By Jon Viktor D. Cabuenas, January 8 2019; GMA Network
Image Credit to Business Wire
The Philippines is likely to underspend in 2019, but the expected slowdown in revenue growth will still bring the deficit close to the government’s target, Fitch Solutions Macro Research said Tuesday.
It sees government spending at P3.300 trillion this year, compared with the proposed budget of P3.757 billion.
“Although the proposed 2019 budget is P10.0 billion smaller than the 2018 Budget, it is still likely to be larger than the realized expenditure for 2018, which we estimate to have reached around P3.3 trillion,” it added.
Fitch Solutions expects the budget deficit this year at 2.9 percent of the gross domestic, short of the government target of 3.2 percent.
The budget deficit is the difference between government revenue and the amount of money it spends during a specific period.
The inter-agency Development Budget Coordination Committee (DBCC) raised the deficit ceiling to 3.2 percent from 3.0 percent.
“Going forward, we continue to expect the fiscal shortfall to remain wide at around 2.9 percent in 2019, given the government’s strong commitment to its expansionary fiscal agenda,” Fitch Solutions noted.
House Majority Leader Rolando Andaya Jr. claimed on Monday a need to re-examine the national budget, saying the fiscal deficit does “not look so good.”
“Government disbursements continue to outpace the increase in revenues. Both government spending and revenues are growing beyond their respective targets. As a result, government may fail to meet its deficit ceiling for the year,” said Andaya.
Andaya served as Budget secretary during the administration of former President and now House Speaker Gloria Macapagal-Arroyo.
Budget Secretary Benjamin Diokno belied Andaya’s estimates, saying that government spending is on track.
“By comparison, infrastructure outlays as percentage of GDP under the Duterte administration was 6.3 percent (2017-2018) compared to Gloria Macapagal-Arroyo’s 1.6 percent (2001-2010). No contest!” Diokono said. —VDS, GMA News