Duterte admin exceeds budget deficit ceiling in 2019

The national government’s budget deficit in 2019 exceeded the Duterte administration’s fiscal gap ceiling as public expenditure spiked in the latter part of last year as “catch-up” for the delay in the passage of the 2019 budget.

Data from the Department of Finance (DOF) showed that the national government fiscal balance stood at a deficit of P660.2 billion, equivalent to 3.55% of the country’s gross domestic product (GDP).

This overshot by 0.3% the fiscal gap ceiling of 3.25% of GDP.

A budget deficit means expenditures exceeded revenue growth for a given period.

“The rise in the national government deficit beyond the government target should not adversely affect the country’s credit rating as fiscal stimulus was needed to shore up the country’s growth to a level closer to its 6.3% 10-year GDP growth average,” the DOF said in its economic bulletin.

Last year’s P660.2-billion fiscal gap is also 18.3% wider than the P558.3-billion deficit recorded in 2018.

Expenditures amounted to P3.797 trillion, up 11.4% from P3.408 trillion year-on-year.

The growth in government spending resulted from “catch-up expenditure plan totally reversed the residual effects of the four and-a-half month delay in the approval of the General Appropriations Act by Congress and the election ban especially in the last quarter when expenditures grew by 27.4% year-on-year.”

“The growth in expenditures led to a higher national deficit which settled at 3.55% of GDP, exceeding the targeted deficit by 0.3 percentage point,” the DOF said.

On the other hand, national government revenues grew 10.1% to P3.137 trillion from P2.850 trillion in 2018 on the back of 10.2% growth in tax revenues at P2.827 trillion and non-tax revenues at P93.9 billion.

“This is due to TRAIN and tax administration reforms,” the DOF said.

The Finance department said the early approval of the 2020 budget will enable the public sector projects to be implemented on time this year.

“This will moderate the negative impact of the Taal eruption and the global uncertainties arising from the coronavirus outbreak,” it said. — BM, GMA News