THE GOVERNMENT’s fiscal deficit widened in November as a surge in state spending outpaced revenues’ double-digit growth, according to data from the Bureau of the Treasury (BTr) released on Monday.
According to its latest cash operations report, the Treasury said the fiscal gap grew by 55.64% year on year to P60.9 billion in November from P39.1-billion budget gap posted a year ago, reversing from the 17.71% contraction recorded in October.
Despite last month’s boost, the budget deficit was still 14.27% smaller year on year to P409.1 billion in the 11 months to November, 67% of the downgraded P610-billion programmed ceiling for this year.
State spending grew 22.36% to P365.6 billion in November from P298.8 billion a year ago, marking its fastest pace since a 39% hike recorded in September.
The Treasury said government’s plan to catch up with its spending program was evident in last month’s increase, which brought year-to-date state spending to P3.3 trillion, up 6.73% year on year.
The latest year-to-date figure makes up around 88% of the government’s P3.76-trillion expenditure plan for the year.
For November alone, primary expenditures — which strips out interest payments — were “responsible for much of the increase” as they grew 27.06% year on year to P348.3 billion while interest payments that month dropped 29.9% to P17.3 billion “from the previous year due to matured bonds and the receipt of settlement premia from the re-issuance of outstanding series,” the Treasury said in the statement.
Year-to-date, primary expenditures stood at P2.971 trillion while interest payments totaled P331.8, posting year-on-year increases of 7.08% and 3.67%, respectively.
National government revenues grew 17.35% year on year — their fastest pace in six months — to P304.7 billion in November from P259.7 billion.
In 11 months to November saw revenues grow 10.55% year on year to P2.894 trillion, accounting for 91% of the P3.15-trillion revenue target for full year 2019.
During the month, tax collections accounted for the majority or 93.39% of the P304-billion total revenues at P284.6 billion, up 17.5% year on year from P242.2 billion a year ago.
Broken down, the Bureau of Internal Revenue (BIR) posted its “best growth performance for the year” as it collected P232.1 billion in November, increasing 20.83% from the P192 billion it collected in the same month last year, which Treasury said was the Bureau’s “best growth performance.”
The Bureau of Customs (BoC) reported a 5.24% year-on-year improvement in collections to P50.4 billion that month from P47.9 billion a year ago.
Tax revenues from other offices fell by 6.15% to P2.1 billion from P2.3 billion.
Nontax revenues — mainly subsidies to cover taxes on government transactions — contributed six percent of the total, growing 15.25% to P20.1 billion in November from P17.5 billion in the same month last year. The Treasury contributed 27% with P5.5 billion, up 16.3% from the P4.7 billion a year ago, while contributions by other state offices increased 14.86% to P14.6 billion from P12.7 billion.
The Treasury attributed improved collections “largely to higher income from BSF/SSF (Bond Sinking Fund and the Securities Stabilization Fund) investments, national government dividends from shares of stocks and share from PAGCOR income” referring to the Philippine Amusement and Gaming Corp.
Year-to-date, tax collections grew 10.71% to P2.613 trillion from P2.36 trillion as BIR collections increased 11.77% year on year to P2.013 trillion while those of BoC grew 7.36% to P578.1 billion. Tax revenues from other offices were also higher by 5.35% to P21.5 billion.
Nontax revenues went up 9.14% to P281.7 billion in the 11-month period, with the Treasury’s contribution climbing by 30.03% to P134.7 billion while those from other offices declined by 4.87% to P147 billion.
In a note, Nicholas Antonio T. Mapa, senior economist at ING Bank N.V. Manila Branch, said that “strong expenditure” will contribute to higher fourth-quarter gross domestic product (GDP) growth which he projects at 6.6% when it is reported late next month. “The strong expenditure showing by the government adds another case for 4Q GDP to zoom to 6.6%, which would help bring full-year growth to the lower end of the government’s 6.0-6.5% target,” Mr. Mapa said.
The economy expanded by 5.6%, 5.5% and 6.2% in the first to third quarters, taking year-to-date average growth to 5.8%. — Beatrice M. Laforga