9-month budget gap narrows to P101B

Finance Secretary Cesar Purisima. FILE PHOTO

The national government incurred a smaller budget deficit of P18.6 billion in September, down 34 percent from a year ago, as the growth in revenue collection outpaced that of expenditures.

The fiscal performance during the month indicated that the government is poised to register a full-year budget gap that is below the P238-billion ceiling, which is equivalent to 2 percent of the country’s gross domestic product.

Revenues rose by 21 percent to P127.3 billion last month while expenditures increased by just 6 percent to P146 billion.

“The September report shows an even healthier picture of the government’s fiscal performance as revenues posted a strong increase over last year’s collections,” Finance Secretary Cesar Purisima said in a statement.

Fiscal figures for September brought the deficit for the first three quarters of the year to P101.2 billion, down year-on-year by 3 percent.

Revenues for the first nine months amounted to P1.27 trillion, up 13 percent from a year ago. Expenditures for the same period rose 12 percent to P1.37 trillion.

The increase in revenues was attributed largely to the Bureau of Internal Revenue’s antitax evasion drive, under which it has subjected various sectors to tighter tax audits.

The BIR likewise comes out with weekly print advertisements on top taxpayers to encourage tax compliance and to reveal huge income earners who are potentially tax evaders.

But despite the rise in revenues in the three quarters from a year ago, these were 1.6-percent below the target for the period. Similarly, expenditures for the first three quarters were below the programmed spending set for the period by 4.9 percent.

The Department of Finance said the deficit remained manageable and would not disrupt the downtrend in the government’s debt burden.

The declining debt burden, or the ratio of the government’s outstanding liabilities to the country’s gross domestic product, was cited as one of the reasons why the country got investment grade ratings this year.

It was reported earlier that the government’s outstanding debt of about P5 trillion was equivalent to 50 percent of the country’s GDP. The debt-to-GDP ratio has consistently fallen since hitting a peak of 74 percent in 2004. The decline came as the economy’s rate of expansion exceeded the increase in the government’s outstanding debt.