MANILA, Philippines — The national government incurred a fiscal deficit of P558.26 billion in 2018, surpassing the revised ceiling set by economic managers for the period.
According to a document obtained by reporters, the national government’s fiscal deficit widened by 59.23 percent to P558.26 billion in 2018 from P350.6 billion in 2017.
The figure was higher than the revised deficit ceiling of P526.8 billion set by the Development Budget Coordination Committee (DBCC) in October last year.
A deficit occurs when the government spends more than the revenues that it generates.
Documents showed that revenues reached P2.85 trillion as of end-December 2018, 15.38 percent up from the P2.47 trillion recorded in 2017.
The figure was also 1.06 percent higher than the revised DBCC revenue program of P2.82 trillion.
Expenditures on the other hand rose by nearly 21 percent to P3.408 trillion in 2018 from P2.82 trillion in 2017.
This also exceeded the government’s revised disbursement target of P3.346 trillion.
The Duterte government has adopted an expansionary fiscal policy to fund its priority programs, including the Build Build Build infrastructure program, as well as social protection programs.
In line with this, the government’s deficit ceiling was set at three percent of the country’s gross domestic product (GDP) for 2018.
However, the DBCC, in its October 2018 meeting, revised the government’s 2018 fiscal program due to the delay in the implementation of some provisions under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
These provisions are the electronic receipts system and the fuel marking program.
This year, the fiscal deficit ceiling is targeted to increase to 3.2 percent of GDP, in order to fund key infrastructure projects of the government.
The deficit ceiling will then be brought back to three percent of GDP in 2020 until 2022.
In nominal terms, the spending target for 2019 was set at P3.78 trillion, while the revenue program was set at P3.159 trillion.
The Department of Finance (DOF) earlier said government spending will continue to be a growth driver for the economy, and is expected to reach 20.7 percent of GDP by 2022.