PH gov’t hits P13.75B surplus in H1

MANILA, Philippines – Despite increased efforts to speed up spending in June, government expenditures still fell below program by 14% in the first semester. leading to a surplus of P13.75 billion ($300.33 million) in the first half of 2015.

The strong disbursement performance in June, which brought the monthly deficit to its highest level, so far, this year at P72.7 billion ($1.59 billion), was not enough to offset underspending in the first 5 months.

Based on the latest Cash Operations Report released Thursday, August 6, the expenditure performance in June saw an improvement from the previous months, as the government spent P236.25 billion ($5.17 billion), 24% above program and 17% higher year-on-year.

In comparison, expenditures fell below program by 21 % in January; 13% in February; 6% in March; 35% in April; and 26% in May.

For the first semester, government expenditures totaled P1.07 trillion ($23.40 billion), lower than the target of P1.25 trillion ($27.32 billion). It increased by 9%  from P988 billion ($21.60 million) in 2014.

The lower-than-programmed spending in the first half of the year resulted in a surplus of P13.75 billion ($300.33 million), a reversal of the deficit cap of P155.08 billion ($3.39 billion) for the said period.

Meanwhile, revenues in June totaled to P163.58 billion ($3.57 billion), 1% above program and 18% up year-on-year.

Year-to-date, the government’s collections totaled to P1.09 trillion ($23.82 billion), 1% below target. But it saw a 16% increase from the amount generated in the same period in 2014.

The Bureau of Internal Revenue’s collections in the first half reached P705.9 billion ($15.42 billion), growing 10% from the previous year.

The Bureau of Customs’ total haul for the first semester reached P178.6 billion ($3.90 billion), 3% higher than in 2014.

Underspending

The Aquino administration has been criticized for underspending since it took office in the middle of 2010, though officials said they are pursuing efforts to speed up government spending. (READ: SONA 2015: Aquino gov’t continues to underspend)

The underspending has also been cited as a factor that dragged the Philippine economy’s growth in recent years, with the 2015 first quarter gross domestic product (GDP) slowing down to 5.2%. (READ: PH GDP growth slows to 3-year low: 5.2% in Q1 2015)

The Department of Budget and Management earlier said that since 2015 started, it has implemented measures to clear bottlenecks and structural weaknesses that contributed to government underspending.

For instance, all agencies and departments will now have a single Bids and Awards Committee (BAC), as well as the procuring units to support them. This is in line with the marching orders set by President Benigno Aquino III in Administrative Order No. 46 and Republic Act No. 9184 or the Government Procurement Reform Act.

Agencies with major procurements requirements and associated complexities, like the Department of Public Works and Highways and the Department of Education, may also create multiple BACs with the appropriate procurement support.

Almost half of the 2014 spending deficit was revealed to be due to structural weaknesses, which includes issues of capacity of agencies and government-owned and-controlled corporations.

But Finance Secretary Cesar V. Purisima said in a statement Thursday that the Philippines “will continue to keep its fiscal house in excellent health as it weathers the turbulence in the global economy caused by a number of recent developments.”

“Pumping productive spending with adequate fiscal space is expected to help propel even higher broad-based growth. We are confident that improving revenue collections and the highly liquid tone of the market can respond to our funding requirements,” Purisima said. – Rappler.com

$1 = P45.77

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