Two-month disbursement reflects fiscal inertia

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In Photo: New buildings are constructed in the Quezon City Central Business District being developed by the National Housing Authority and Ayala Land. According to the International Monetary Fund (IMF), the Philippines will lead Southeast Asia in terms of growth in the next two years due to higher public spending and robust consumption. GDP will likely grow 6.8 percent this year and 6.9 percent in 2018, outpacing Vietnam, Indonesia, Thailand and Malaysia, the IMF said in a report it released on Tuesday.

Alhough the economic managers have vowed to usher in a period of frenetic buildup of public infrastructures ostensibly under President Duterte’s vaunted golden age of infrastructure, they have nothing to show for it in terms of fiscal performance.

The disbursement of public funds even slowed by 11 percent in February to only P175.6 billion from P198.1 billion the month before. The first two months typically comprise the period when prior Malacañang occupants pour as much of the nation’s budget as they could for projects such as ports, bridges, hospitals and others before the onset of the rainy season when construction schedules go haywire as the monsoon season deepens.

Such was the inertia that the budget deficit was a mere P21.5 billion in the first two months, the result of an initial budgetary surplus of P2.22 billion in January that reverted to a deficit of just P23.7 billion in February.

Revenue generation also slowed during the period, totaling P200.31 billion in January, but slowed to only P151.8 billion a month later.

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But compared against the first two months last year, this year’s revenues expanded by 10 percent to P352.5 billion instead of only P321.2 billion.

The bulk of these were generated by the Bureau of Internal Revenue, which racked up two-month collections totaling P253.3 billion, P28.8 billion higher or 13 percent more than before.

The Bureau of Customs also racked up P8.7 billion or 15 percent more revenues during the period from only P58.1 billion last year to P66.8 billion.

Collection from other offices of the national government contracted by 3 percent to only P3.1 billion from P3.2 billion.

As for nontax revenues, these similarly contracted by 18 percent to only P29 billion from last year’s P35.3 billion as the Bureau of the Treasury (BTr) reported revenues of only P13.3 billion for the period from the year-ago collection of P13.8 billion.

The 4-percent increase in public disbursement was fueled in the main by a five-percent expansion in so-called other expenses to P307.1 billion instead of the year ago disbursement of only P292.4 billion.

Interest payment proved static in the first two months, totaling P66.6 billion from the year ago of P66.9 billion.

“Netting out interest payments from expenditures, the national government recorded a P500 million primary surplus for February in contrast to the P13.3-billion primary deficit recorded last year. The year-to-date primary surplus of P45.1 billion is up by 57 percent from 2016, indicating wider space for productive spending,” the BTr said in a statement.

Image Credits: Nonie Reyes