THE Philippines registered a narrower budget deficit of P2.34 billion in October, signaling a case of underspending amid revenue growth, Department of Finance (DOF) data showed Monday.
Last month’s deficit shrank by 91 percent from P27.02 billion a year earlier, but analysts noted such development can be attributed to base effect and does not preclude an emerging trend in government spending.
The deficit in October was 96 percent narrower than the P75.32 billion recorded in September.
Rajiv Biswas, IHS Markit Asia Pacific chief economist, noted the October deficit reflected a combination of significantly lower expenditure and higher tax and non-tax revenue.
“Among the key factors contri buting to the lower level of government expenditure in October 2016 compared to the same month a year ago were base year effects. This was due to a spike in government expenditure in October 2015 partly due to special factors such as spending related to the APEC [Asia Pacific Economic Cooperation] Summit hosted in Manila in 2015,” he said.
Revenue rose by 7 percent year-on-year at P174.64 billion, while spending dropped 7 percent at P176.98 billion.
The Bureaus of Internal Revenue (BIR) and of Customs (BOC) collected P121.9 billion and P33.4 billion, respectively.
Tax collection of other offices posted a 98 percent increase at P2.3 billion from P1.1 billion. Non-tax revenue improved by over a quarter at P17.1 billion from P13.6 billion.
The Bureau of the Treasury reported an income of P4.9 billion, down 13 percent from P5.6 billion, while revenue reported by other offices went up 53 percent at P12.3 billion from P8 billion.
National Treasurer Roberto Tan noted the decline in the bureau’s revenue was due to lower income from government deposits with the Bangko Sentral ng Pilipinas and lower dividends from shares of stock in state-owned and -controlled corporations. Interest payments (IP) declined by 1 percent at P16.1 billion.
“This October deficit figure could be a one off and does not seem to constitute a downtrend,” said Bank of the Philippine Islands Vice President and lead economist Emilio Neri Jr.
Nevertheless, the October deficit helped widen the budget shortfall in the first 10 months of the year. In January-October, the deficit expanded to P216.04 billion from P52.57 billion year-on-year.
Revenue rose by 3 percent at P1.821 trillion in the same comparable period, while spending expanded by 12 percent at P2.037 trillion.
Net of interest payments, however, the government said it closed 10 months to October period with P49.8 billion in primary surplus, narrower compared a surplus of P219.3 billion a year earlier.