MANILA, Philippines – With quicker government spending, Finance Secretary Carlos Dominguez III said the Philippines will hit its fiscal deficit target of 3% of the gross domestic product (GDP) this year.
The Philippine government has spent P2.796 trillion out of the P3.767-trillion national budget for 2018 for the first 10 months of the year, higher than last year's P2.241 billion.
Meanwhile, revenue collections from January to October this year stood at P2.1 trillion, or 3% short of target.
Speaking at a forum in Davao City, Dominguez said reaching the budget deficit target would be the "first in recent history."
"Now that we are moving ahead of our spending schedule, we are now being faulted for enlarging the budget deficit, when in fact, we said that our budget deficit is going to be 3% of GDP. And we [will] hit it on target this year, the first time ever in recent history," he said.
The year-to-date fiscal gap has ballooned to P438.1 billion, according to the Bureau of the Treasury.
For 2018, the country's economic managers have set a budget deficit cap of P523.6 billion, which is equivalent to 3% of GDP.
A budget deficit for the government happens when it spends more money (expenses) than it collects (revenues from taxes). Both are indicators of an economy's financial health.
The finance chief attributed the improved performance to investments in infrastructure, which amounted to P571 billion from January to September this year, or 46% more than last year. The spending figure is "7.2% above target," he said.
"We would like to inform Congress and the public that the bad old days of underspending, which the critics faulted the government for moving too slowly in getting the projects done, is now over," Dominguez said.
"The old problem of absorptive capacity has been solved. The mantra of fast and sure is being observed," he added.
For the month of September, a big chunk of expenditures went to current government operations at P219 billion.