In a sign that the government is quickly catching up on spending targets, the budget deficit widened to P60.9 billion in November alongside a surge in spending.
But the impact of underspending because of late 2019 budget approval by Congress is still being felt as the 11-month budget deficit narrowed by 14.3 percent to P409.1 billion from P477.2 billion in the same period in 2018.
A Cabinet budget group had reduced the budget deficit cap to P610 billion from P624.4 billion although the revised ceiling was still 3.2 percent of gross domestic product (GDP). It was in line with plans to ramp up spending, especially on infrastructure.
In November alone, disbursements jumped 22.4 percent to P365.6 billion, outpacing revenue of P304.7 billion in tax and non-tax which rose by 17.4 percent, according to the Bureau of Treasury.
The November budget deficit, as a result, widened by 55.6 percent from P39.1 billion in 2018.
Including interest payments, government spending in November climbed by 27.1 percent to P348.3 billion.
The government’s two biggest tax-collection agencies also increased their November collections. The Bureau of Internal Revenue (BIR) posted a 20.8 percent revenue jump to P232.1 billion, its “best growth performance of the year,” according to the Treasury in a report.
The Bureau of Customs (BOC), on the other hand, collected 5.2 percent more taxes, or P50.4 billion.
From January to November, spending rose 6.7 percent to P3.3 trillion, while total revenue grew by a faster 10.6 percent to P2.8 trillion.
Excluding interest payments for 11 months, cumulative spending increased 7.1 percent to P2.9 trillion, boosted by the government’s “catch-up performance,” the Treasury said.
Primary deficit, excluding interest payments, stood at P77.4 billion by end November which was some 50.8 percent narrower than P157.2 billion in 2018.
The government underspent P1 billion a day between January and April 2019 as it operated under a reenacted 2018 budget. This was the result of lawmakers failing to pass the 2019 budget on time as they bickered over pork barrel funds that they can pocket.
Duterte signed the P3.7-trillion 2019 budget only in mid-April.
This prompted the Duterte economic team to launch a “bold” spending catch-up plan which required major infrastructure agencies—the Department of Public Works and Highways (DPWH) and Department of Transportation (DOTr)—to accelerate spending on P803-billion worth of projects until end of 2019.
Revenues were not far behind. The BIR breached its P2-trillion collection target by end of November. The BOC collection grew 7.4 percent.