MANILA, Philippines - The country’s budget deficit narrowed to P2.5 billion in October as tax revenue grew at a faster pace than public spending.
In a report, the Department of Finance said the latest figure was 92.6 percent or P2.7 billion less than the P5.2-billion shortfall in September and 77 percent lower than the P11.2-billion deficit incurred in October last year.
Anemic spending was blamed for weak economic productivity during the third quarter, prompting the region’s analysts to downgrade their growth forecasts for the Philippines.
The October deficit brings the 10-month funding gap to P33.6 billion, which is still well within the program. The amount was 70 percent lower than the P112.5-billion shortfall in the same period last year.
Revenues for October were 13 percent higher while outlays rose by only six percent to P154.8 billion.
This brings the 10-month collections to P1.6 trillion, up 13 percent from the year ago period while total disbursements reached P1.61 trillion or an increase of 6.4 percent year on year.
Finance Secretary Cesar Purisima attributed the lower than expected deficit to good governance reforms initiated by the Aquino administration that resulted in steady growth in collections from the state’s two major revenue-generating agencies.
“This notable improvement in collections has been the fruit of automation of tax processes, a heightened campaign against smugglers and tax evaders, and sustained reforms, especially in the Bureau of Customs. With the Philippines taking on a more active role in the global fight against tax evasion, through joining the OECD Committee on Fiscal Affairs and the appointment of the Internal Revenue Commissioner Kim Henares as a UN international tax expert, we are expecting a further boost in our revenue-generating capacity in the future,” Purisima said.
The Bureau of Internal Revenue generated P1.1 trillion in revenues in the first 10 months of the year, 11 percent more than the previous year’s haul.
The Bureau of Customs, on the other hand, contributed P299.9 billion during the period or an increase of 18.8 percent year-on-year. It posted 10 straight months of double digit growth thanks to wide-ranging reforms implemented in the middle of the year.
Revenues from the Bureau of Treasury amounted to P87.1 billion, 21.5 percent higher than the year earlier period.