MANILA – The national government's budget deficit plunged by 77 percent in October due to weak growth in public spending, the Department of Finance (DOF) said.
The budget deficit narrowed to P2.5 billion in October from the P11.2 billion in the same month last year.
Public spending expanded by only 6 percent to P154.8 billion from P145.5 billion a year ago amid a 13 percent improvement in state revenues.
Government revenues in October increased to P152.3 billion from the P143.3 billion posted in the same month last year. The Bureau of Internal Revenue contributed P101.8 billion while the Bureau of Customs chipped in P34.2 billion.
In a statement, Finance Secretary Cesar Purisima said government maintained its ceiling fiscal gap in the first 10 months of 2014 after it used only a little over a tenth of the year’s programmed deficit.
“I am pleased to note that the national government has recorded a budget deficit of P2.5 billion in October 2014, 77 percent narrower than the year-ago deficit, as revenue collections maintain its quick-paced growth,” Purisima said.
In the first 10 months of the year, government posted a P33.6 billion budget deficit, 70 percent lower than the P112.5 billion in the same period last year.
The fiscal gap at the end of October is only equivalent to 12.6 percent of this year’s budget deficit ceiling of P266.2 billion.
Government revenues grew 13 percent to P1.577 trillion in the first 10 months, up from the P1.4001 trillion in the same period last year.
Public spending in the period, meanwhile, increased by only 6 percent to P1.611 trillion from P1.513 trillion.
The primary balance as of end October was recorded at a surplus of P240.6 billion and also wider than comparable figures last year.
“Over the past three years, we have seen total and tax revenues growing at a quicker pace than gross domestic product (GDP),” Purisima said.
“The first three quarters of 2014 were no exception to this trend--total revenues have grown 12.5 percent while tax revenues have gone up 12.3 percent, both faster than the 9.1 percent nominal growth in GDP over the same period,” he added.
The Philippine economy slowed to 5.3 percent in the third quarter of 2014 from 7 percent in the same period last year.
The slow growth was blamed on weak public spending, which contracted by 2.6 percent in the period.