PH fiscal position swings to deficit

The government’s fiscal position reverted to a deficit in November to post its largest budget gap in two months, although the Marcos administration still looks safe from breaching its deficit ceiling for 2024.

The Marcos administration recorded a budget deficit of P213 billion in November, more than double the P93.3 billion shortfall posted a year ago, data from the latest cash operations report of the Bureau of the Treasury (BTr) showed.

A budget deficit occurs when the state spends beyond its means during a period, contrary to a surplus that happens when revenue collections outpace expenditures.

READ: Philippines’ budget deficit at P213 billion in November

Figures showed the November deficit was a reversal from the P6.3 billion surplus posted in October. It was also the biggest budget hole recorded since last September.

That brought the 11-month budget shortfall to P1.2 trillion, 5.30 percent smaller than a year ago.

This accounted for 79 percent of the Marcos administration’s revised deficit limit for 2024, which was set at P1.52 trillion or 5.7 percent of gross domestic product (GDP).

As it is, meeting its fiscal targets is important for President Marcos, as this would boost the government’s chance to attain the coveted “A” credit rating.

Keeping the budget gap below the ceiling would also help the state avoid being punished by the market via higher interest rates.

For this year, the Marcos administration is aiming to borrow a total of P2.57 trillion from creditors abroad and at home to plug its budget hole.

Revenues eased

Data showed the budget balance swung to a deficit in November after revenues slightly eased by 0.61 percent to P338.3 billion.

This was due to lower nontax collections compared with a year ago when the central bank remitted P23.8 billion in additional dividends to the national government.

That, in turn, brought the 11-month receipts to P4.1 trillion, marking a 15.16 percent annualized increase. The BTr said the government is still “on track” to meet its revised revenue target of P4.38 trillion this year.

By collecting agencies, the Bureau of Internal Revenue (BIR) generated P247.6 billion in revenues last month, up by 12.7 percent.
This pushed up BIR’s cumulative collections to P2.7 trillion versus the bureau’s full-year goal of P2.8 trillion.

The Bureau of Customs raked in P72.4 billion in November, down by 1.69 percent due to lower collections from tariffs and excise taxes, as slowing global inflation brings down import costs. Since January, Customs generated P850 billion, still below the P940-billion goal for this year.

Expenditures, meanwhile, climbed by 27.13 percent to P551.3 billion in November, sending the 11-month spending to P5.28 trillion against the full-year program of P5.91 trillion.