Budget gap narrows as government spends less in 9 months

MANILA, Philippines — The national government’s budget gap narrowed in the first nine months as public spending fell short of target despite strong growth in September, the Bureau of the Treasury (BTr) reported yesterday.

According to the latest cash operations report of the BTr, the national government registered a budget deficit of P299 billion from January to September, 20.95 percent lower than the P378.2 billion gap recorded in the same period last year.

This was likewise 18.03 percent lower than the P364.7 billion deficit program set for the nine-month period.

For September alone, the BTr said the fiscal deficit widened by 85.52 percent to P178.6 billion from P96.2 billion in the same month of 2018, mainly due to the strong growth in government disbursements.

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

According to Treasury data, government expenditures in the first nine months reached P2.63 trillion, 5.51 percent higher than last year’s level of P2.49 trillion.

This was, however, 2.14 percent behind the government’s P2.68 trillion spending goal for the first three quarters.

For September alone, disbursements jumped by 39 percent to P415.1 billion from P298.6 billion last year, marking the fastest growth in spending so far in the first nine months.

In a text message, Budget Undersecretary Laura Pascua said the 39 percent growth in disbursements pulled up third quarter spending, which is now seven percent above target.

She attributed this to the implementation of catch up measures to offset the impact of the delay in the passage of the 2019 budget.

“According to our preliminary data, Department of Public Works and Highways spending in September grew by 60 percent, Department of Education by 40 percent, Department of Health by 27 percent, and Department of Agriculture by 40 percent. So departments are really trying to cover lost ground,” she said.

Meanwhile, the Treasury said government revenues for the January to September period grew by 10.25 percent to P2.33 trillion from P2.11 trillion in the same period last year.

BTr records also showed this is 10.35 percent higher than the P2.32 trillion revenue for the period.

Revenues for the month of September alone, rose by nearly 17 percent to P236.5 billion from P202.4 billion in the same month in 2018.

Collections by the Bureau of Internal Revenue (BIR) as of end-September improved by nearly 11 percent, reaching P1.6 trillion as compared to P1.44 trillion last year. Still, this was 4.2 percent behind the bureau’s target of P1.67 trillion.

The Bureau of Customs (BOC), for its part, collected P470 billion in the first nine months, which is 8.15 percent up from P434.6 billion last year. This was, however, 2.29 percent below program.

Excluding interest payments, the Treasury said the national government’s primary deficit from January to September declined by 95.09 percent to P5.2 billion from P106.9 billion in the same period last year.

Nicholas Mapa, ING Bank senior economist said the strong double digit growth in both spending and revenues for the month of September bodes well for the country’s economic growth in the second half.