Gov't posts wider deficit in September, but on track to meet targets

MANILA, Philippines — The Duterte administration more than doubled its budget deficit in September after revenue growth slumped to a two-year low, but its performance so far this year remained on track to meeting its year-end goals.

According to the Bureau of the Treasury on Monday, the deficit hit P96.2 billion, wider than the P36.9 billion recorded in the same period a year ago.

The deficit—which indicates the government spent more than it earned during a particular period—was recorded amid slower growth in revenues that month, data showed.

Revenues inched up only 1 percent to P202.4 billion in September, matching the growth rate in September 2016 when the Duterte government was just two-months-old in office.

The revenue growth rate also pales in comparison the 21-percent uptick recorded in the same period a year ago.

Broken down, revenue growth slowed after the Bureau of Internal Revenue recorded an 8-percent year-on-year decline in its collections to P130.6 billion.

The Treasury, in a statement, explained BIR's tax take dropped due to "high-base effect" the previous year when a tax settlement worth P17.6 billion from local cigarette firm Mighty Corp. was added to government coffers.

President Rodrigo Duterte himself accepted Mighty's offer for a tax settlement after it was slapped with tax evasion cases for using fake tobacco excise tax stamps.

Mighty was eventually sold to Japan Tobacco after paying the government P30 billion to avoid a getting sued. 

On the other hand, the Bureau of Customs continued to benefit from a weak peso in September. Data showed its collections went up 27 percent year-on-year to P51.1 billion.

Other government offices, which collect revenues mainly through service fees as well as privatization proceeds, increased collections 23 percent to P1.8 billion during the same period.

On the flip side, government continues to fast-track spending, recording its third straight month of double-digit growth.

Disbursements increased 26 percent year-on-year to P298.6 billion. Broken down, actual government spending outpaced those used for debt interest payments at 26 percent to 24 percent, respectively.

Despite a wider deficit in September, the Treasury noted that the government continues to operate below its deficit program for the first three quarters of the year.

The budget gap amounted to P378.2 billion, up 78 percent year-on-year but still below the P396.6 billion programmed for the period, figures showed.

Revenues went up 17 percent and are 4-percent above-target from January to September, while disbursements rose 24 percent while falling 3 percent above goal due to "productive government spending."