MANILA: The Philippines government has shown a surplus on budget of P6.8 billion in the month of November which cause the expenditures decline in the year.
The November surplus, which is higher than the P1-billion surplus recorded the previous year, narrows the year-to-date deficit to P26.8 billion. The budget gap from January to November is 76 percent lower than the 2013 level.
Total revenues for the month amounted to P158.2 billion, down four percent from the same month the previous year as collections set aside for tax refunds cut revenues of the Bureau of Internal Revenue and the Bureau of Customs by P9 billion and P6.5 billion, respectively.
This marked the fourth time this year the country swung to a monthly surplus.
The budget surplus stemmed from expenditures declining eight percent in November, or double the four-percent decline in revenues for the review period.
The slowdown in spending threatens to undermine the state’s overall economic growth and competitiveness as well, economists said.
Since January this year, major government agencies have been posting lower than programmed disbursements, putting at risk big-ticket infrastructure projects.
Given this, the Philippines is likely to end the year with a deficit that is lower than projected in the budget.
A deficit is incurred when the government spends more than it takes in from taxes or other forms of revenue.
Government disbursements declined to P151.4 billion in November, bringing total expenditures from January to November to P1.8 billion or five percent higher than last year’s level.
This caused the first year-on-year drop in monthly collections of both agencies this year.
Year-to-date revenue reached P1.7 trillion, up 11 percent year on year.
Interest payments totaled P292. 3 billion, lower than programmed, thus generating savings of P27.6 billion for the government.
“With the recent Moody’s credit rating upgrade, as well as improved scores in the Millennium Challenge Corp. scorecard leading to our eligibility for a second compact, one thing is clear: the Philippines is in a virtuous cycle. Prudent fiscal management by the national government keeps us in this sweet spot, reaping rewards and raring to reach for more,” Finance Secretary Cesar Purisima said.
Purisima likewise cited the steady decline of the share of interest payments to expenditures. For the 11 months ending November this year, the percentage improved to 16.6 percent from 17.7 percent in the same period last year.
“The continued decline in interest payments, apart from the substantial hauls pulled in by the revenue agencies, significantly expands our fiscal space and enables us to fuel more growth,” Purisima said.
“Credit rating upgrades that respond to the government’s commitment to good governance and sound economic management, for example, lower our borrowing rates and free up more funds for more productive investments,” Purisima said.
According to Purisima, increased fiscal space enables the government to invest in health, education, infrastructure, and other social services. “Such is the virtuous cycle put into motion by this administration’s conviction that good governance spurs good economics.”
