Finance Undersecretary Gil Beltran
MANILA – The Philippine government exceeded its deficit to gross domestic product (GDP) target for 2019 due to the catch-up spending program, but a ranking Department of Finance (DOF) official does not consider this as negative to the A-credit rating bid.
In an economic bulletin released Tuesday, Finance Undersecretary Gil Beltran cited the Bureau of the Treasury’s (BTr) report about the 6.49 percent year-on-year rise of the budget deficit to PHP660.2 billion last year, higher than the PHP620-billion target.
In terms of its share on GDP, the budget gap accounts for 3.55 percent of domestic output, higher than the 3.2 percent of GDP target.
BTr data show that total revenues last year were 0.39 percent short of the PHP3.149-trillion program after it only amounted to PHP3.137 trillion.
In terms of growth, the government’s revenues last year grew by 10.08 percent year-on-year compared to the PHP2.85 trillion in 2018.
Expenditures, in turn, exceeded the target by 0.74 percent to PHP3.797 trillion against the PHP3.769-trillion target.
Last year’s government spending rose by 11.42 percent from the previous year’s PHP3.408 trillion.
Beltran said the government’s decision to increase spending in the second half of 2019 to address the inability to do it in the first half due to the delay in the approval of the national budget resulted in the 27.4-percent rise of expenditures in the last quarter of last year.
“The early approval of the 2020 budget will enable the public sector 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,” he said.
Beltran further said the rise of the budget gap “beyond the government target should not adversely affect the country’s credit rating as the 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.”
“Likewise, in 2019, the deficit was financeable because domestic interest rates and the NG’s (national government) debt ratios were declining,” he added.
Economic managers aim for the upgrade of the country’s credit rate to A-level within the next two years as domestic fundamentals continue to improve. (PNA)
