Extra cash to allow Duterte govt to boost infra spending – analyst
The government of President Rodrigo Duterte posted its first budget surplus in August, which an analyst said would give his economic managers more leeway to boost spending on infrastructure projects for the rest of the year and in 2017.
The surplus hit P32.6 billion in August—more than double the P15 billion surplus recorded in the same month of 2015—with revenue collection outstripping expenditure on the back of “prudent spending and strong tax payments,” the finance department said.
“The higher collection should allow the government more confidence going into next year’s spending program—with the commitment to raise the infrastructure component to around 7 percent ( of GDP) by 2022,” A&A Securities analyst Justino Calaycay Jr. said in an e-mailed reply to questions.
Revenues rose 18.6 percent to P209.6 billion in August from a year ago, while spending went up 9.5 percent to 177 billion pesos.
For the first eight months of the year, the government had a deficit of P138.4 billion, lower than P170.98 billion deficit in January-July, due to the surplus in August. It is also less than half of the government’s P388.87 billion deficit for the whole of 2016, giving the government more elbow room to fund its infrastructure projects.
The government plans to spend nearly P632 billion for infrastructure such as roads and bridges this year, around 50 percent more than last year’s P431.6 billion budget. Next year, infrastructure spending is pegged at P890 billion.
Building more infrastructure facilities will help spur growth and attract much-needed foreign investments.
The Philippines has been lagging behind its Asean neighbors in luring foreign direct investments. Last year, net FDI flows to the Philippines reached $5.72 billion, below Indonesia’s $16.91 billion, Malaysia’s $11.28 billion, Thailand’s $8.02 billion, Singapore’s $61.28 billion, and Vietnam’s $11.8 billion.
In January to August, government revenues amounted to P1.481 trillion, up 3 percent from a year earlier, while spending rose 12 percent to P1.619 trillion.
Netting out interest payments, the government ended the first eight-month period with a P78.8 billion primary surplus.
“The numbers by itself is good as it means the new administration is keeping to the prudent spending tack of the Aquino regime,” Calaycay said in his email reply.
However, he pointed out that the Duterte administration is still operating under the budget prepared by its predecessor, making it “hostage” to what has already been on the budget as passed by the previous Congress.