THE national government budget deficit widened in November from the preceding month and wiped out a surplus from a year earlier, with public spending rebounding strongly in the 11th month of the year, the Bureau of Treasury (BTr) said.
The deficit grew to more than P19.1 billion in November from P2.34 billion in October, and reversed a P6 billion surplus recorded in November 2015, BTr data showed.
The turnaround in November reflected the Duterte administration’s decision to accelerate government expenditure on infrastructure and social spending, according to an analyst.
The BTr data showed that revenue for the month rose 18 percent year-on-year to P209.2 billion, while spending surged 33 percent to P228.4 billion.
The government had set a cap on budget deficit for this year of 2.7 percent of gross domestic product (GDP).
Rajiv Biswas, IHS Markit Asia Pacific chief economist, said while the budget deficit for full-year 2016 is expected to come in below the government cap of 2.7 percent of GDP, the gap could still widen significantly from the 2015 levels.
For next year, however, Biswas sees government spending on infrastructure rising, resulting in a further widening of the budget deficit.
“The government is planning to ramp up infrastructure spending further in 2017, which is expected to push the fiscal deficit to an estimated 3 percent of GDP,” he said.
The Duterte administration is expecting to see a widening of budget deficit next year as it plans to spend P860 billion on infrastructure under its approved national budget for 2017, equivalent to 5.4 percent of GDP for that year.
“The Philippine economy does suffer significant competitive disadvantages due to its weak infrastructure, and a medium-term program to improve infrastructure through a combination of government infrastructure spending, public-private partnerships and private financing for infrastructure are a key priority for long-term economic development,” Biswas said.
The Bureaus of Internal Revenue (BIR) and Customs (BOC) collected P156.8 billion and P40.2 billion, respectively, in November. Tax collection by other offices showed a 180-percent increase to P1.5 billion from P500 million.
Non-tax revenue, however, contracted 7 percent to P10.7 billion from P11.5 billion. The Treasury bureau reported an income of P4.2 billion, up 35 percent from P3.1 billion, while revenue reported by other offices eased 22 percent at P6.5 billion from P8.4 billion.
In terms of government spending, the BTr said about 9 percent of November expenditures went to interest payments (IP), reaching P19.6 billion, but managed P5.4 billion in IP savings.
The November deficit helped widen the budget shortfall by fivefold in the first 11 months of the year. In January-November, the deficit expanded to P235.2 billion from P46.5 billion a year earlier.
Cumulative revenue rose by 4 percent year-on-year to P2.030 trillion, while spending expanded by 14 percent to P2.265 trillion.
Net of interest payments, however, the budget yielded a P50.2 billion primary surplus at the close of the 11-month period, or 79 percent narrower than a surplus of P241.3 billion posted a year earlier, the DoF said.