Debt-to-GDP ratio improves to 45.3%
THE SHARE of debt to the economy dropped to 45.3 percent at the end of the first nine months on the back of a narrower budget deficit and a sustained economic expansion, the Department of Finance’s chief economist said.
“A combination of robust revenues and lower deficit led to the continuing drop in the debt-to-GDP [gross domestic product] ratio to 45.3 percent in September, an improvement from last year’s ratio of 46.4 percent,” Finance Undersecretary Gil S. Beltran disclosed in an economic bulletin issued last week.
As of end-September, both the domestic and external debt-to-GDP ratios went down to 29.6 percent (from 30.5 percent a year ago) and 15.7 percent (from 15.9 percent), respectively, Beltran said.
As the government spent more on public goods and services—which was still below program—the expenditure effort improved to 17.1 percent at end-September from 16.1 percent last year.
Government spending in the same period grew by 12 percent to P1.6 trillion from P1.5 trillion last year.
Expenditures slightly exceeded revenues at the end of the first nine months, resulting in a fiscal deficit of P25.5 billion or 0.27 percent of the nominal GDP that was worth P9.5 trillion during the period.
“Compared with the target deficit equivalent to 2 percent of GDP, the end-September actual deficit of 0.27 percent shall enable government to provide fiscal space to push economic growth to higher levels during the last quarter, even with the ongoing global financial volatilities and threats from the El Niño phenomenon,” Beltran said.
Since the “exceptional” growth in collection of taxes and other revenues outpaced economic expansion, the revenue effort or share of revenues to the economy further inched up to 16.8 percent at the end of the first nine months from 15.7 percent a year ago, Beltran added.
“Revenues grew by 12.6 percent in the first three quarters of 2015, outstripping the 5.1-percent growth in nominal GDP. Both tax and non-tax revenues outgrew nominal GDP,” he noted.
Total revenues jumped to P1.6 trillion as of end-September from P1.4 trillion a year ago.
The amount of taxes collected by the Bureaus of Internal Revenue and Customs as well as other government offices climbed by 6.4 percent to P1.4 trillion at end-September from P1.3 trillion a year ago.
“The tax effort also rose by 0.2 percentage point to 14.2 percent due to tax administration improvements,” Beltran said.
End-September non-tax revenues, meanwhile, increased by 64.7 percent due to the P60.1 billion proceeds from the privatization of coconut levy-funded assets. Ben O. de Vera
