Budget deficit bloats in 9 months

MANILA, Philippines — The national government’s fiscal deficit widened to P378.2 billion in the first nine months of the year as the growth in its spending outpaced the increase in revenues, the Bureau of the Treasury (BTr) reported yesterday.

According to the latest cash operations report (COR) of the Treasury, the government’s fiscal deficit as of end-September rose by 78 percent to P378.2 billion from the P213.1 billion recorded the same period in 2017.

This was, however, five percent below the nine-month deficit target of P396.6 billion. The BTr said this also represents 72 percent of the P523.7 billion whole-year deficit ceiling.

For the month of September alone, the budget deficit reached P96.2 billion, 161 percent higher than the P36.9 billion posted the same month last year.

A deficit happens when the government’s expenditures exceed the revenue it generates.

For the first nine months of the year, the government’s revenues improved 17 percent to P2.11 trillion from the P1.8 trillion recorded the same period in 2017. This was also four percent higher than the P2.03 trillion revenue target for the January to September period.

The Bureau of Internal Revenue (BIR) accounted for bulk of the revenues, with collections amounting to P1.44 trillion. This was 11 percent higher than last year’s level of P1.3 trillion, but two percent below its target of P1.47 trillion.

Revenues generated by the Bureau of Customs (BOC) as of end-September also rose by 34 percent to P434.6 billion from P323.8 billion a year ago. The agency’s revenue was likewise four percent above its P417.5 billion program.

According to the BTr, the continued improvement in the revenue performance of the bureau could be attributed to the increased volume and value of importation, peso depreciation, and improved tariff classification and valuation.

Non-tax collections, for their part, accounted for P216.1 billion of total revenues, 33 percent up from last year’s P162.6 billion. Actual collections also exceeded its target of P125.5 billion by 72 percent.

Meanwhile, government disbursements from January to September amounted to P2.49 trillion, 24 percent up from the P2.01 trillion registered the same period last year.

This was also three percent higher as against the government’s spending target of P2.43 trillion for the nine-month period.

Productive government spending accelerated 26 percent to P2.22 trillion, while interest payments rose nine percent to P271.3 billion.

According to the BTr, interest payments in the first nine months of the year represented 10.9 percent of the total expenditures during the period, lower than last year’s ratio of 12.4 percent. Interest payments as a percentage of total revenues likewise declined year-on-year to 12.8 percent from 13.8 percent.

Excluding interest payments, the Treasury said the national government’s primary deficit as of Sept. 30 reached P106.9 billion, a reversal from the P35.9 billion primary surplus posted the same period last year.