By Elijah Joseph C. Tubayan
THE NATIONAL GOVERNMENT saw its budget deficit more than double in October as expenditure growth outpaced an increase in revenues, the Bureau of the Treasury reported on Monday.
The fiscal gap surged by 175% to P59.9 billion in October from P21.8 billion a year ago, as expenditures grew 35% to P306.6 billion from P226.9 billion and revenues increased 20% to P246.8 billion from 205.1 billion.
Tax revenues, which accounted for about 90% or P222.2 billion of the overall revenues, grew 19% year-on-year. The Bureau of Internal Revenue (BIR) collected P164.8 billion of that amount, 16% more than the year-ago P142.5 billion, while the Bureau of Customs (BoC) raked in P56 billion, increasing by 30% from P42.9 billion in October last year. Other offices raised P1.5 billion, up 45% from last year.
Non-tax revenues — including tax subsidies for state importation and other transactions — grew 32% to P24.5 billion in October. The Treasury raised P8.4 billion of that amount, up by a tenth from last year, which was due to higher income from national government deposits, interest on advances to state companies, foreign exchange risk cover fee and the national government’s share of Philippine Amusement and Gaming Corp. earnings. The government also generated P16.1 billion from other offices, surging 47% year-on-year.
Expenditures’ 35% increase in October was driven primarily by the 37% surge of “other” disbursements — which include infrastructure and other capital outlays — to P282.6 billion, accounting for 92.17% of overall state spending, from P206.4 a year ago.
Interest payments, meanwhile, amounted to P24 billion, 18% more than in October 2017.
The 10 months to October saw the fiscal deficit grow 87% to P438.1 billion from P234.9 billion in 2017’s comparable period.
Overall revenues stood at P2.358 billion in the January-October period, up 18% from the P2.007 trillion logged last year. The tax take was 16% bigger year-on-year to P2.118 trillion from P1.825 trillion in the same comparable 10-month periods. The BIR raised P1.609 trillion of that amount, 12% larger from last year, while the BoC collected P490.6 billion, surging 34%. Other offices raised P18.2 billion more than a year ago.
Non-tax revenues amounted to P240.6 billion, 33% more than last year, with the Treasury raising P98.9 billion of that amount, up by a fifth year-on-year, and other offices generating P141.7 billion, 43% higher than the past year.
The national government spent a total of P2.796 trillion in the 10 months to October, a fourth bigger than the P2.241 trillion disbursed in the same months in 2017. “Other” disbursements grew 27% to P2.501 trillion from last year, while interest payments increased by 10% to P295.3 billion.
Sought for comment, Union Bank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion said that the expansion of the fiscal deficit was to be expected due to the government’s infrastructure push.
“While the fiscal deficit has almost tripled from last year and while it is very important to recognize such, this is something that is expected from the current government’s set of priorities. It is good to note that revenues have been in parallel growth with spending. And since spending is larger compared to revenue collections, expenditure should be directed and specific. Current expenditures should be sustainable and according to what was planned,” he said in an e-mail.
“In the coming months, I expect the fiscal deficit to continue to widen as aligned with (President Rodrigo R.) Duterte’s plans for higher spending on infrastructure development,” he added.
“The widening deficit, though, may impact the currency and trade… and should be carefully monitored.”
National government fiscal performance (October 2018)