THE government on Wednesday said that it overshot its spending target in the first nine months of the year on account of higher interest payments, personnel services cost and advances to government-owned and -controlled corporations.
Expenditures in the first three quarters reached P658.3 billion, or P14 billion higher than the programmed P644.3 billion. Spending also grew 9.8 percent over last year’s P599.3 billion.
In the July to September period, the government spent P234.9 billion, representing a 9.6-percent increase over last year.
Interest payments alone ate up P78.02 billion in the third quarter, up 34.4 percent over last year’s P58.06 billion.
Constructive cash inflow from foreign-assisted projects for imported equipment and goods expanded by P3.2 billion owing to faster-than-expected agency use.
The increase in capital spending was also owing to the pilot testing of the new payment scheme for the Department of Public Works and Highways’ (DPWH) projects.
Higher spending on personnel services, meanwhile, was attributed mainly to payment on arrears on the retirement benefits of policemen and soldiers, as well as higher a diems given to election personnel.
Net advances to GOCCs also exceeded the programmed level, with P8.9 billion advances given to major corporations. Some P6.5 billion in advances to the National Power Corp. are expected to be repaid this year.
Revenues, on the other hand, grew 13.1 percent to P516.4 billion, allowing the government to keep the fiscal gap within target.
The budget gap in September amounted to P30.98 billion, raising the year-to-date deficit to P141.9 billion, which is P1.4 billion lower than the programmed P143.3 billion.
At a press conference, Finance Secretary Juanita D. Amatong said the full-year deficit target of P197.8 billion is “very much attainable.”
She said the latest figures should send a strong signal to credit rating agencies that the government is observing fiscal discipline.
The Bureau of Internal Revenue, which accounts for about 80 percent of government revenues, collected P114.7 billion in the third quarter, up 12.6 percent compared with the same period last year.
The Bureau of Customs generated P31.5 billion, or 23.5-percent higher compared with last year. Collections in the third quarter exceeded the target by P6.2 billion.
Meanwhile, net financing for the July to September period amounted to P149.6 billion, bringing the net financing in the first nine months of the year to P228.7 billion.
But time may not be on the side of the government if the proposal of the American Chamber of Commerce Inc. (AmCham) is to be followed.
In a statement, the AmCham made it clear that the country’s budget should be balanced in three years and not five.
The AmCham is also in favor of removing the Priority Development Assistance Fund (PDAF) of lawmakers and in phasing out the government’s subsidy of the cash-trapped National Power Corp. and other government-owned and -controlled corporations.
John Forbes, chair of the AmCham legislative committee, also urged the government to set a target of 50 percent lower population growth and “carry out a plan to achieve it.”
One measure, which Forbes is pushing for, is the provision of incentives to poor families who have only two children.
In its Road map II More Foreign Investment,” AmCham said that if the Philippines is serious about its effort to attract more foreign direct investments (FDIs), it needs to implement necessary reforms in other areas of concern.
Poor infrastructure and massive corruption is weighing too heavily against the Philippines’ campaign for more FDIs.
–With Niel V. Mugas
By Armie Margaret Lee