Q1 gov’t deficit widens on poll spending
The government ramped up spending for public goods and services in the months leading to the elections even as revenue collection remained steady, resulting in a wider budget deficit of P112.5 billion at the end of the first quarter.
The latest Bureau of the Treasury data released Thursday showed that end-March expenditures grew 17 percent to P591.5 billion from P504 billion a year ago.
But Treasury data also showed that the government failed to spend all the P673.3 billion programmed for the first quarter, an underspending of 12 percent.
Total tax and non-tax revenues, meanwhile, increased by a mere 2 percent to P479 billion from P470.5 billion in the first quarter of last year.
Actual end-March revenue collections were 17-percent below the P573.7-billion target for the period.
The first-quarter take of the Bureau of Internal Revenue, the country’s biggest revenue agency, grew 8 percent year-on-year to P330.2 billion, while cheaper petroleum imports pulled down the Bureau of Customs’ collections by 2 percent to P90.5 billion. Both revenue agencies did not meet their respective end-March targets, with shortfalls of 21 percent and 22 percent, respectively.
The faster increase in disbursements expanded the first-quarter deficit by 236 percent, versus the P33.5-billion deficit posted during the same period a year ago.
In March alone, the country posted a P74.4-billion deficit as expenditures worth P232.2 billion outpaced revenues totaling P157.8 billion. Disbursements jumped 23 percent year-on-year last March, while the amount of revenues collected that month slipped 8 percent from a year ago.
“Public expenditures recorded a remarkable double-digit growth in the first quarter, largely contributed by the front-loading of agency budgets and faster rate of disbursements in the run-up to the elections. The increase was brought about by the comprehensive release of the budget at the start of the year, allowing agencies to get a head start on carrying out programs and projects immediately,” Budget Secretary Florencio B. Abad said in a statement.
“In particular, also in the first quarter, the rate of fund utilization of key agencies shows an improvement in spending. The Department of Public Works and Highways reached 97 percent, compared to the 91 percent in 2015, while the Department of Health reached 94 percent, improving by 21-percentage points from 73 percent in the same period last year,” Abad added.
“With this development, we at the Department of Budget and Management are pleased that efforts to ramp up public spending since last year have shown substantial results. As budget reforms continue to make headway this year, we expect that spending will remain on track to drive further growth in the succeeding quarters,” the budget chief said.
