CLARK – As the jump in government spending outpaced the increase in revenues it collected during the first 10 months, the budget deficit widened by 87 percent to P438.1 billion.
During the Sulong Pilipinas 2018-Philippine Development Forum, Budget Secretary Benjamin E. Diokno and Finance Secretary Carlos G. Dominguez III both said the robust expenditures on public goods and services were proof the Duterte administration already addressed the problem of under-spending.
The latest Bureau of the Treasury data released Monday showed the end-October fiscal deficit increased from P234.9 billion in the same 10-month period last year.
In a statement, the Treasury noted the deficit as of October already accounted for 84 percent of the P523.7 billion programmed for the entire 2018.
Expenditures at end-October climbed 25 percent to P2.796 trillion from P2.241 trillion a year ago.
Net of interest payments, primary disbursements from January to October grew 27 percent to P2.501 trillion from last year’s P1.972 trillion.
Tax and non-tax revenues in the first 10 months increased 18 percent from P2.007 trillion a year ago to P2.358 trillion.
The tax take of the two biggest revenue agencies—the bureaus of Internal Revenue (BIR) and of Customs (BOC), rose 12 percent year-on-year to P1.609 trillion and 34 percent to P490.6 billion, respectively, at end-October.
“In the bad old days of under-spending, critics faulted the government for moving too slowly in getting the projects done. Now that we are moving ahead of our spending schedule, we are being faulted for enlarging the budget deficit, which incidentally was our target, which incidentally was what the business community asked us,” Dominguez said in a speech.
The Duterte administration had set a budget deficit cap equivalent to 3 percent of gross domestic product (GDP) this year and a slightly wider 3.2 percent of GDP next year as it rolls out its ambitious “Build, Build, Build” infrastructure program.
Dominguez said “the old problem of absorptive capacity has been solved” as “the mantra of fast and sure is being observed.”
For his part, Diokno said in a separate speech the higher actual government spending was “clear proof that the ‘Build, Build, Build’ program is firing on all cylinders.”
“Let me add that the P571 billion spent on infrastructure in the first nine months of this year is 46-percent higher than the same period last year. This is also significantly higher by P225.5 billion or 65.3 percent compared to the last full year of the Aquino administration in 2015. In 2015, infrastructure spending amounted only to P345.3 billion—20-percent below their target. Set against the infrastructure investments we are seeing now, the previous administration delivered an anemic performance,” Dominguez said.
“The increased investments in infrastructure are also matched by improved revenues. In the first ten months of this year, total tax collections of the BOC and the BIR amounted to P2.1 trillion, 16-percent higher than the same period last year. This is just slightly 3-percent short of target. Compare that with the full-year tax collection performance in 2015, our tax collection for the first 10 months of the year is significantly higher by P298.66 billion or 16.58 percent. Tax collections of the main revenue-generating agencies for the last full year of the Aquino administration in 2015 amounted to P1.8 trillion—15-percent below their target,” he added. /kga