THE national government’s budget deficit in 2019 exceeded the Duterte administration’s fiscal gap ceiling as public expenditure spiked in the latter part of last year as “catch-up” for the delay in the passage of the 2019 budget.
Data from the Department of Finance (DOF) showed that the national government fiscal balance stood at a deficit of P660.2 billion, equivalent to 3.55 percent of the country’s gross domestic product (GDP).
This overshot by 0.3 percent the fiscal gap ceiling of 3.25 percent of GDP.
A budget deficit means expenditures exceeded revenue growth for a given period.
“The rise in the national government deficit beyond the government target should not adversely affect the country’s credit rating as fiscal stimulus was needed to shore up the country’s growth to a level closer to its 6.3 percent 10-year GDP growth average,” the DOF said in its economic bulletin.
Last year’s P660.2-billion fiscal gap is also 18.3 percent wider than the P558.3-billion deficit recorded in 2018.
Expenditures amounted to P3.797 trillion, up 11.4 percent from P3.408 trillion year-on-year.
The growth in government spending resulted from “catch-up expenditure plan totally reversed the residual effects of the four and-a-half month delay in the approval of the General Appropriations Act by Congress and the election ban especially in the last quarter when expenditures grew by 27.4 percent year-on-year.”
“The growth in expenditures led to a higher national deficit which settled at 3.55 percent of GDP, exceeding the targeted deficit by 0.3 percentage point,” the DOF said.
On the other hand, national government revenues grew 10.1 percent to P3.137 trillion from P2.850 trillion in 2018 on the back of 10.2 percent growth in tax revenues at P2.827 trillion and non-tax revenues at P93.9 billion.
“This is due to TRAIN and tax administration reforms,” the DOF said.
The Finance department said the early approval of the 2020 budget will enable the public sector projects to be implemented on time this year.
“This will moderate the negative impact of the Taal eruption and the global uncertainties arising from the coronavirus outbreak,” it said. (GMA News)
