By Beatrice M. Laforga, September 24 2019; Business World
Image Credit to Business World
STATE SPENDING picked up further in August, by its fastest pace in six months, but a slightly faster revenue growth pared the fiscal deficit in the same period, according to data released last night by the Treasury bureau.
Total expenditures grew 8.78% to P282.2 billion in August from P259.5 billion a year ago, with primary expenditures — net of interest payments and which include spending on infrastructure and other capital outlays — picking up by 13.61% to P262.6 billion from P231.2 billion.
The same comparative months saw interest payments fall 30.71% to P19.6 billion from P28.3 billion.
The Treasury noted that total state spending in August “marks the second-highest growth achieved for the year next to February 2019,” which recorded a 21% surge, “as expenditures were buoyed by higher subsidies” to government-owned and -controlled corporations and local government allotments.
August primary expenditures posted “the highest growth since the 2019 GAA (general appropriations act) was enacted in April, signaling that disbursements may have started to pick up.”
Year-to-date state spending edged up by 0.94% (it was 0.11% down in the seven months to July) to P2.212 trillion from P2.191 trillion spent in 2018’s comparable eight months, with primary spending edging up by 0.44% (compared to a 1.32% drop as of July) to P1.961 trillion from P1.953 trillion and interest payments growing 5.03% to P250.6 billion from P234.7 billion.
Total revenue collections grew by 8.9% (compared to July’s 9.25%) to P279.7 billion in August from P256.9 billion.
Tax collections increased by 9.25% (compared to July’s 8.81%) to P261.8 billion from P239.6 billion, as collections by the Bureau of Internal Revenue (BIR) surged by 11.07% to P205.6 billion from P185.1 billion and the Bureau of Customs raked in 3.04% more at P53.6 billion from P52 billion.
Non-tax revenues — composed largely of subsidies to cover tax on government transactions — increased by 4.05% to P18 billion from P17.3 billion, as the Treasury contributed 9.24% more at P5.9 billion from P5.4 billion.
August revenues took year-to-date collections 9.54% higher to P2.091 trillion, compared to the P1.909 trillion raked in during 2018’s comparable eight months.
The same comparative eight months saw tax revenues grow 9.79% to P1.88 trillion from P1.712 trillion, with the BIR increasing collections by 10.56% to P1.452 trillion from P1.314 trillion and Customs growing collections by 7.22% to P411.2 trillion from P383.5 trillion.
Non-tax revenues grew 7.43% to P211.7 billion from P197.1 billion, with the Treasury contributing 29.51% more at P107.9 billion from P83.3 billion.
The resulting fiscal balance amounted to a P2.5-billion deficit in August that was 3.83% smaller than the year-ago P2.6 billion, as well as a P120.4-billion year-to-date gap that was 57.29% less than the P282 billion recorded a year ago.
In a note, Robert Dan J. Roces, chief economist at Security Bank Corp., noted that “the government has been pushing for a wider budget gap to accommodate heightened infrastructure spending.”
But even with August’s increased spending, economic “growth of six percent for the third quarter and the second half… is proving to be increasingly challenging, if conditional upon the speed of project deliveries and spending,” Mr. Roces wrote. — Beatrice M. Laforga