THE government’s budget deficit from January to July 2018 stood at P279.4 billion, up by P74.4 billion or 36.3 percent from 2017, data from the Department of Budget and Management (DBM) showed.
Revenue collected for the seven months amounted to P1.652 trillion, increasing by P281.3 billion, or 20.5 percent, compared to the same period last year. The budget deficit results when government expenses exceed revenues.
The country’s economic managers had set a budget deficit cap of P532.6 billion, or equivalent to 3 percent of the country’s gross domestic product.
The budget deficit for July 2018 was P86.4 billion, up by 71 percent, or P35.9 billion, compared to the same period last year.
It represented growth of 59.1 percent over June’s P54.3 billion.
National government spending for the seven months of the year also reached P1.932 trillion, higher by P355.7 billion, or 23 percent, year-on-year.
It also reached its peak so far for the year at P328.1 billion in July 2018, an increase of P83 billion, or 34 percent, from the same period last year.
The rise in spending was due to infrastructure and capital outlays, as well as subsidies to government corporations. Budget Secretary Benjamin E. Diokno said the fiscal numbers in 2018 confirm progress in government efforts to reduce underspending and instill public financial reforms.
“Government spending is intact, and this means that our people will enjoy the benefits of government projects sooner, such as school buildings and hospitals for the poor, and road and mass transit projects for commuters,” Diokno said.
Because of the Build, Build, Build program, infrastructure and capital outlays reached P84.5 billion, surging by P36.1 billion or 75 percent compared to July 2017.
Disbursements included those for the implementation of infrastructure projects such as nationwide road construction, improvement and widening projects; Pasig Marikina River Channel Improvement Project, flood control, drainage and dike improvement and rehabilitation projects.
Contributing to higher infrastructure and other capital spending were capital acquisition through the Armed Forces of the Philippines Modernization Program, such as the Frigate Acquisition Project and Civil Engineering Acquisition Project and capital outlay projects including procurement of machinery, aircraft, and aircraft equipment of the Department of Transportation-Philippine Coast Guard.
Also, subsidies to government corporations hit P32.5 billion, nearly double or 93 percent higher than in July of the previous year. This is because of the P27.7-billion health insurance premiums of indigents enrolled under the National Health Insurance Program of the Philippine Health Insurance Corporation, irrigation projects worth P2 billion under the National Irrigation Administration (NIA), and another P2 billion for cash downloads to the beneficiaries of the Tax Reform Cash Transfer Project under the LandBank.
Another driver of spending growth was the sustained increase in Personnel Services owing to higher salaries of civilian government employees by virtue of the third tranche of compensation adjustment, and higher salaries of military and uniformed personnel authorized by Joint Resolution No. 1, s. 2018. Personnel Services reached P70.6 billion in July 2018, increasing by P16.9 billion or 32 percent, year-on-year.
“We are doing our best to fast-track the release and disbursement of funds for public programs and projects,” Diokno said. “We maintain our projection that underspending will be eliminated under our watch. Looking ahead, the shift to an annual cash-based system will further enhance spending efficiency as performance will be measured on concrete outputs and not just on contracts awarded.”