Budget gap widens but still below target
The government’s budget deficit slightly widened to 0.9 percent of the economy last year, but still lower than programmed as state spending remained below the target.
The Department of Finance yesterday said the year 2015 ended with a P121.7-billion deficit, 66 percent bigger than the P73.1-billion deficit posted in 2014.
The end-2015 deficit, however, was 57 percent lower than the P283.7 billion programmed, which was 2 percent of the gross domestic product (GDP), as the government aimed to ramp up expenditures on public goods and services.
Government spending totaled P2.231 trillion last year, up 13 percent from P1.982 trillion in 2014 but 13-percent below the P2.559 trillion that the government must have spent. This means some projects and programs intended to support economic growth were not implemented in 2015.
In a statement, the Department of Budget and Management attributed the “robust” increase in expenditures last year to “higher disbursements in maintenance and operating expenditures growing by 30.7 percent, and capital outlays increasing by 25.1 percent.”
“The 2015 spending figures show that the government has been able to reshape budget priorities toward allocating more resources to social and economic services. Higher disbursement in maintenance as well as capital outlays funded the expansion of programs in social services, defense, and road and transport infrastructure in 2015,” Budget Secretary Florencio B. Abad said.
“There was a marked increase in spending relative to GDP as the expenditure effort reached 16.8 percent for the year compared to 15.7 percent in 2014,” the Bureau of the Treasury said in a separate statement.
In the meantime, revenues generated by the government last year jumped 11 percent year-on-year to P2.109 trillion—the first time the combined collections of tax and non-tax revenues by the Bureaus of Internal Revenue (BIR), Customs (BOC), the Treasury and other offices exceeded the P2-trillion mark.
The total revenue take was nonetheless 7-percent below the P2.275-trillion target for 2015.
The taxes collected by the BIR last year amounted P1.433 trillion, up 7 percent year-on-year. The country’s biggest tax-collection agency, however, failed to achieve its goal to collect P1.674 trillion in taxes in 2015.
The BOC’s actual collections of import duties and other taxes slid by 0.47 percent year-on-year to P367.5 billion mainly on cheaper oil, missing its collection target of P436.6 billion. “As the price of oil fell to record-low levels in 2015, (the BOC’s) collections on oil sagged by as much as 31 percent. This was compensated for by non-oil collections, up 9.3 percent from year-ago levels,” the DOF explained.
As a result of the higher tax collection performance in 2015, the tax-to-GDP ratio slightly improved to 13.7 percent from 13.6 percent in 2014.
The revenue effort or share of total revenue to the GDP, meanwhile, rose to 15.9 percent from 15.1 percent in 2014, as the Treasury saw its income climb by 18 percent year-on-year on the back of the transfer of P62.5 billion in coco levy funds last year.
