Government sees below target budget deficit this year

MANILA, Philippines — The government expects to book a lower-than-expected budget deficit this year despite the spending catch-up plan arising from the delayed implementation of the 2019 national budget, according to the Department of Budget and Management (DBM).

Based on the medium-term fiscal program approved by the Development Budget Coordination Committee (DBCC) during their 177th meeting, the budget shortfall is expected to reach P610 billion, lower than earlier target of P624.4 billion for 2019.

For 2019, economic managers expect revenues to post a double-digit growth of 10.4 percent to P3.15 trillion from last year’s P2.85 trillion, while disbursements are expected to increase by 10.2 percent to P3.76 trillion from P3.41 trillion.

Earlier, Budget Undersecretary Laura Pascua said the government may still meet its P3.76 trillion disbursement target for the whole of 2019.

 “Based on the projections we are seeing, we may likely meet the disbursement target for the year. We think that despite the budget delay, agencies did their best to catch up,” Pascua said.

According to the latest data from the DBM, national government spending in the first 10 months has already reached P2.938 trillion, 5.1 percent higher than the P2.796 trillion recorded in the same period last year.

This is equivalent to about 78 percent of the government’s P3.76 trillion target.

“The uptick is mostly due to higher personnel services expenditures (up by P66.9 billion or 8.8 percent), allotment to local government units (up by P34.2 billion or 9.8 percent), and subsidy contribution (up by P32.4 billion or 25.6 percent),” the DBM said in a separate report.

However, the DBM said spending growth was tempered by the decline in infrastructure spending.

Latest data from the Bureau of the Treasury (BTr) showed the national government’s budget deficit amounted to P348.3 billion from January to October, narrower by 20.51 percent compared to the P438.1 billion recorded in the same period last year.

Government revenues grew by 9.8 percent to P2.59 trillion from P2.36 trillion, while expenditures went up by five percent to P2.94 trillion from P2.8 trillion.

The government had wanted a bigger budget deficit this year to increase spending on infrastructure and other public investments. However, expenditures have been affected by the delayed implementation of this year’s P3.7-trillion national budget.

The government expects the country’s budget shortfall to swell until 2022 as it would continue to spend more than what it generates. The deficit is expected to widen to P671.2 billion in 2020, P737 billion in 2021, and P811.2 billion in 2022.