By Melissa Luz T. Lopez
THE GOVERNMENT could have topped its fiscal deficit ceiling in 2018, the state budget chief said on Wednesday as economic managers move to have big-ticket public works spared from an election ban in a bid to sustain spending momentum.
Budget Secretary Benjamin E. Diokno said the fiscal gap likely hit an equivalent of 3.1% of gross domestic product (GDP) last year, an “emerging” estimate based on initial data. If realized, this would be slightly bigger than the programmed three-percent ratio and wider than the 2.2% logged in 2017.
The budget balance posted a P477.2-billion shortfall as of end-November, which was already 91% of the P523.7-billion gap programmed for the entire year.
That came as state spending surged by a fourth to P3.095 trillion, against a 16% rise in revenue collections to P2.618 trillion. The spending surge was led by infrastructure, which went up by 49.7% to P728.1 billion in November versus the previous year as more projects went live.
The official full-year fiscal data will be released by the Bureau of the Treasury next month. As a developing economy, the Philippines operates on a budget deficit by spending more than what it collects in order to boost economic activity and overall growth.
Looking ahead, Mr. Diokno said the government hopes to sustain spending this year despite hurdles like the delayed passage of the P3.757-trillion national budget as well as the 45-day public works ban ahead of the May 13 mid-term polls.
“We are ready to submit a memo to the President to ask Comelec (Commission on Elections) to exempt… at least the 75 major projects so that there will be little disruption in our ‘Build, Build, Build’ program. We’re unanimous on that,” Mr. Diokno said yesterday during the weekly “Breakfast with Ben” media forum.
Economic managers have agreed to bring up the matter to next week’s Cabinet meeting, ahead of the March 29-May 12 halt on all state-funded construction projects.
However, the request also hinges on enactment of the 2019 budget, now languishing in a bicameral conference where lawmakers scuffle over spending plan details.
Finance Secretary Carlos G. Dominguez III has said that the delayed budget is estimated to affect some P46 billion worth of delayed projects in this quarter, noting this would surely hurt growth for the period.
The National Economic and Development Authority projects a 1.1-2.3 percentage point decrease in the full-year GDP print if the budget bill is not passed at all.
The government had hoped to front-load vital spending ahead the election ban had the 2019 budget been enacted on time and before the rains come next semester.
Mr. Diokno said he expects the poll body to “respond positively” to their request, noting that it has been done before.
“We are confident that our request will be granted. This is for national welfare and development,” the Budget chief said.
“I think Comelec will be broad-minded enough — it’s a national project, it will not affect the elections on the district level or something like that.”
The Duterte administration is looking for ways to prod economic activity further, following 6.2% gross domestic product growth clocked in 2018 that settled below the government’s downward-adjusted 6.5-6.9% target. For 2019, the goal is for overall economic growth to hit 7-8%.
The Budget chief has noted that the original seven percent growth target for last year could have been attained had agriculture grown by four percent, instead of 2018’s actual 0.56%.