The government’s budget deficit in the first eight months declined 57.3 percent to P120.401 billion from P282.014 billion a year ago, as the growth in revenue collection outpaced expenditures, data from the Bureau of the Treasury show.
Revenues increased 9.5 percent in the eight-month period to P2.091 trillion from P1.9 trillion in the same period last year. This also surpassed the January to August 2019 program of P2.089 trillion.
Spending from January to August barely rose by 0.9 percent to P2.211 trillion from P2.191 trillion a year earlier.
The Treasury said tax revenues grew 9.8 percent in the first eight months to P1.879 trillion from P1.712 trillion a year ago. The Bureau of Internal Revenue collected P1.452 trillion, up 10.6 percent from P1.313 trillion in the same period last year. This was 4.4 percent short of the January to August program of P1.519 trillion.
The Bureau of Customs collected P411.247 billion in the eight-month period, 7.2 percent higher than P383.544 billion a year ago. This was, however, 2.7 percent lower than the program for the first eight months of P422.483 billion.
The Bureau of Treasury generated P107.909 billion in the first eight months, up 30 percent from P83.318 billion a year earlier. The BTr’s income was 96 percent higher than the P55.076 billion program for the first eight months.
ING Bank Manila senior economist Nicholas Mapa said earlier the government started the second half of the year on the “right foot” following a decent pickup in government expenditure by 3.4 percent in July while revenue collection remained strong at 9.3 percent.
The government posted a budget deficit of P558.26 billion in 2018, above the P528.8-billion goal and the 2017 result of P350.6 billion.
Fitch Solutions, a unit of Fitch Group, said the Philippines was expected to run a wider budget deficit in 2020, on greater reliance on government stimulus to drive economic growth.
Fitch Solutions took note of the budget balance in the second quarter which came at -2.3 percent of GDP, slightly narrower than -2.4 percent of GDP a year earlier.
“The narrower budget balance in the first half of 2019 is attributed to strong revenue generation and delayed expenditure by the government, following the protracted process in passing the 2019 budget,” it said.
“However, we expect fiscal stimulus to ramp-up towards the end of the year given the cash-based approach to the 2019 Budget. The cash-based approach seeks to ensure spending is done within the fiscal year by setting a deadline of year-end for projects and contracts,” Fitch Solutions said.