Budget deficit narrows to P49.3 billion in October

MANILA, Philippines — The national government’s fiscal gap narrowed in October as the growth in state revenues outpaced the increase in disbursements, the Bureau of the Treasury (BTr) reported yesterday.

According to the latest cash operations report of the BTr, the government’s budget deficit declined by 17.71 percent to P49.3 billion in October from P59.9 billion in the same month last year.

This happened as revenues rose by almost six percent, outstripping the 1.37 percent growth in expenditures.

From January to October, the national government’s budget deficit amounted to P348.3 billion, also narrower by 20.51 percent compared to the P438.1 billion recorded in the same period last year.

This is equivalent to 55.78 percent of the government’s P624.4 billion deficit cap for the full year.

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

For October, national government revenues rose by 5.99 percent to P261.6 billion from P246.8 billion in the same month last year.

The Treasury said the bulk, or P237.5 billion, of the total revenues came from tax collections, while the remaining P24.1 billion were from non-tax sources.

Revenues raised by the Bureau of Internal Revenue (BIR) climbed by 8.09 percent to P178.1 billion from P164.8 billion a year ago, while collections of the Bureau of Customs (BOC) similarly increased by 3.04 percent to P57.7 billion from P56 billion last year.

The BTr contributed P10.6 billion in revenues, which is 26.77 percent up compared to P8.4 billion a year ago. This was fueled by higher income from national government deposits, share from Philippine Amusement and Gaming Corp.’s income and dividends on shares of stocks.

From January to October, government revenues grew by 9.8 percent to P2.59 trillion from P2.36 trillion in the same period last year.

Meanwhile, the national government’s expenditures inched up by 1.37 percent to P310.8 billion in October from P306.6 billion in the same month of 2018.

This growth was slower compared to the 39 percent jump seen in September given the high base effect in October last year, when spending jumped 35.2 percent year-on-year to P306.6 billion.

Still, the Treasury said cumulative disbursements from January to October reached P2.94 billion, 5.05 percent higher than the previous year’s P2.8 trillion.

Netting out interest payments from expenditures, the national government posted a  primary deficit of P28.5 billion for the month of October. This resulted in a year-to-date primary deficit of P33.8 billion, 76.33 percent narrower than the P142.8 billion level over the same period in 2018.

Sought for comment, ING Bank senior economist Nicholas Mapa said the fiscal figures for

 October showed how the government’s catch-up spending plan gained ground despite higher base effects.

“The government carried on its catch-up spending with expenditures up 1.4 percent, managing to still expand on top of the 35.2 percent surge in state spending last October 2018,” Mapa said in an e-mail.