The Department of Finance (DOF) reported that the national government's budget deficit in the first half of the year stayed within a manageable range relative to the overall economic output.

Finance Secretary Benjamin E. Diokno said the government's budget deficit for the first half of the year, amounting to P551.7 billion, accounts for 4.8 percent of the country's economy as measured by the gross domestic product (GDP). 

Compared to the first semester last year, Diokno noted that “the deficit-to-GDP level is at 4.8 percent, down from 6.5 percent in the first semester of last year. This is way below our target of 6.1 percent for 2023.” 

For this reason, Diokno said the Marcos administration is on course to reach a budget deficit ratio of three percent by 2028.

However, the national government's budget deficit to GDP ratio was lower than expected in the first half because it spent less than originally planned during that period, data from the Bureau of the Treasury sowed.

The Marcos administration lowered the fiscal deficit by 28 percent compared to the set limit of P771.5 billion, primarily by cutting down government spending, which was 6.6 percent lower than the planned amount.

“I'm worried that we're not meeting our expenditure target, okay? I'm not happy with the smaller deficit,” Diokno said.

Diokno earlier asked government agencies, notorious for their underperformance in spending, to submit their catch-up strategies for the second half of the year.

The DOF chief identified the Department of Information and Communications Technology (DICT) and the Department of Transportation (DOTr) as agencies that exhibited poor spending efficiency.

But Diokno also clarified that there are many other government agencies aside from DICT and DOTr that are spending below their targets.

Diokno, however, remains positive that these agencies can still recover from their underwhelming spending performance, despite the inclement weather during the second semester of the year.

Diokno also said the government's catch-up spending program, which involves addressing the issue of approximately P124.1 billion worth of stagnant checks in agency offices, would provide a substantial uplift to growth.

Last week, Budget Secretary Amenah F. Pangandaman said the amount of outstanding issued checks as of June 2023 was astounding and should have already been converted into cash.

Pangandaman said these uncashed checks were issued by national agencies, local government units, state universities and colleges, as well as government-owned and controlled corporations.

“That’s one of the reasons for the underspending,” Diokno said, referring to the national government’s P170.5 billion spending shortfall from January to June 2023.