Data shows govt still underspending – analyst
THE national government registered a budget surplus of P6.03 billion in November even as both revenue collection and expenditure saw double-digit increases in the month, data released by the Department of Finance (DOF) showed on Thursday.
A market analyst said the latest data means that the government is not spending as much as it should–a factor that has been blamed for last year’s slower economic growth.
The government recorded a budget surplus of P6.03 billion in November, a reversal of October’s P27.02 billion deficit but narrower than the P6.83 billion surplus recorded a year earlier.
Expenditures amounted to P171.42 billion while revenues reached P177.45 billion.
The November budget performance brought the year-to-date deficit to P46.55 billion, well below the P247.49-billion target for the period and the full-year deficit target of P283.7 billion.
Total January-October 2015 disbursements hit P1.992 trillion while revenues totaled P1.945 trillion.
The Finance department noted that November revenues were up 12 percent from a year earlier and year-to-date growth was also at 12 percent.
The Bureau of Internal Revenue (BIR) collected P136.37 billion, 12 percent higher compared to November 2014 and taking its 11-month tally to P1.327 trillion, a 9-percent increase from the same period a year ago.
“Hitting our infrastructure spending goal of 5 percent to GDP [gross domestic product]this year is no walk in the park; we still have a lot of catching up to do compared to our peers. Thus, we remain firm in our fiscal discipline. We will continue developing our tax administration and enforcement capacity,” Finance Secretary Cesar Purisima said.
The Bureau of Customs, meanwhile, collected P29.06 billion, up 18 percent from last year, taking the January to November result to P329.78 billion.
The Finance department said while the persistent downtrend of oil prices caused January-November collections on oil to drop by 32 percent, non-oil collections continue to look encouraging with growth of over 11 percent.
The Bureau of the Treasury contributed P3.1 billion in November, taking its year-to-date total to P100.54 billion, a 12 percent increase. Collections of other offices rose 8 percent to P8.92 billion in November.
Double-digit rise in spending
National government disbursements expanded by 13 percent in November to P171.42 billion from a year ago.
Interest payments dropped 12 percent to P15.99 billion, while other expenditures rose 17 percent to P155.43 billion.
“Prudent and proactive liability management is reaping dividends for future generations of Filipinos. Our grandchildren will live to have a much lesser burden on their backs. This is a future we want to secure through a sound fiscal position and a resilient economy,” Purisima said.
An equities analyst meanwhile said the government’s underutilization of the budget is still evident.
“This latest round of data underlines what has been the bane (or boon?) of the Aquino administration—spending unable to hit programmed levels,” said Justino Calaycay Jr., analyst at Accord Capital Equities Corp.
The DOF data showed that November state spending was 23 percent short of the P223.24 billion program for the month. Year-to-date, expenditures missed the P2.336 trillion target by 15 percent.
Calaycay noted that budgets were designed to fund programs geared at what the government describes and qualifies as “inclusive growth.”
But underutilization of the budget, “as is fairly evident in the less-than-programmed spending, means that certain programs are not being efficiently run and funded, for whatever reason,” he said.
“This could be one factor that has dragged on 2015 GDP, which as of the third quarter hasn’t even hit 6 percent,” he added.
On a positive note, he said the Philippines still has a healthy fiscal position that may enable the country to keep its credit rating scores, which is important in light of rising interest rates in the United States.
“It allows us to borrow at a lower cost if it becomes necessary,” he said.
Optimistic on growth
Budget Secretary Florencio Abad welcome the news that government spending improved in November, noting that this marked “a continuous double-digit growth for the sixth consecutive month since June,” he said.
Abad said gradual efforts to address issues in underspending—such as the General Appropriations Act-as-Release Document, advanced procurement of goods and services, and the creation of Full-time Delivery Units (FDUs)—have produced positive results.
“As we expect agencies to fine-tune the schedule of their disbursements this year, we look forward to seeing more of its impact in the country’s fiscal performance,” he said.
Abad said the government remains optimistic that economic growth will further accelerate in the first quarter of 2016 with the comprehensive release of the budget, faster implementation of projects before the election ban, and the greater push to deliver public goods and services as soon as possible.
“We hope that these developments will motivate the bureaucracy further as we work towards strengthening the reforms we have instituted in the past five years—leaving a legacy of a budget that is transparent, accountable and responsive to the needs of the people,” he said.