By Chino S. Leyco
The reenacted budget had limited the national government’s expenditure by at least a billion pesos each day in the first three months of the year and such underspending is expected to take a toll on the country’s growth, the Department of Finance (DOF) said.
Based on the first quarter fiscal performance analysis, which was shared by Finance Secretary Carlos G. Dominguez III to reporters, showed the national government’s actual spending was below target by at least P1 billion every day in January to March this year.
Dominguez’s analysis was based on the first-quarter cash operations report submitted by the Bureau of the Treasury, which showed that public spending during the period was below program by P98.3 billion.
“Looks like we didn’t spend a bit over P1 billion per day versus program,” Dominguez said in a mobile phone message to National Treasurer Rosalia V. de Leon, which the finance chief also forwarded to DOF reporters.
Based on the mobile phone message of De Leon to the secretary, public spending in the first-quarter reached P778 billion, below program by 11.2 percent, but up by one percent year-on-year.
In March alone, De Leon reported that disbursements contracted by eight percent to P287.3 billion year-on-year and also 16 percent below target.
Asked about the impact on the first-quarter gross domestic product (GDP) of the government’s underspending, Dominguez said it “will definitely be a drag on growth.”
The Duterte administration is aiming a GDP of about 6.0 percent to 7.0 percent this year, already an adjusted target range from the original 7.0 percent to 8.0 percent.
The below programmed spending, meanwhile, helped the national government to lower its budget deficit in January to March this year, falling by 41 percent to P90.2 billion from P152.1 billion in the same period last year.
The national government incurred a P58.4-billion fiscal gap last month, below by 51 percent against the ceiling for the month and 47 percent lower year-on-year.
On the other hand, total revenues amounted to P687.7 billion, up by 11 percent from the previous year.
According to De Leon, tax collections of the Bureau of Internal Revenue and the Bureau of Customs improved by 11 percent and nine percent at end-March, respectively.
Non-tax revenues also accelerated by 18 percent in the first-quarter due to the dividends remitted by the Bangko Sentral ng Pilipinas and Philippine Deposit Insurance Corp. amounting to P8.6 billion, the treasurer said.
As early as January, Dominguez along with Socioeconomic Secretary Ernesto M. Pernia and former Budget Secretary now Bangko Sentral ng Pilipinas Governor Benjmin E. Diokno already warned the delayed passage of the 2019 general appropriations act may result in lower than expected economic growth this year.
The House of Representatives and Senate failed to adopt a unified version of the 2019 GAA before the end of last year, which forced the Duterte administration to operate under a re-enacted budget beginning January.
The two chambers of Congress only managed to transmit an appropriations bill to President Duterte late March.
President Duterte signed the P3.7-trillion national budget for 2019 last week and vetoed P95.3 billion worth of appropriations for public works outside the programmed priorities of his administration.