Government spending further picks up, says Treasury

MANILA, Philippines — The national government continued to pick up the pace of its spending since September, a trend seen to help widen the country’s fiscal deficit closer to the government’s target and to boost economic growth, according to the Bureau of the Treasury (BTr).

In an interview, National Treasurer Rosalia De Leon said the government continues to enjoy a manageable cash position, with a strong growth in disbursements and a steady revenue cash flow.

“We’re watching the disbursements and it’s really picking up for the past two months. Even for October, first week, we’ve seen very high disbursements,” the national treasurer said, noting that spending growth since September has been exhibiting double-digit growth.

“If this trend continues, then we’ll see that slowly the deficit levels would also be directed toward the target of 3.2 percent,” she said.

At the same time, De Leon noted that the government’s revenue inflow continues to increase, ensuring enough resources to fund the higher spending requirement.

According to De Leon, the continued improvement in the government’s spending performance would help boost economic growth in the fourth quarter of the year.

“We’re watching where the disbursements are coming from...so that would also be able to pull up growth for the fourth quarter,” she said.

The national treasurer also said the government’s cash position provides the Treasury room to pause from conducting fund raising activities for the rest of the year.

“We’re coming from a very strong cash position. Even if the disbursement picks up, we have been preparing for this already to be able to meet the requirements and we still have a good cash position going into next year,” she said.

The Department of Budget and Management (DBM) earlier said government spending is already starting to normalize after the Duterte Cabinet’s economic cluster formulated a spending catch up plan that would offset the slowdown in disbursements caused by the delay in the passage of the 2019 national budget in the first half.

Moreover, the DBM said disbursements are expected to pick up as the expenditures of the Department of Public Works and Highways and Department of Transportation would be heavily concentrated in the second semester.

According to latest data from the BTr, government disbursements from January to August has reached P2.211 trillion, 0.9 percent up from P2.191 trillion in the same eight-month period in 2018.

This is about 58.6 percent of the disbursement program for 2019, which is set at P3.77 trillion.

Revenues, meanwhile, is targeted to reach P3.15 trillion. This translates into a nominal deficit ceiling of P624.4 billion for 2019, equivalent to 3.2 percent of GDP.