2017 budget deficit narrows to P350.6B
The government last year exceeded its revenue goal but continued to underspend, although at a slower pace than in previous years, the latest Bureau of the Treasury data released Tuesday showed.
In 2017, the national government posted a budget deficit, which meant that the amount spent on public goods and services surpassed tax and non-tax collections, of P350.6 billion, 27-percent below the programmed P482.1 billion.
Last year’s deficit was also smaller than the P353.4-billion shortfall in 2016.
Expenditures climbed 11 percent to P2.82 trillion in 2017 from 2016’s P2.55 trillion, but fell below the P2.91-trillion target.
Sought for comment, Finance Secretary Carlos G. Dominguez III told reporters: “You know, it’s not like a sports car that when you step on the gasoline it goes right away. This one takes a little time for the government. We are moving in the right direction.”
Dominguez noted that underspending last year was narrower compared with preceding years.
“Last year was the first full year that we [the Duterte administration] were doing it, so there was definitely a big improvement from the previous years. This year, we’ll even do better,” Dominguez said.
The government nonetheless collected P2.47 trillion in tax and non-tax revenues last year, 2-percent higher than the P2.43-trillion goal.
Revenues in 2017 also jumped 13 percent from P2.2 trillion in 2016.
The take of the Bureau of Internal Revenue, the country’s biggest tax-collection agency, rose 13 percent to P1.77 trillion last year from 2016’s P1.57 trillion, although it narrowly missed its P1.78-trillion target.
In a statement, the Treasury said that the BIR’s 2017 collection was net of the P8.5-billion tax refund paid to various claimants for the year such that the total tax take would rise to P1.78 trillion including the refunds.
The import duties and other taxes collected by the Bureau of Customs, meanwhile, increased by a faster 16 percent to P458.2 billion from P396.4 billion in 2016, albeit also slightly below the P459.6-billion goal.
The BOC’s tax refunds in 2017 reached P2.6 billion such that its total gross collection was a higher P460.8 billion.
Last year’s budget deficit was equivalent to 2.2 percent of gross domestic product (GDP), lower than the 3-percent ceiling earlier set by the Duterte administration’s economic managers.
The government plans to partly finance its ambitious “Build, Build, Build” infrastructure program through an expansionary fiscal policy entailing a wider 3-percent-of-GDP deficit until 2022, compared with the previous administration’s annual program of 2 percent.
In April last year, economic managers unveiled the administration’s “Dutertenomics” thrust of “Build, Build, Build” that they claimed would usher in a “golden age of infrastructure.” The National Economic Development Authority (Neda) earlier increased to 75 from 55 previously the number of so-called flagship, “game-changing” projects that the administration aims to start and complete before 2022.
Of these flagship projects, 53 projects have a cumulative cost of P1.58 trillion. A total of up to P9 trillion will be spent by the Duterte administration over the next six years to build vital infrastructure such that infrastructure spending will rise from P847.2 billion or 5.3 percent of gross domestic product this year to P1.84 trillion or 7.3 percent of GDP in 2022.
