Feb. in deficit but spending growth slows
THE GOVERNMENT saw its fiscal balance swing to a deficit in February that was nevertheless narrower than the year-ago gap, even as spending growth slowed, according to latest data from the Treasury bureau.
The report comes in the wake of the launch earlier this week of “Dutertenomics” -- the brand taken from the name of President Rodrigo R. Duterte for his administration’s economic strategy that seeks to hike revenues, partly through tax reforms, in order to support an aggressive infrastructure buildup until 2022.
The government collected P151.8 billion in revenues in February, up nine percent from P139 billion last year, with tax collections rising 12% to P138.8 billion from P123.9 billion.
The Bureau of Internal Revenue (BIR) accounted for 76.2% of total tax collections in February with P105.9 billion, 12% more than the P94.8 billion collected the previous year but one percent short of a P107.04-billion target set for that month.
The Bureau of Customs (BoC) -- the government’s second-biggest tax collector that accounted for 22.26% of total taxes -- raked in P30.9 billion, 14% more than a year-ago P27 billion.
State spending, however, edged up just a percent -- one of the Duterte administration’s slowest paces so far save for contractions in October and December -- to P175.6 billion in February from P173.6 billion a year ago, with interest payments growing 14% to P24.1 billion from 21.3 billion and “other” expenditures actually slipping a percent to P151.3 billion from P152.3 billion.
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In a telephone interview, Budget Secretary Benjamin E. Diokno said that spending should pick up in “summer months,” particularly “around April, May, June.”
February sent the fiscal balance to a P21.5-billion deficit that was 44% less than the P38.1-billion gap recorded in 2016’s first two months.
Revenues grew a tenth to P352.2 billion in the first two months from P321.2 billion a year ago, with tax collections rising 13% to P323.2 billion from P285.8 billion.
Expenditures on the other hand increased by four percent to P373.7 billion from P359.3 billion, with expenditures other than interest payments -- which were relatively flat at P66.6 billion from P66.9 billion -- growing five percent to P307.1 billion from P292.4 billion.
Sought for comment, Security Bank Corp. economist Angelo B. Taningco said in an e-mail yesterday that “the relatively mild government expenditure growth in both February and January-February was partly due to high base effects and also that infrastructure spending has not been gaining traction yet.”
The administration plans to increase spending on infrastructure to an equivalent of 7.1% of gross domestic product (GDP) by 2022 -- the year its term ends -- from a programmed 4.3% of GDP in 2015 and from 1.8% in 2010.
This year’s P3.35-trillion national budget programs spending on public infrastructure to increase 13.79% to P860.7 billion equivalent to 5.4% of GDP from P756.4 billion, or 5.1% of GDP, initially targeted for 2016.
The Department of Budget and Management reported last week that actual infrastructure spending increased by 42.8% year-on-year to P493 billion in 2016, but still fell 7.5% short of a downward-adjusted P533.1-billion budget.