Spending remained slow in first 9 months

The Aquino administration posted a budget deficit of P18.5 billion in September, narrower than the monthly target, with the government on track to beat its fiscal deficit goal this year mainly on slow spending.

The finance department said in a statement that the programmed shortfall in September was P42.41 billion.

Economic officials have said that the government might end the year with a budget gap of at least 2.6 percent of GDP, below the target of 3 percent, despite plans to increase spending in the remaining months of the year.

The government generated revenues of P104.34 billion in September but spent P122.84 billion for the month.

Main tax agency Bureau of Internal Revenue’s (BIR) September collection amounted to  P66.55 billion, below its P67.04-billion monthly goal but above year-ago revenue. Revenue at the Bureau of Customs, the second-biggest tax agency, generated P22.6 billion, about a fourth below goal but 12 percent above the year-ago level.

Revenues for the first nine months reached P1 trillion, down 2.3 percent compared with the goal. Spending from January to September amounted to P1.07 trillion, also down 16 percent compared with the target.

“I was looking at a deficit of P23 billion in September. We expected spending to pick up a little bit more. We should look at it in terms of the overall size of the deficit, and I think the government still has fairly good level of flexibility to maneuver going forward as external risk has increased,” said Song Seng Wun, regional economist at CIMB-GK Research in Singapore.

“Overall, in the last couple of months, risk has risen and I think it’s not too late in terms of the government needing to pump-prime the economy if they have to. But I would say any pump-priming activities will probably only be implemented when we have much more clearer signs or evidence of slowdown in developed economies,” the economist added.

“There’s still sufficient momentum to underpin the growth and revenue stream for the coming couple of months. There are obviously risks in 2012. But because of the fairly responsible manner in managing government finances over the last couple of years, I think the government has got plenty of elbow room to maneuver.”—Reuters, with a report from Ronnel W. Domingo