Infra buildup widens budget deficit by 96%

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 period.

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

In a statement, the Treasury noted the fiscal deficit as of November already accounted for 91 percent of the target P523.7 billion this year, 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, which would be a higher 3.2 percent—as it wanted to ramp up government expenditures, particularly on infrastructure, in line with its massive “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 11-month period 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 nontax revenues, which grew 16 percent from last year’s P2.25 trillion.

The revenues collected during the period 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 jumped 30 percent to P538.5 billion.

Nontax revenues rose 31 percent year-on-year to P258 billion as the Treasury’s income rose by a fifth to P103.6 billion.

“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 country’s budget deficit ballooned by 354 percent to P39.1 billion from only P8.6 billion during the same month last year.

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

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

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

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