Budget deficit narrows to P90.25 B in Q1

MANILA, Philippines — The national government’s fiscal deficit in the first quarter of the year fell below program as government underspending swelled due to the delay in the passage of the 2019 budget, according to the latest data from the Bureau of the Treasury (BTr).

National Treasurer Rosalia De Leon said the national government incurred a fiscal deficit amounting to P90.25 billion in the first three months of 2019, 52 percent lower than the P188.35 billion internal program set by the BTr.

De Leon said this is likewise 41 percent narrower than the P152.17 billion deficit recorded in the same quarter last year.

For the month of March alone, the budget deficit narrowed by 47.3 percent to P58.41 billion from the P110.82 billion posted a year ago.

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

According to Treasury data, government revenue in the first quarter grew 11 percent to P687.75 billion compared to P619.79 billion in the same quarter last year.

This is, however, slightly below the P687.9 billion BTr target for the period.

De Leon said tax collections from the Bureau of Internal Revenue (BIR) and the Bureau of Customs rose 11 percent and nine percent, respectively, while non-tax revenue climbed 18 percent with higher dividends from the Bangko Sentral ng Pilipinas and the Philippine Deposit Insurance Corp.

On the other hand, government expenditures from January to March inched up by less than one percent to P777.99 billion from last year’s level of P771.96 billion.

However, this is 11.2 percent or P98.31 billion lower than the target of P876.3 billion for the first quarter.

“Looks like we didn’t spend a bit over P1 billion per day versus program,” Finance Secretary Carlos Dominguez said in a text message to reporters.

“This will definitely be a drag on growth.”

The 2019 General Appropriations Act (GAA) was only signed by President Duterte last week, four months into 2019, following disagreements between the House of Representatives and Senate over insertions in the budget.

Due to this delay, the Development Budget Coordination Committee decided earlier to slash the government’s gross domestic product (GDP) target to a range of six to seven percent, from the original goal of seven to eight percent.

The inter-agency committee also cut the government’s disbursement program to P3.78 trillion this year, from the previous goal of P3.83 trillion.

In an earlier interview, Dominguez said the reenactment of the budget, coupled with the ongoing spending ban due to the elections, would make it hard for the government to catch up with its spending program.

But the Department of Budget and Management (DBM) said with the budget now signed, government agencies would already be able to start implementing projects, and hopefully implement catch up measures to minimize the impact of the budget delay.