THE GOVERNMENT’S deficit grew nearly fourfold in the four months to April from a year ago as a hike in state spending outstripped that of revenue collections, the Finance chief said on Wednesday, even as the fiscal gap still fell short of program.
April alone, however, saw a P46.3-billion surplus, about 12.31% smaller than April 2017’s P52.8-billion surfeit.
Citing data from National Treasurer Rosalia V. De Leon, Finance Secretary Carlos G. Dominguez III told reporters in a mobile phone message that the “deficit reached P115.9 billion” as of April, 284% more than the P30.18 billion recorded in 2017’s comparative four months, but still “P51.2 billion less than program.”
The fiscal deficit in the four months to April is equivalent to 22.13% of the P523.7-billion deficit program this year.
Mr. Dominguez said “revenues grew by 21%” annually in the first four months from P768.27 billion in 2017, while “disbursements increased by 31% to P1.04 trillion.”
He added that “Jan. to April revenues [are] higher than program by seven percent or by P21.4 billion.”
The Finance chief said that the Bureau of Internal Revenue’s (BIR) collections grew 17.49% to P655.67 billion in January-April from last year’s P558.07 billion, topping its target by P19.4 billion.
The Bureau of Customs (BoC) meanwhile raked in 30.53% more at P176.57 billion from P135.27 billion a year ago, exceeding its collection goal by P2 billion, according to Mr. Dominguez.
“We’re having a good start in the first trimester of this year but are ever vigilant of developments in the oil & capital markets abroad that may negatively affect the Philippine economy,” Mr. Dominguez said.
Sought for comment, economists said they expect both revenue and disbursement growth to pick up further for the rest of the year.
Michael L. Ricafort, economist at Rizal Commercial Banking Corp., said that “infrastructure spending by the government has been growing about 30% since the start of 2018 and the growth momentum could be sustained in the coming months, in view of the upcoming infrastructure projects especially under the Build, Build, Build Program, partly financed by additional government tax revenues under the first package of the tax reform measures/TRAIN that was implemented since the start of 2018,” referring to Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion law.
“Growth in the government’s tax revenue collections could still continue in the coming months due to higher taxes collected on fuel, tobacco, sweetened beverages, vehicles, coal under the first package of the tax reform measures,” he added.
The law also lowers personal income tax, estate and donors taxes, while stripping away some value-added tax incentives.
Guian Angelo S. Dumalagan, market economist at the Land Bank of the Philippines, meanwhile said that the below-target deficit is “not surprising” as the TRAIN law contributed “above average” during the period, which he said would give the government more fiscal space for even bigger spending in the near future.
“The lower-than-expected deficit is not something to worry about, considering that it is backed by robust performances in both revenue and expenditure components. In fact, that would give the government more flexibility in its fund-raising activities and greater room to fast-track its spending plans on infrastructure,” he said in a separate e-mail.
“Moving forward, I believe that the deficit level will move closer to target towards the end of the year as more and more government projects are implemented. Revenues, however, will continue to grow at a solid pace, helped by the increase in excise taxes since early this year.” — Elijah Joseph C. Tubayan