A STRONG fiscal performance is needed to at least keep the gross domestic product growth at around 6.5 percent in the third quarter, ING Bank Manila senior economist Joey Cuyegkeng said Monday.
Cuyegkeng said in a report the August numbers did not disappoint but the growth in fiscal spending was “milder than we expected.”
“… August headline and core spending were both up 14 percent year-on-year from 10 percent and 6 percent in 2016, respectively. July-August average headline and core spending growth rates were both at 12 percent, faster than the pace in 2016 [which was 7 percent for headline spending and 11 percent for core spending],” he said.
Cuyegkeng had expected a close to 20 percent year-on-year growth in August spending, adding the lower-than-anticipated performance might have to do with some accounting and booking delays.
“The improvement should help overall economic growth to remain close to 6.5 percent in the third quarter despite manufacturing growth indicators posting some moderation,” he said.
He also said the August’s fiscal surplus might have something to do with not just improvement in collections but also with one-off revenue gains likely to be related to tax settlement inflows.
“The result of the strong revenue collections was a fiscal surplus of P29 billion, which is more or less in line with the previous year’s outcome. The eight-month fiscal balance is P176.2-billion deficit, worse than the eight-month 2016 deficit of P138.4 billion. The higher deficit is likely a reflection of better utilization of the programmed spending,” he said.
The Bureau of the Treasury said the government posted a P28.8-billion fiscal surplus in August 2017, driven by faster year-on-year growth in expenditures of 14 percent alongside revenue expansion of 10 percent.
The surplus, however, was slower by 12 percent compared with the surplus of P32.6 billion in the same period last year.
This brought fiscal deficit in the first eight months to P176.2 billion, up 27 percent from the P138.4-billion gap in the same period last year.
Total revenues in August amounted to P230.4 billion, up 10 percent from the collections recorded a year earlier. Year-to-date, collections rose 8 percent from last year’s to P1.601 trillion, with tax revenues making up 91 percent of the total collections.
Collections of the Bureau of Internal Revenue reflected strong year-on-year growth at 9 percent to reach P171.7 billion for the month. Year-to-date growth is also at 9 percent, with collections as of August amounting to P1.157 trillion.