Fiscal surplus up 4-fold to P44.5 B on reenacted budget

By Chino S. Leyco

The national government’s budget surplus jumped by more than four-fold in January, dragging down the Duterte administration’s efforts to boost the country’s economic growth, owing to the delayed implementation of this year’s spending appropriations.

BTR logo

Amid plans to accelerate public spending for faster economic expansion, the Duterte administration suffered a setback in January after its expenditures contracted as impasse among lawmakers over the 2019 general appropriations act (GAA) continues.

The Bureau of the Treasury reported yesterday that the national government’s budget surplus ballooned to P44.5 billion in January from only P10.2 billion in the same month last year.

The culprit for the increase in fiscal surplus was the seven percent dropped in expenditures during the month, which according to the treasury was due to delays in the implementation of new projects and salary adjustments.

In January 2019, the national government spent P212.2 billion, or P16.5 billion less than the P228.7 billion in the previous year.

"The contraction in government spending resulted largely from the delays in the implementation of new government projects and salary adjustments due to the deferred passage of the 2019 GAA,” the treasury said in a statement.

Last week, the Duterte administration’s economic managers decided to lower their gross domestic product (GDP) target for 2019 due to the late passage of the budget appropriations.

From a range of 6.0 percent to 8.0 percent, the economic team now expects the economy to around 6.0 percent to 7.0 percent. But if a reenacted budget is implemented for the entire year, Socioeconomic Planning Secretary Ernesto M. Pernia warned the country’s economy would slowdown further, growing by only 4.2 percent to 5.9 percent, the slowest since 2011.

“We therefore urge Congress to transmit the 2019 national budget at the soonest possible time to Malacanang so the government can sustain its investments on development priorities, namely infrastructure and social services,” Janet B. Abuel, officer-in-charge of the Department of Budget and Management said.

“The longer the budget impasse lasts, the larger the adverse affect to the Philippine economy and its people,” she added.

While government spending has declined, the treasury reported that its revenues grew by seven percent in January to P256.7 billion from P238.9 billion a year ago.

For 2019, the inter-agency Development Budget Coordination Committee has set a nominal budget deficit ceiling of P631.5 billion, equivalent to 3.2 percent of GDP.