The ratio between the country’s economic output and the budget deficit incurred by the national government widened in the first nine-months of the year, the Department of Finance (DOF) said.
Data from the DOF showed Monday, Nov. 15, that the Duterte administration’s fiscal gap inched up to 8.3 percent of gross domestic product (GDP) in January to September 2021 from 6.9 percent in the same period last year.
But despite the uptick, the end-September fiscal gap level was still below the 9.3 percent of GDP cap set for 2021 by the the inter-agency Development Budget Coordination Committee (DBCC).
In the third-quarter alone, the government’s budget deficit ratio jumped to 9.2 percent from 7.6 percent in the same time in 2020.
The acceleration was primary driven by higher spending, with the government’s expenditure to GDP ratio increasing to 24.6 percent in the first three-quarters from 23.6 percent a year earlier.
Last Oct. 25, the Bureau of the Treasury reported that that the national government's nine-month fiscal deficit rose by 29.5 percent to P1.14 trillion from P879.2 billion in the same period last year.
But despite the uptick, the actual budget deficit the government incurred was lower than the programmed P1.42 trillion for the period and accounted for only 61 percent of the revised P1.8 trillion full-year ceiling.
Meanwhile, the national government registered a 14.8 percent tax effort at end-September, up from 14.5 percent a year earlier.
According to the DOF, the better tax effort was due to the improved collection efficiency of the Bureau of Customs, the government’s second largest tax agency.
As of September, the Customs’ tax effort stood at 3.4 percent, higher compared with 3.1 percent in the same period in 2020.
The Bureau of Internal Revenue, on the other hand, saw a slight decline in tax effort settling at 11.2 percent from 11.3 percent last year.
The government’s revenue effort, meanwhile, dropped from 16.8 percent to 16.3 percent in the first nine-months of the year.