PH gov’t deficit rises to P27B in October

MANILA, Philippines – The national government recorded a fiscal deficit of P27 billion ($572.58 million) in October, the Department of Finance (DOF) reported Wednesday, December 9.

The figure is up P24.5 billion ($519.51 million) from the same month last year, as spending growth overtook revenue collections for the fourth straight month, the DOF noted.

This brings the year-to-date deficit to P52.6 billion ($1.11 billion), 56% higher over the same period in 2014.

A deficit is incurred when the government’s total expenditures exceed the revenue it generates, excluding money borrowed.

Regarded as a positive, a deficit is viewed to help countries climb out of economic recession, as economist John Maynard Keynes said. But fiscal conservatives argue that governments should avoid deficits and instead push for a balanced budget regime.

Revenue growth

Total revenues for October hit P163 billion ($3.46 billion), recording 7% year-on-year growth with Bureau of Internal Revenue (BIR) collections and the Bureau of Treasury (BTr) income offsetting lower collections from the Bureau of Customs (BOC) and other sources.

BIR collections for the month reached P115.8 billion ($2.46 billion), increasing by P14
billion ($296.73 million) or 14% year-on-year. This was also the fifth time the BIR was able to post double digit year-on-year growth for the year.

Total BIR collections as of end-October amounted to P1.19 trillion ($25.22 billion), up by 8% over the same period in 2014.

The BOC recorded a year-on-year contraction for October, with collections of P32.5 billion ($688.78 million), down 5% from the same month last year. Year-to-date, BOC revenue narrowly grew by 0.3% mainly due to the strong growth in March and June.

Total BTr income amounted to P5.6 billion ($118.68 billion) for the month, up by 14% from the
previous year due to higher remittance of dividends on shares of stocks held by the national government and share in Philippine Amusement and Gaming Corporation (PAGCOR) income.

Cumulative total BTr income grew 13% over the previous year to P97.4 billion ($2.06 billion).

Year-to-date collections are up by 12% from 2014, totaling P1.77 trillion ($37.54 billion).

Collections from other offices, meanwhile, decreased by P2.2 billion ($46.62 million) or 19% to P9.2 billion ($194.92 million).

But the DOF said that despite such a decrease, year-to-date collection still grew by 93% or P86.3 billion ($1.83 billion) over the same period last year.

Disbursements

National government disbursements hit P190 billion ($4.03 billion) in October, 23% or P35.2 billion ($745.97 million) higher than comparable figures last year. This is also the second highest year-on-year growth in spending for the year, next to the 25% growth registered in July.

Year-to-date expenditures are at P1.82 trillion ($38.57 million),13% higher than spending for 2014.

Interest payments for the month declined by 4% year-on-year to P16.1 billion ($341.22 million)
due to lower domestic payments. As a percentage of total expenditures, cumulative interest payments for 2015 is at 15% compared to 17% a year ago.

Netting out the interest payments from expenditures, the national government recorded a P10.9 billion ($231.04 million) primary deficit for October, a reversal of the primary surplus recorded in the same period last year.

Year-to-date balance still resulted in a primary surplus of P219.3 billion ($4.65 billion), down 9% or P21.2 billion ($449.38 million) from the 2014 level. – Rappler.com

$1 = P47.18