State spending grows in September but falls slightly below program
MANILA, Philippines — The Philippine government posted a wider budget gap in September, the Bureau of the Treasury reported Tuesday.
But state spending continued to fall short of target as of third quarter despite picking up as policymakers implement their “catch-up” plan, data showed.
The government’s fiscal balance swung to a deficit of P178.6 billion in September, 85.52% larger than P96.2 billion recorded in the same month last year. A deficit means the government spent more than it earned, while the surplus means otherwise.
Expenditures jumped 39.01% to P415.1 billion in September from P298.6 billion a year ago — the fastest for the first nine months of 2019. Removing interest payments, disbursements for the month grew 39.89%.
Meanwhile, revenues collected inched up 16.89% year-on-year to P236.5 billion from P202.4 billion on the back of higher imports and collections from the Tax Reform for Acceleration and Inclusion (TRAIN) Law, Rice Tarrification Law and the National Food Authority tax expenditure collection, the treasury bureau said.
"The impressive performance on both fronts gives hope for a 6% growth chase towards the end of the year as expenditures roll out while the government continues to streamline and improve its collection efforts," said Nicholas Mapa, senior economist at ING Bank in Manila.
Benign underspending
From January to September, the budget deficit stood at P299 billion, 20.95% smaller than P378.2 billion gap recorded in the same period last year.
Year-to-date, state spending grew 5.51% to P2.63 trillion, 2.14% lower than P2.68 trillion that the government had hoped to disburse during the period.
Revenues generated climbed 10.25% to P2.33 trillion in the first nine months from P2.11 trillion last year.
The BTr released the latest budget balance data a day after the Department of Budget and Management reported that government spending on infrastructure continued to contract in August due to the lingering impact of the 2019 budget delay and the election ban on public works.
The Philippine economy expanded 5.5% in the second quarter, weaker than 5.6% recorded in the preceding three months after the delayed approval of the 2019 budget disrupted state spending.
Socioeconomic Planning chief Ernesto Pernia said the economy would have to grow by an average of 6.4% in the second half to hit the low-end of the government’s 6%-7% target for this year.
The state’s economic managers vowed to speed up the execution of delayed projects, adding they were working on a “carefully crafted and bold expenditure catch-up plan to enable us to hit a GDP growth rate of above 6% this year.”
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