Public spending falls due to budget delay.
The reenacted budget continued to take a toll on the national government's spending plan that resulted in significant jump in fiscal surplus in April this year, data from the Bureau of the Treasury showed.
Based on the Treasury report, the national government's budget surplus skyrocketed by 88 percent in April this year to P86.9 billion from P46.3 billion in the same period last year.
The culprit for the huge increase in budget surplus was the 15 percent drop in expenditures.
Public spending last month amounted to only P221.8 billion, down by P39.4 billion from P261.2 billion in the previous year.
"Part of the slower spending was still due to the four-month delay in the passage of the 2019 national budget which constrained the government in implementing new programs and projects," the treasury said.
In April, total government revenues grew by 0.4 percent to P308.7 billion from P307.6 billion.
Of that amount, tax collections reached P288.9 billion, higher by 2.8 percent year-on-year, while non-tax revenues declined 26 percent to P19.8 billion.
The slower expenditures in April dragged down the government's total spending in the first four-months to P999.8 billion, down 3.2 percent from P1.033 trillion.
At end-April, the national government's generated a total revenues of P996.4 billion, up 7.4 percent from P927.4 billion in the same period last year.
The fiscal surplus in April reduced the cumulative budget deficit to P3.4 billion, far lower than the P105.9 billion a year before.
Earlier, the Department of Finance (DOF) said that efficiency of public spending to spur economic growth weakened in the first three-months of the year after the Duterte administration operated under a reenacted budget.
Finance Undersecretary Gil S. Beltran said the government's total expenditures as a percentage of the country's economy, as measured by its gross domestic product (GDP), declined to 18.5 percent in January to March this year from 19.7 percent in the same period last year.
"The delay in the passage by Congress of the 2019 budget weakened expenditures and the domestic economy. National government underspending was estimated at P69.5 billion using the difference between the full year expenditure program of 9.8 percent and the actual first-quarter expenditure growth of 0.8 percent," said Beltran, who is also the DOF chief economist.
The Philippine economic growth slowed to 5.6 percent in the first-quarter and the DOF estimated the GDP growth without the 2018 re-enacted budget could have been at 7.2 percent, the highest since the fourth-quarter of 2017.
Beltran said the GDP fell to its slowest growth pace in 16-quarters due to the huge drop in government spending.
"Underspending of P69.5 billion in the first quarter of the year reduced GDP growth by 1.6 percent of GDP," Beltran said. "If the budget was approved as scheduled and disbursements were made promptly, GDP growth in the first quarter would have risen to 7.2 percent," Beltran said.
Socioeconomic Planning Secretary Ernesto M. Pernia earlier said that budget delay halted the country's 15 straight quarters of 6.0 percent and above growth rate.
The softer GDP figure, the weakest since the 5.1 percent expansion in the first-quarter of 2015, was dragged down by the reenacted budget that restricted the Duterte administration to increase its monthly spending by at least P1 billion since January.
As earlier as January, President Duterte's economic team, which includes Pernia, warned that operating under a 2018 reenacted budget this year would weaken the economy as it limits government's spending program.
From the original 7.0 percent to 8.0 percent GDP growth target, the economic managers revised downward its goal to between 6.0 percent and 7.0 percent, which Pernia believes is still "achievable" despite the disappointing 5.6 percent figure saw in the first three moths.
"As we have forewarned repeatedly, the re-enacted budget would sharply slow the pace of our economic growth," Pernia said. Have had the 2019 GAA passed into law before the end of last year, the National Economic and Development estimated the GDP expanded by 6.6 percent.
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|Title Annotation:||Business News|
|Date:||May 24, 2019|
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