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Budget balance back in surplus as state spending still falls short

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ByKeith Richard D. Mariano
THE NATIONAL government’s budget balance swung back to a surplus in November, with spending continuing to fall below target even as it expanded by double digits from a year ago, data released yesterday showed.

The state budget surplus narrowed to P6.029 billion in November from P6.82 billion in 2014’s comparable month, Treasury data showed, but was more than seven times the P824-million surfeit programmed that month.

This was also a reversal of the P27.02-billion deficit recorded in October and marks the fourth month in 2015 that the government posted a budget surplus.

The November surfeit lowered the year-to-date budget balance to a P46.545 billion deficit, well below the P246.67-billion program for those 11 months and putting it further behind the P283.69-billion ceiling for 2015.

Still, the end-November tally was much wider than the P26.775-billion shortfall booked in January-November 2014.

Fiscal Performance




The government saw its revenues rise 12% to P177.45 billion in November from P158.22 billion a year earlier, but they still fell short of a P224.065-billion goal for the month. This brought collections for the 11 months to P1.945 trillion, up 12% from a year ago but also below the P2.089-trillion target for the period.

“We approach the P2-trillion mark resolute in our commitment to expand fiscal space for the Filipino people,” Finance Secretary Cesar V. Purisima said in a statement.

The Bureau of Internal Revenue raked in P136.37 billion during the month, increasing 12% year on year to lift the year-to-date amount 9% to P1.327 trillion. However, collections fell below the P174.118-billion and P1.541-trillion targets for the month and period, respectively.

Collections by the Bureau of Customs also climbed 18% to P29.06 billion during the month — albeit below the P40.007-billion goal — and by 2% to P329.78 billion from January to November, also behind the targeted P397.18 billion for the period.

The Treasury’s income, meanwhile, fell 9% to P3.10 billion. The bureau grew revenues 12% annually to P100.54 billion year to date.

From January to November, other offices contributed P188.14 billion or 86% above year-ago levels. This includes P8.92 billion generated in November alone, when collections increased 8%.

SPENDING UP BUT BELOW TARGET
On the other hand, the government’s expenditures increased 13% year on year to P171.42 billion in November, but fell short of the month’s P223.241-billion target.

The month’s disbursements brought the 11-month tally to P1.992 trillion, up 13% from the year prior but also below a P2.335-trillion goal.

Interest payments accounted for 9% or P15.99 billion of November expenditures. This is 12% less than last year’s 18.1 billion, mainly due to the liability management exercise conducted in September.

Year to date, interest payments slipped by 1% to P287.89 billion.

Budget and Management Secretary Florencio B. Abad, in a statement yesterday, noted that November marked the sixth month in a row that disbursements expanded by double-digit increments.

“This year, we remain optimistic that growth will further accelerate in the first quarter of 2016 with the comprehensive release of the budget, faster implementation of projects before the election ban, and the greater push to deliver public goods and services as soon as possible,” Mr. Abad said.

The government wanted to spend P2.558 trillion and collect P2.275 trillion in revenues last year to post a P283.7-billion budget deficit equivalent to 2% of GDP, in line with its goal to bring economic growth to 7-8%.

In an earlier interview, Mr. Abad said the end-2015 deficit could reach just 1% of GDP to beat 2014’s 0.6%.

But an analyst yesterday said even this lower estimate may be a “long shot,” with the government already almost sure to miss its full-year deficit program.

“Right now we’re at 0.6% of GDP and although it would be achievable, it may be a long shot to hit 1%,” Nicholas Antonio T. Mapa, research officer at the Bank of the Philippine Islands (BPI), said in an e-mail when sought for comment.

The government will indeed miss the “very low-hanging” 2%-of-GDP deficit ceiling again this year, Mr. Mapa said.

“[It is] sad that other ASEAN (Association of Southeast Asian Nations) neighbors post much-higher deficit-to-GDP ratios while we seem to be obsessed with saving and not spending enough to invest,” he added.

BPI’s Mr. Mapa also noted that spending continues to be a laggard despite improvements in recent months.

“Revenue collection continues to outshine, which is a positive but the pace of spending is lamentable. True, they posted double-digit-growth but its still woefully behind schedule,” Mr. Mapa said.

“Since government spending was positive, this will help add to the expansion in economic activity [in the fourth quarter]. Has it been enough given their space? That’s another story.”

The government, however, may have to rely less on government spending for economic growth amid the ban on certain disbursements during the election period.

“We will see, however, a decent robust clip, given that election spending by candidates will help the services and manufacturing sectors through procurement of election materials as well as all that money sloshing around with candidates spending,” Mr. Mapa said.

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