‘Build, Build, Build’ widened budget deficit by 96% to P477.2B at end-November

The budget deficit almost doubled to P477.2 billion at end-November as the growth in government spending on public goods and services, especially infrastructure, outpaced revenue collections during the first 11 months.

The latest Bureau of Treasury data released Thursday showed that the 11-month deficit ran by the national government was 96-percent wider than the P243.5 billion posted a year ago.

In a statement, the Treasury noted that the fiscal deficit as of November already accounted for 91 percent of the 2018 program worth P523.7 billion, a cap equivalent to 3 percent of gross domestic product (GDP).

The Duterte administration had programmed yearly budget deficit ceilings equivalent to 3 percent of GDP—except in 2019, as the program was a slightly higher 3.2 percent of GDP—as it wanted to ramp up government expenditures, particularly on infrastructure, in line with the ambitious “Build, Build, Build” program.

From January to November, disbursements reached P3.095 trillion, up 24 percent from P2.494 trillion last year.

For the entire year, the government had programmed to spend P3.37 trillion.

Net of interest payments for borrowings and debt, 11-month expenditures increased by a faster 26 percent year-on-year to P2.775 trillion.

The share of interest payments to total expenditures in the first 11 months declined to 10.3 percent from a year ago’s 12.9 percent, the Treasury noted.

End-November total expenditures exceeded the P2.618 trillion in combined tax and non-tax revenues, which grew 16 percent from last year’s P2.25 trillion.

The revenues collected during the first 11 months composed 92 percent of the P2.846-trillion full-year target, the Treasury said.

The Bureau of Internal Revenue’s (BIR) tax take as of November climbed 11 percent year-on-year to P1.801 trillion, while the Bureau of Customs’ (BOC) collections of import duties and other taxes during the same period jumped 30 percent to P538.5 billion.

Non-tax revenues rose 31 percent year-on-year to P258 billion in the first 11 months, as the Treasury’s income rose by a fifth to P103.6 billion.

“The year-to-date Treasury total income exceeded last year’s collection by 20 percent or P17.1 billion, largely due to higher income from national government deposits, dividend collections from shares of stocks from GOCCs [government-owned and/or -controlled corporations] and national government share from Pagcor [Philippine Amusement and Gaming Corp.] income,” it said.

“The Treasury’s revenue performance was spectacular as its year-to-date collections surpassed its full-year program of P55.8 billion by 86 percent or by P47.8 billion,” it added.

In November alone, the budget deficit ballooned by 354 percent to P39.1 billion from only P8.6 billion during the same month last year.

Expenditures last month grew 19 percent year-on-year to P298.8 billion, surpassing the 7-percent growth in revenues to P259.7 billion./ac

Interest payments jumped by a fifth to P24.7 billion in November “mainly due to discounts of reissued bond series and the valuation effect of year-on-year peso depreciation,” the Treasury explained

Removing the interest payments showed an 18-percent increase in expenditures to P274.2 billion, which the Treasury said was because of “the national government’s aggressive ‘Build, Build, Build’ program and investment in human capital.”

The BIR collected P192 billion last November, up 7 percent year-on-year, while the BOC’s haul inched up 3 percent to P47.9 billion.

The Treasury’s November income rose by a tenth to P4.7 billion, which it attributed to “higher income from national government deposits, income from BSF/SSF [bond sinking fund/securities stabilization fund] investments, fidelity bond premia, and remittance of the national government share from Pagcor.”