTr said this turnaround could be attributed to the administration’s aggressive “Build, Build, Build” program, as well as increased investments in human capital.