The government’s budget deficit widened 66 percent in 2015 to P121.7 billion from P73.1 billion in 2014, as public spending grew faster than revenue collection, the Treasury said Thursday.
“Relative to the economy, the deficit came in at 0.9 percent of GDP [gross domestic product], well below the 2-percent target,” the Treasury said.
Data showed the budget deficit swelled to P75.1 billion in December alone, as expenditures increased 9 percent to P238.7 billion and revenue collection declined 6 percent to P163.5 billion.
Finance officials said at P121.7 billion, the 2015 budget deficit was below the P283.7-billion target deficit for the year.
“For the past five years, consistently prudent and strategic fiscal management has afforded Filipinos a better future. Today, we have more fiscal firepower for multi-generational investments in our people, weaving stronger social safety nets and better connectivity links across the archipelago,” Finance Secretary Cesar Purisima said.
Data showed that excluding interest payments, the primary balance in 2015 yielded a surplus of P187.7 billion, or 24.4 percent lower than P248.1 billion primary surplus in 2014. Primary balance in the December alone resulted in a deficit of P53.7 billion.
The Finance Department said full-year government expenditures increased 13 percent in 2015 to P2.23 trillion while revenue collection rose 11 percent to P2.109 trillion.
The Bureau of Internal Revenue saw tax collections rise 8 percent in 2015 to P1.44 trillion, but missed the P1.67-trillion target by 14 percent.
Import duty collections by the Bureau of Customs dropped 0.5 percent to P367.5 billion, which was also below the P437-billion target.
Collection by the Bureau of the Treasury increased 18 percent year-on-year to P110 billion, surpassing the programmed collection by 81 percent. “This is due to higher income from BSF/SSF investments and dividends on shares of stocks held by the government,” the Treasury said.
Revenue from other offices reached P10 billion in December, bringing the full-year figure to P198.1 billion, up 78 percent year-on-year.
The Budget Department said the higher disbursements was led by a 30.7-percent growth in maintenance and operating expenditures and 25-percent increase in capital outlays.
“The 2015 spending figures show that the government has been able to reshape budget priorities toward allocating more resources to social and economic services. Higher disbursement in maintenance as well as capital outlays funded the expansion of programs in social services, defense, and road and transport infrastructure in 2015,” Budget Secretary Florencio Abad said.
Purisima said the tax-to-GDP ratio improved to 13.7 percent in 2015. “We have almost doubled government tax revenues in six years through through tax administration and enforcement reforms to improve collections and passing a landmark sin [excise] tax reform law last 2013. We also reduced interest rates with bolstered confidence in our credit rating, and reduced corruption in various levels of the bureaucracy, proving that good governance can indeed deliver solid wins in our balance sheet for our people,” he said.
Purisima said the next administration should consider engaging in genuine, comprehensive reform of the tax structure, better tax administration and enforcement.