The share of debt to the country’s economy slid to 45.4 percent at the end of the first 11 months of last year as the gross domestic product (GDP) continued to grow faster than government liabilities, according to the Department of Finance’s chief economist.
“A combination of robust revenues and debt management measures led to the continuing drop in the debt-to-GDP ratio, an improvement from [the end-November 2014] ratio of 46.5 percent,” Finance Undersecretary Gil S. Beltran said in an economic bulletin last week.
Treasury data also released last week showed that the national government’s outstanding debt rose by 4.1 percent year-on-year to P5.953 trillion as of November, but the GDP was expected to have expanded at a faster rate during the fourth quarter.
The economy should have grown by at least 6.9 percent during the October to December period to reach what economic managers earlier referred to as the “realistic” growth rate of 6 percent for 2015.
Nominal GDP growth during the first three quarters, meanwhile, stood at 5.1 percent.
However, Beltran said the ratio of external debt to GDP was up to 15.7 percent as of end-November from 15.5 percent the previous year due to the peso depreciation.
As for domestic debt, its share to the economy went down to 29.7 percent in November last year from 31 percent in the previous year, Beltran said.
The sustained rise in revenues as well as government spending during the first 11 months also improved the revenue and expenditure efforts, or their respective shares to the economy.
The revenue effort increased by 1 percentage point year-on-year to 15.98 percent at end-November, as Beltran cited an “exceptional” hike in the collection of taxes and other non-tax revenues.
Treasury data showed that the total end-November revenues grew by 12.1 percent year-on-year to P1.945 trillion, albeit 7 percent below the target.
Although dwarfed by the take from taxes, non-tax revenues jumped by 55 percent to P274.6 billion due to the transfer of P60.1 billion in proceeds from the privatization of coconut levy-funded assets, bringing the end-November non-tax revenue effort up to 2.26 percent from 1.53 percent previously.
As for tax revenues, their share to the economy inched up to 13.72 percent as of end-November from 13.45 percent in the previous year. The amount of taxes collected during the first 11 months rose 7.2 percent to P1.671 trillion.
The tax effort of the Bureau of Internal Revenue, the country’s largest tax collection agency, improved to 10.9 percent as of November from 10.53 percent previously on the back of an 8.8-percent year-on-year rise in collections to P1.327 trillion.
As for the Bureau of Customs, its tax effort slightly slid to 2.71 percent from 2.8 percent a year ago, as its collections of import duties and other taxes grew by a mere 1.6 percent to P329.8 billion “as oil taxes dropped due to lower international prices,” Beltran noted.
Net of the taxes levied on oil, the BOC’s collections from non-oil goods increased by around 12 percent, Beltran said.
Spending on public goods and services during the first 11 months of 2015 grew at a faster pace of 13 percent year-on-year to P1.992 trillion, but the amount was 15 percent lower than the program as underspending persisted.