Fiscal deficit marks Aug. on spending hike

By Elijah Joseph C. Tubayan
Reporter
THE GOVERNMENT’S budget balance swung to a deficit in August from a year-ago surplus as expenditures surged faster than revenue growth, the Bureau of the Treasury (BTr) said on Monday.
The government posted a P2.6-billion fiscal deficit in August against a P28.8-billion surplus recorded in the same month last year.
Overall revenues that month grew 11% year-on-year to P256.9 billion from P230.4 billion in August 2017. However this was slower than the 24% growth clocked in July.
Of this amount, tax revenues accounted for P239.8 billion, a 13% increase from last year’s P212.2 billion. The Bureau of Internal Revenue (BIR) collected P185.1 billion, eight percent more than the year-ago P171.1 billion. The Bureau of Customs (BoC) raked in P52 billion, 36% more than the P38.3 billion collected a year ago due to “the higher exchange rate, increased oil prices, proper valuation, strong enforcement and revenue-enhancing measures.” Other revenue offices’ tax take totaled P2.7 billion, 18% bigger than the P2.3 billion collected a year ago.
Non-tax revenues, on the other hand, stood at P17.1 billion in August, down six percent from P18.2 billion in August 2017. The BTr’s collections amounted to P5.4 billion, down 13% from P6.2 billion, while other offices’ revenues were P11.7 billion, dipping three percent from P12 billion.
Government expenditures, meanwhile grew 29% to P259.5 billion in August from P201.6 billion in the same month in 2017. Of this amount, interest payments (IP) accounted for P28.3 billion, up seven percent from P26.4 billion last year. Other disbursements — which includes spending on infrastructure and other capital outlays — stood at P231.2 billion, 32% more than the P175.2 billion a year ago.
For January-August, the government posted a P282-billion deficit, 60% bigger than the P176.2 billion recorded in the same eight months last year. This is equivalent to 54% of the P523.68-billion full-year deficit target.
Revenues grew 19% to P1.91 trillion from P1.60 trillion in the same comparative seven months.
Tax revenues accounted for P1.71 trillion of the total, 18% more than the year-ago P1.46 trillion. The BIR collected P1.31 trillion of tax revenues, up 13% from P1.16 trillion the past year. The BoC meanwhile raised P383.5 billion, a 35% surge from P283.6 billion a year ago. Other offices collected P15 billion, up four percent from P14.5 billion.
Non-tax revenues surged 35% to P197 billion as of August from P145.6 billion collected in the same eight months of 2017. The BTr raised P83.3 billion of that amount, 24% bigger than the year-ago P67.4 billion, while other offices raked in P113.7 billion, 45% more from P78.2 billion a year ago.
The same comparative eight-month periods saw the government spend 23% more at P2.19 trillion from P1.78 trillion.
Interest payments accounted for P238.7 billion as of end-August, up seven percent from P222.6 billion disbursed in the same period in 2017. The BTr attributed this performance to the “combined effects of the discount for T-bills (Treasury bills) issuances for 2017 and 2018 and the coupon payment for the 20-year domestic bond issued in February 2018, while the depreciated peso and higher LIBOR (London Interbank Offered Rate) continue to impact foreign payments.”
Other disbursements on the other hand amounted to P1.95 trillion, jumping 26% from P1.56 trillion last year.
Sought for comment, UnionBank of the Philippines Chief Economist Ruben Carlo O. Asuncion said that the latest fiscal data have remained largely within expectations.
“I think we are aware that from the start of this administration, ‘tax and spend’ was the key priority. They said that they will reform the tax system and spend to fund an ambitious infrastructure development plan and other social services. And so far, it has been doing what it has set out to do,” Mr. Asuncion said in an e-mail yesterday.
“If government faithfully sticks to its spending and borrowing plans, I think it can stay within comfortable levels. Government needs to stay the course of reforms and changes necessary to help the country track a higher growth trajectory that benefits as many as possible.”
Nicholas Antonio T. Mapa, senior economist of ING Bank, said the state’s expenditure growth was “impressive.”
“They appear more on track at hitting their target this year versus last year. As long as spending is pro-growth, this will help ensure that the deficit to GDP (gross domestic product) ratios remain close to or at target levels,” Mr. Mapa said in a separate e-mail.