THE national government’s budget deficit from January to September widenedtoP1.14 trillion, surpassing the P879.2-billion shortfall in the same period last year.
Latest data released by the Bureau of the Treasury showed that the fiscal gap during the nine-month period was bigger by 29.6 percent than a year ago.
The wider gap resulted from government expenditures overtaking state revenues.
The cumulative deficit of P1.14 trillion as of end-September is equivalent to 61 percent of the revised P1.8-trillion full-year program.
However, this is still lower by 20.11 percent when compared with the P1.4-trillion target for the January-to-September period.
State revenues as of end-September amounted to P2.24 trillion, up by 4.37 percent year-on-year from P2.14 trillion. It also went beyond the government’s P2.137-trillion target by 4.71 percent.
On the other hand, government expenditures reached P3.38 trillion, an 11.7-percent spike from last year’s P3.02 trillion. However, this is still 5.22 percent below the government’s P3.56-trillion program during the period.
For the month of September alone, the government’s budget deficit grew by 30.6 percent to P180.9 billion from P138.5 billion in the same month in 2020.
Revenues during the month stood at P231.4 billion, up by 8.96 percent from P212.4 billion a year ago.
Expenditures
Meanwhile, expenditures hit P412.4 billion, jumping by 17.5 percent from P350.9 billion in September 2020.
ING Bank Senior Economist Nicholas Mapa said the widening deficit suggests the ballooning overall debt of the country.
The government borrows to meet its spending requirements and finance its budget deficit.
“Currently the debt-to-GDP ratio is at roughly 63 percent, beyond the threshold that credit ratings agencies may view as sustainable,” Mapa said.
While he noted that the steady growth for both expenditure and revenue collections is a positive development, he pointed out that this may have been bolstered by the low base from the previous year when spending and revenue collections contracted in September 2020.
“Nonetheless, rising revenues show that economic activity has improved compared to the same period last year. Meanwhile, government spending has sustained its momentum, which will likely continue to close out the year. This will be a positive in terms of GDP as government spending will need to compensate for consumption and capital formation, which may yet to revert to pre-Covid pace of expansion,” he said.
In 2020, the government’s budget deficit more than doubled to a record-high 7.6 percent of GDP or P1.37 trillion, from only P660.2 billion or 3.4 percent of GDP in 2019.
From a record-low debt-to-GDP ratio of 39.6 percent in 2019, the country’s debt as a share of the economy surged to a 14-year high of 54.6 percent in 2020, as the government ramped up borrowings to fund the Covid-19 pandemic response war chest.
Finance Secretary Carlos Dominguez III earlier said they are working on a fiscal consolidation plan to bring down the government’s debt and budget deficit levels as a share of the economy.
The Department of Finance sees the government returning to its pre-pandemic budget deficit and debt levels as early as 2024 or by 2025 if the recommended fiscal measures are passed early.