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‘Underspending’ shaves deficit in Q1
THE STATE’s fiscal deficit shrank last quarter amid “underspending” with delayed enactment of the 2019 national budget, according to preliminary Bureau of the Treasury (BTr) data which the Finance department released on Thursday.
Citing a BTr report submitted to him on April 17, Finance Secretary Carlos G. Dominguez cited in a Viber message to reporters “P.1.01 bln [billion] daily underspending for primary expenditures (non-interest payments) for Jan[uary]-March, based on BTr estimates.”
First-quarter fiscal deficit shrank 41% year-on-year to P90.245 billion, missing the program by 52%. In March alone, the fiscal deficit shrank by 47% annually to P58.409 billion, falling 51% short of program.
Whittling the deficit were smaller state disbursements as the government operated on a reenacted 2018 national budget that left new programs and projects unfunded. President Rodrigo R. Duterte finally signed the national budget into law on April 15, nearly four months late, as approval of the spending plan was stalled by a tiff between leaders of the House of Representatives and the Budget department, and then between the House and the Senate which accused each other of irregular fund realignments. He vetoed about P95.3 billion in appropriations that he said were not in accordance with his administration’s priorities, slashing this year’s national budget to P3.662 trillion.
Consequently, state disbursements missed the program by 11% at P777.99 billion in the first quarter, although they edged up a percent from a year ago. In March alone, state spending fell by eight percent from a year ago and fell 16% short of program at P287.327 billion.
State revenue collections sustained double-digit growth rates last quarter, increasing by 11% year-on-year though narrowly missing the program by 0.03% at P687.745 billion. Collections of the Bureau of Internal Revenue and of the Bureau of Customs went up by 11% and nine percent respectively, while non-tax revenues “rose by 18% with higher dividends from remittances from BSP (Bangko Sentral ng Pilipinas) and PDIC (Philippine Deposit Insurance Corp.) totalling P8.6 billion.”
March alone saw state revenue collectors rake in 13% more from a year ago and top the program by three percent at P228.918 billion.
Michael L. Ricafort, economist of the Rizal Commercial Banking Corp., said in a mobile phone message: “The latest budget deficit data may somewhat reflect the delays in the 2019 national budget, despite the sustained growth in government spending especially on infrastructure as well as increased government spending related to the upcoming mid-term elections in May 2019.”
“With the 2019 national budget enacted into law last week, government spending may pick up again in the coming months, thereby leading to faster economic growth.” — Reicelene J. N. Ignacio