Budget deficit jumps 190% to P353b
The government’s budget deficit jumped 190 percent last year to a five-year high of P353.4 billion from P121.7 billion in 2015, as the Duterte administration increased spending in the second half.
Data from the Bureau of Treasury showed the 2016 deficit was 9 percent lower than the revised program of P388.9-billion shortfall for the year.
“The outturns reflect strong expenditure growth of 14 percent resulting from the initiatives of the new administration to ramp up public spending for the second semester, outpacing the 4-percent increase in revenue collections,” the Treasury said.
The Treasury said relative to the economy, the deficit was still within the 2.7-percent revised target, coming in at 2.4 percent of the GDP. This was significantly higher than the 0.9 percent deficit-to-GDP ratio recorded in 2015, and the highest level posted in the last five years.
Revenue collections rose 4 percent in 2016 to P2.195 trillion from P2.109 trillion in 2015, but fell short of the revised target of P2.256 trillion.
Government expenditures jumped 14 percent to P2.549 trillion in 2016 from P2.230 trillion in 2015.
“Tax collections grew by 9.1 percent, faster than the GDP in 2016, reflecting improved efficiency. Tax effort inched up to 13.7 percent from 13.6 percent in 2015. Total revenue collections amounted to 15.2 percent of GDP, just 0.3 percent short of the 15.5 percent revised target and 0.5 percent below the 15.8 percent revenue effort last year,” the Treasury said.
Full-year collections of the Bureau of Internal Revenue rose 9 percent to P1.567 trillion from a year ago, but missed the revised program of P1.62 trillion.
Customs posted an 8-percent growth in collections last year to P396.4 billion, but also missed the target of P409 billion.
The Bureau of Treasury’s income declined 8 percent last year to P101.7 billion from P110 billion a year ago. “The decline was due mainly to the lower income from investments and national government deposits. Lower guarantee fee collection and dividend remittance also weighed on the year-on-year performance,” it said.
Government disbursements reached P283.6 billion in December bringing the full-year total to P2.54 trillion. Compared to 2015, total expenditures grew 4 percent or P318.7 billion from the 2015 level, but missed the revised target of P2.64 trillion by 4 percent.
Interest payments for December amounted to P19.1 billion, or 11 percent lower than the December 2015 level and 24-percent behind the P25.1-billion program for the month.
“This was mainly due to base effects from the timing of payment for domestic interest payments in 2015. Total IP for 2016 amounted to P304.5 billion generating savings of P23.3 billion against the P327.7 billion program for the year,” the Treasury said.
Net of interest payments, the national government achieved a P49-billion primary deficit for 2016, a reversal of the P187.7-billion primary surplus recorded a year ago. This is still behind the program by 20 percent or P12.2 billion.
The Duterte administration plans to spend P7 trillion for the country’s infrastructure sector over a period of six years, considered the most ambitious in history. This year alone, the government plans to spend P860 billion for public infrastructure.