MANILA, Philippines - Ahead of a poll ban on spending for public projects, the Aquino administration started the year with a narrower budget deficit as disbursements growth slowed to a nine-month low, the government reported yesterday.
The budget gap totaled P3.5 billion in January, 46 percent lower than last year’s level, the Bureau of the Treasury said.
Broken down, revenues grew nine percent to P182.2 billion, while expenditures expanded seven percent to P185.7 billion.
In particular, disbursement growth was the slowest since April last year when a contraction was recorded. The government caps deficit at P298.6 billion this year.
Still, Finance Secretary Cesar Purisima said: “We’re starting the last year of this administration on a good note and in great shape.”
“Both revenue and expenditure sides of our finances are sustaining a healthy amount of growth,” Purisima said.
But Nicholas Antonio Mapa, economist at Bank of the Philippine Islands, was not impressed. “We needed government to spend since 2011 and yet they’ve been unable to sustain the budding growth momentum they posted in second half of 2015,” Mapa said in an e-mail.
On revenue side, the Bureaus of Internal Revenue (BIR) and Customs increased their collections seven and six percent, respectively. The agencies account for around 90 percent of state earnings.
Budget Secretary Florencio Abad, meanwhile, blamed agencies and their procurement processes. “It could be due to weak linkage between planning and budgeting, which we are actually working on now,” he said.
Roderick Patagan, research director at the Institute for Development and Econometric Analysis, had a different view, saying spending slowed because of lower interest payments.
Broken down, actual agency spending rose 15 percent to P140.11 billion last month, while debt settlements dropped 11 percent to P45.59 billion.
“At this point, it’s too early to tell whether public spending will factor significantly in the first quarter GDP (gross domestic product) figures,” Patagan said in a separate e-mail.
Public projects not obligated by March 25 could no longer be pursued until a new administration takes over by June.