Although the government intended to spend as much as it could in the first three months to optimize this year’s growth, fiscal officials on Monday reported instead of a budget deficit 60 percent lower year-on-year to only P33.5 billion.
This development could prove a problem down the line given that fiscal programming mandates for the deficit to widen as part of the broader goal to sustain growth for the long haul.
This is also proof last year’s spending restraints, which Budget Secretary Florencio B. Abad traced to “lack of coordination and planning,” have not been effectively removed and are therefore a continuing threat to the growth blueprint.
The whole point to widening the deficit in lock step with the target would help ensure sufficient public funds were actually spent on critical infrastructures the $272-billion economy needs to sustain the growth momentum over the medium term.
Instead, the actual budgetary shortfall was P50.6 billion lower than programmed, and P64.6 billion narrower than fiscal officials planned.
Nevertheless, Finance Undersecretary Gil Beltran, quickly brushed aside the disappointing deficit numbers, saying the disbursement of funds typically slows in the first quarter.
“Disbursement in the first few months starts slowly every year,” Beltran, also lead economist at the Department of Finance, said.
The lower-than-anticipated deficit was traced to improvements in revenue collection, which grew by 18 percent in the first quarter as compared to the revenues in the same period last year. The P33.5-billion fiscal deficit was also 66 percent lower than the government’s target deficit of P98.1 billion.
Revenue collection for the first quarter amounted to P470.5 billion, or P72.8 billion higher than the revenue collection in the first quarter of 2014, although the revenue collections still fell short of the P484.1-billion target collection for the said period.
Of the total revenue collection, the Bureau of Internal Revenue (BIR) contributed P307.1 billion in collection, or an improvement of 16 percent from the agency’s collection for comparable periods last year. Still, this collection is P31 billion short of the BIR’s collection target for the first quarter.
The strong performance by the Bureau of Customs (BOC) in March made up for its slow start for this year, allowing the BOC collection to reach P90.29 billion, or a growth by 7 percent, or by P5.8 billion during the first quarter from the figures that it registered for the same period last year.
Income from the Bureau of the Treasury (BTr) increased by 81 percent in the first quarter due to higher interest income from deposits and bond holdings, as well as dividend collections. BTr income of P37.87 billion for the quarter was more than double the P16.7-billion target for the period.
On the expenditures side, the total disbursements of the national government in the first quarter amounted to P504 billion, or 4 percent higher than the total disbursements made in the first quarter of 2014. However, the total disbursements proved 13-percent below target for the period.
As percent of total disbursements, interest payments constituted 20 percent of the total expenditures for the quarter. This was higher than interest payments equal to 16.2 percent of the total government expenditures in 2014.
Total interest payments for the quarter this year amounted to P100.61 billion.