The government budget reverted to a deficit of P75.3 billion in September from a surplus of P32.6 billion in the preceding month due to increased spending, which analysts said was as a positive sign for the economy.
Compared with the year-earlier level, the deficit in September this year widened from a P22.1 billion gap, “as spending continued to gain traction,” the Bureau of the Treasury (BTr) said in a statement.
Revenue rose 1 percent year-on-year to P166 billion, while spending surged 30 percent to P241.3 billion.
The Treasury traced the huge increase in public expenditure for the month to the P20.475 billion payment to Philippine International Air Terminals Co. Inc. (Piatco) by the Department of Transportation. The payment was in compliance with a Supreme Court decision in April that the national government should pay the air consortium, by way of just compensation, for the expropriation of Ninoy Aquino International Airport (NAIA) Terminal 3.
The government has often been criticized for underspending, especially on the crucial infrastructure projects needed to support growth further.
“The accelerated pace of spending can be attributed to both the previous administration, which had been able to find a formula to accelerate spending since fourth quarter of 2015 and to the new government to have pursued strong spending activity,” said ING Bank Manila chief economist Joey Cuyegkeng.
“Revenue growth in September and the third quarter slowed and was slower than we expected,” he added.
Wider 9-mth gap
The September deficit widened the budget gap for the first nine months of the year. For January-September, the deficit expanded to P213.7 billion from P25.6 billion in the comparative 2015 period.
In the nine-month period, government revenues rose only 3 percent to P1.646 trillion from a year earlier, while spending expanded 14 percent to P1.860 trillion.
Netting out interest payments, however, the government said it ended the January to September period with a P36.1 billion primary surplus, though much narrower than the year-ago surplus of P230 billion.
GDP seen at low-end of forecast
Cuyegkeng said he expects third-quarter gross domestic product (GDP) to show growth of between 6 percent and 6.5 percent, or slightly on the lower side of the government’s forecast of 6.3 percent to 7.3 percent for the period.
“We expect full-year growth of 6.5 percent, which is in line with government’s forecast of 6.5 percent to 6.6 percent,” he added.