By Elijah Joseph C. Tubayan, November 13 2018; Business World
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THE GOVERNMENT’S fiscal deficit was right at the 3% target set for it in the first nine months of the year with revenue and expenditure as a share of the economy hitting fresh highs, the Department of Finance (DoF) said on Tuesday.
In an economic bulletin issued by the DoF chief economist, Undersecretary Gil S. Beltran, the national government deficit was 3% of gross domestic product during the period, off a revenue effort of 16.9% of GDP, up from 15.9% a year earlier.
The revenue effort target for 2018 is 16.1%.
The rise in revenue as a share of the economy was attributed to the Tax Reform for Acceleration and Inclusion (TRAIN) law, or Republic Act No. 10963, which came in effect in January.
“Fiscal space expanded by TRAIN 1 and tax administration (reforms) enabled government to boost investment and growth in the first semester,” Mr. Beltran said in the bulletin.
Tax effort grew to 15.2% in the nine months to September, from 14.5% a year earlier.
The Bureau of Internal Revenue’s collections as a share of GDP rose to 11.6% from 11.5%, while the Bureau of Customs’ tax effort expanded to 3.5% from 2.9%. Other agencies’ take relative to economy meanwhile was unchanged at 0.1%.
The non-tax revenue effort rose to 1.7% from 1.4% a year earlier.
Expenditure effort meanwhile rose to 20%, from 17.8% a year earlier, which is “the highest three-quarter expenditure effort, thus boosting its contribution to GDP growth.”
It was also ahead of the pace on the 19.1% expenditures-to-GDP target for 2018.
The DoF said increased spending effort was due to national government capital outlays, which expanded by 42.6% year-on-year during the nine months.
“Strong macroeconomic fundamentals backed by tax reforms and the ‘Build, Build,Build’ program will continue to boost economic growth as the competitiveness of the economy rises and more jobs are created,” the DoF said. — Elijah Joseph C. Tubayan