The national government incurred a budget deficit of P3.5 billion in January 2016, as both revenues and public spending rose, the Finance Department said Thursday.
Data from the Treasury showed the budget shortfall in January was 46-percent lower than the P6.5-billion deficit registered in January 2015. Netting out interest payment, the primary balance yielded a surplus of P42.1 billion in January, or 6 percent lower than the primary surplus of P44.9 billion posted in the same month last year.
“We’re starting the last year of this administration on a good note and in great shape. Both revenue and expenditure sides of our finances are sustaining a healthy amount of growth. We remain in a firm position to finance the commitments in our social contract with the Filipino people. As always, fiscal sustainability is top of mind,” said Finance Secretary Cesar Purisima.
Government revenues in January grew 9 percent to P182.2 billion from P166.652 billion in January 2015 while government expenditures increased 7 percent to P185.7 billion.
The Bureau of Internal Revenue collections increased 7 percent year-on-year to P129.7 billion while Customs collections increased 6 percent to P31.1 billion. The Bureau of Treasury’s income declined 11 percent to P7.930 billion. Collections from other offices surged 88 percent to P13.56 billion.
The government plans to boost state spending by more than 30 percent to help shield the economy from a global slowdown this year. Economic Planning Secretary Emmanuel Esguerra said the record proposed expenditure this year would support economic growth of as much as 7.8 percent.
“We are a small country in an open economy but we have some degree of freedom and that is your government spending,” Esguerra said. “That is being ramped up. Sure, the global environment is not great but you have your domestic sources of growth.”
The Budget Department said it would roll out a three-year program to boost the country’s infrastructure spending.
The program contains the pipeline of strategic projects needed to sustain rapid economic growth. These projects include basic infrastructure services and facilities linked to climate resiliency, competitiveness, agricultural sustainability, governance, security, and bridging gaps in poor, hazard-prone, and emerging growth areas.
“Closing the gap between planning and budgeting could lead to GDP growth rates between 9 and 11 percent within 15 years,” Budget Secretary Florencio Abad said, citing a 2016 International Monetary Fund working paper exploring the macroeconomic effects of improving public infrastructure in the Philippines.
A study commissioned by the Trade Department showed the country needed P5.7 trillion in infrastructure in infrastructure spending under the next administration to maintain an average annual growth of 5 percent.
Enrico Basilio of the United States Agency for International Trade’s Advancing Philippine Competitiveness Project said the logistics industry’s forward linkage in the Philippines lagged behind other countries in the region.
He said the country should maintain infrastructure spending at 5 percent of the gross domestic product. With Othel V. Campos, Bloomberg