Faster spending, higher revenues seen in Q2

TO ATTAIN the programmed deficit of P283.7 billion this year, the government plans to shore up revenue collections as it spends the most amount on public goods and services during the second quarter.

Under the quarterly fiscal program for the year 2015 earlier approved by the inter-agency Development Budget Coordination Committee (DBCC), the government must collect P618.7 billion in tax and nontax revenues, and disburse P669.4 billion during the second quarter in order to attain the lowest quarterly budget deficit figure of P50.8 billion.

The share of revenues to be collected in the second quarter constitutes 27.2 percent of total revenues expected this year.

The disbursements, on the other hand, would account for 26.2 percent of the 2015 spending program.

In the first quarter, the government was supposed to collect P484.1 billion in revenues, while spending P582.2 billion, to attain a deficit of P98.1 billion.

In the third quarter, the programmed deficit stands at P74.9 billion, resulting from spending worth P655.2 billion and revenue collections of P580.3 billion.

For the fourth quarter, the government has set a budget deficit goal of P59.9 billion. Hence, it needs to spend P652 billion, and collect P592.1 billion in revenues.

In 2015, total disbursements are expected to reach P2.559 trillion—higher than the P2.275 trillion in revenues to be collected throughout the year.

The Bureau of Internal Revenue, the biggest collection agency of the government, was tasked to collect P1.674 trillion in taxes this year—P338.1 billion in the first quarter, P474 billion in the second quarter, P427.1 billion in the third quarter, and P434.7 billion in the fourth quarter.

As for the Bureau of Customs, its quarterly targets are as follows: P103.4 billion in the first quarter, P105 billion in the second quarter, P111.4 billion in the third quarter, and P116.8 billion in the fourth quarter.

Customs collections should total P436.6 billion by yearend.

The government also aims to collect P145.6 billion in nontax revenues this year, of which P60.7 billion will come from the Bureau of the Treasury.

In 2014, weak government spending, mainly because of the “chilling effect” of a High Court decision that the Disbursement Acceleration Program (DAP) was unconstitutional, brought total expenditures to just P1.982 trillion—13.3-percent lower than the P2.284 trillion programmed for last year.

This meant that the government did not spend as much as it should in order to support the investments required to sustain economic growth.

The DAP was supposed to be the vehicle that would fast-track disbursements.

Slower spending on public goods and services, coupled with an 11-percent jump in total revenues, narrowed last year’s budget deficit to P73.1 billion—73 percent lower than the 2014 program of P266.2 billion.

Last week, Budget Secretary Florencio B. Abad admitted that “2014 was a hard lesson on public spending.”

Abad blamed “capacity weaknesses” of agencies and government-owned and -controlled corporations (GOCCs), which prevented them from fully utilizing their notice of cash allocations. This development accounted for almost half of last year’s spending deficit.

For 2015, Abad said, the Department of Budget and Management is currently refining agency spending processes as well as enhancing its respective operational capacities to enable “faster and more efficient disbursements.”