The budget deficit widened in October from a year earlier, government data showed on Wednesday, as state spending grew faster than revenues.
The P21.8-billion shortfall for the month was significantly higher than the P2.3 billion posted last year, documents obtained by reporters showed, but was lower compared to the September deficit of P36.9 billion.
Government revenues rose by 17 percent to P205.1 billion from P174.6 billion a year earlier, while expenditures grew by 28 percent to P226.9 billion from P177 billion.
The Bureau of Internal Revenue (BIR) accounted for the bulk of collections at P142.5 billion, 17 percent higher compared to the year-earlier P121.9 billion.
The Bureau of Customs netted P42.9 billion—a 29-percent gain from last year’s P33.4 billion—while other offices contributed P1 billion, bringing total tax revenues for the month to P186.5 billion.
Non-tax earnings, meanwhile, totaled P18.6 billion, with the Bureau of Treasury bureau contributing P7.6 billion—up 56 percent.
Other offices contributed P11 billion, down 11 percent from last year’s level.
The bulk of government expenditures, meanwhile, was for items classified as “others,” which rose by 28 percent to P206.4 billion. Interest payments totaling P20.4 billion, up 27 percent year on year, accounted for the rest of the government’s expenditures for the month.
In a press briefing, Budget Secretary Benjamin Diokno said the 28 percent growth in government disbursements was the highest growth recorded so far this year. It also was a reversal from the 6.9-percent contraction posted for the same month last year as well as the 1.8 percent drop in September 2017.
“Higher expenditures for social services by the DSWD (Department of Social Welfare and Development),
transportation and equipment by the BFP (Bureau of Fire Protection) and PNP (Philippine National Police), and road infrastructure by the DPWH (Department of Public Works and Highways) buoyed government spending for the period”, he said.
Land Bank of the Philippines market economist Guian Angelo Dumalagan attributed the October budget deficit to the government’s aggressive spending and tax collection campaign.
“The budget deficit widened from a year ago as the government became more aggressive in financing its plans and programs in strong contrast to the perceived underspending in the prior months,” he said.
“However, income improved from last year’s level due to increased revenue collection from the BIR, which may have been buoyed by the government’s campaign to urge large tax payers to settle their deficiencies,” he added
October’s results led to a cumulative shortfall of P234.9 billion for the first 10 months of the year, higher than the P216-billion gap during the comparative 2016 period.
January to October revenues grew 10 percent year-on-year to P2 trillion from P1.82 trillion while year-to-date expenditures registered growth of 10 percent to P2.24 trillion from P2.03 trillion.
“Other” expenditures rose 11 percent to P1.97 trillion, while interest payments recorded flat growth at P269.4 billion.
Diokno said the 10 percent public spending growth for January to October is also an improvement from the 8.3 percent growth recorded for the first nine months of the year.
“Government spending is expected to further strengthen for the remaining two months of the year due to the acceleration of program/project implementation, provision of the year-end bonus of government employees, and requests for payment by contractors/creditors before the year ends,” he said.
The Budget chief said the improvement in public spending will continue to support our growth momentum following the 6.9 percent gross domestic product growth in the third quarter this year.
“The government will not let up in its efforts to accelerate growth in order to reach our overarching goals of building an economy that serves everyone and leaves no one behind,” he said.
Meanwhile, netting out interest payments, the government recorded a P1.4-billion primary deficit in October, down 110 percent from last year.
Year-to-date, the primary balance hit a surplus of P34.5 billion, narrower than last year’s P49.8-billion surplus.