Higher expenditures in the first 10 months of theyear account of the pandemic resulted in the 170.09-percent year-on-year rise in the government’s budget gap to P940.6 billion.
Data released by the Bureau of the Treasury showed that revenues during the 10-month period contracted by 8.41 percent to P2.37 trillion over year-ago’s P2.58 trillion.
On the other hand, expenditures rose by 12.75 percent to P3.312 trillion from year-ago’s P2.937 trillion.
In terms of contribution to the government’s coffers, the Bureau of Internal Revenue, which collects about 70 percent of total tax revenues, contributed P1.6 trillion, a 10.38-percent drop year-on-year.
The Bureau of Customs contributed P448.6 billion, down by 14.98 percent compared to the year-ago level.
For October alone, total revenues fell by 14.22 percent year-on-year to P228.2 billion while expenditures slipped by 6.84 percent to P289.6 billion.
This resulted in a budget gap of P61.4 billion, up by 24.56 percent a year ago.
BIR’s revenues declined by 14.62 percent to P152.1 billion and that of BoC dropped by 12.25 percent to P50.6 billion.
Economists said government spending last October is lower than in the previous months, which they attributed to fiscal management as economic managers have set a budget deficit cap of about 9.6 percent of gross domestic product this year.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said this budget deficit ceiling is a “positive sign in terms of fiscal discipline/performance”.
“(This is) a delicate balancing act amid the need to increase government spending for various Covid-19 (coronavirus disease 2019) programs/priorities especially for the most vulnerable sectors,” Ricafort said.
He said further easing of quarantine measures in a bid to reopen the economy would be a plus on tax revenue collections.
“However, this could be offset by the risk of relatively slower economic recovery/rebound from lockdowns that could still potentially lead to reduced tax revenue collections on a year-on-year basis and may lead to relatively wider budget deficits, with reduced government revenues vis-a-vis the need to increase government spending for various Covid-19 programs,” he said.
ING Bank Manila chief economist Nicholas Mapa noted that government expenditures slowed by 6.8 percent last October in line with fiscal authorities’ bid to reign in the budget deficit.
“Nonetheless, we expect the downtrend in spending to be sustained until year-end, depriving the freefalling economy much-needed fiscal stamina to recover from the pandemic,” he said.
Mapa said the recent typhoons would definitely hit this year’s output, and he expects the fourth quarter print to be weaker than the -11.5 percent in the third quarter.