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Saturday, November 18, 2017

Gov’t budget deficit below H1 ceiling

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By Chino S. Leyco

The national government’s end-April budget deficit remained well below programmed levels in the first semester of the year as state revenues outpaced the snail’s pace growth in public spending.

Based on the 2017 Quarterly Fiscal Program approved by the Development Budget Coordination Committee (DBCC), the government’s P30.2-billion financing gap incurred in January to April only represents a fifth of the P143.81 billion ceiling set for the first six-months.

To meet the program, the Duterte administration requires a deficit spending of at least P113.61 billion from May to June, or P56.8 billion per month, a far cry from the government’s monthly average of P7.5 billion gap in the first four-months.

The lower-than-expected budget deficit is attributed to weaker public spending during the January to April period.

The DBCC programmed P1.336 trillion in expenditures in the first half, but the actual disbursed budget as of April was only at P798.4 billion, equivalent to nearly three-fifths of the total target.

The government now needs to spend at least P537.6 billion, or P268.8 billion each month, in May and June to hit the DBCC goal, but the current average monthly expenditures stood only at P199.6 billion.

Government revenues, on the other hand, is moving at a fastest pace than expenditures.

According to the DBCC 2017 program, which was adopted by the economic team last Friday, the government is targeting a total revenue collection of P1.192 trillion in January to June.

At end-April, the government has already raised P768.3 billion in revenues, equivalent to more than three-fifths of the first-half goal set by President Duterte’s economic managers.

To reach target, the Bureau of Internal Revenues (BIR), the Bureau of Customs, and other income generating agencies need to collect at least P211.8 billion a month, or P423.7 billion in the final two-months of this semester.

Data from the Bureau of the Treasury showed the average monthly revenue take as of April was at P192 billion.

DBCC document showed the government exceeded its revenue target in the first-quarter by four percent, while public spending fell short of the goal by five percent. The state incurred a budget gap of P83 billion in the three-month period, below the P133.29 billion ceiling.

The government registered a P52.8 billion budget surplus in April that dragged down the four-month fiscal deficit number.

For the three-month period ending June, the economic team approved a deficit scenario of P10.5 billion. Revenues are projected to reach P680.2 billion, but lower than the disbursements target of P690.7 billion.

The BIR is tasked to collect P515 billion in April to June, while Customs is expected to contribute P113.7 billion to state coffers, the Treasury bureau with P22.3 billion and other offices with P29.08 billion.

In the third-quarter, the DBCC is estimating a budget deficit of P201.4 billion as revenues are expected to amount to P599.7 billion, short of the P801.1 billion spending plan for the period.

The government’s main tax agency has a collection target of P434.9 billion in the third-quarter, Customs with P119.2 billion, the Treasury bureau with P13 billion, and other offices with P32.51 billion.

Lastly, the Duterte administration programmed a fiscal gap of P136.8 billion in the final three-months of 2017 with P771.1 billion in expenditures outstripping P634.24 billion in revenues.

The BIR is targeting P466.1 billion tax collections in the fourth-quarter, while Customs is tasked to raise P122.8 billion, the Treasury bureau is expected to generate P11.3 billion and other offices with P31.92 billion.

The government plans to end 2017 with a P482.08 billion budget deficit, equivalent to 3.0 percent of gross domestic product (GDP). Total disbursements were programmed at P2.908 trillion, and revenues at P2.427 trillion.

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