By Joan Santiago
Government spending, which is among the growth drivers of the domestic economy this year, continue to grow but the deficit did not balloon due to sustained growth in revenue collections.
Bureau of the Treasury (BTr) data shows that deficit last October reached P9.67 billion, lower than year-ago's P21.26 billion.
In the first 10 months this year, the budget gap was P115.74 billion, less than half of the full-year deficit ceiling of P279 billion, which accounts to 2.6 percent of gross domestic product (GDP).
Revenues last October alone amounted to P134.32 billion, boosted by most of the revenue-generating agencies.
In particular, the Bureau of Internal Revenue (BIR), which collects about 70 percent of taxes, jumped 22 percent to P86.11 billion while that of the Bureau of Customs (BOC) rose 18 percent to P26.93 billion.
Also, collections of the BTr rose by 140 percent to P6.3 billion and the other offices contributed P15 billion.
Government spending amounted to P143.994 billion last October.
For the first 10 months this year, revenues amounted to P1.25 trillion, 12 percent higher than the P1.12 trillion same period in 2011.
Of the total, BIR's contribution rose 13 percent year-on-year to P858.57 billion while the BOC's went up by 11 percent to P240.6 billion.
BTr also contributed higher collection at P71.35 and the other offices shared in P82.75 billion.
Expending during the 10-month period totaled to P1.37 trillion, 15 percent higher year-on-year.
Finance Secretary Cesar Purisima, in a statement said the government continues to record primary surplus, which transpires when you exclude interest payments in total expenditures, with last October's figure at P150.95 billion.
He said the "resilient" performance from both the revenue collection and spending "greatly reduces the risk of fiscal slippage by year-end, as it is well within the full year deficit program of P279.106 billion."
He disclosed that revenue effort as of the third quarter this year increased to 14.7 percent against year-ago's 14.5 percent.
"The Aquino administration's prudent fiscal management has maintained ample fiscal space to spend for inclusive growth, maintaining a deficit-to-GDP ratio at 1.4 percent, well within the 2.6 percent full-year program," he said.
"The 1Q-3Q national government tax effort also increased to 13.1 percent, against the previous year's 12.7 percent. This is driven by the 0.4 percent improvement in the Bureau of Internal Revenue's revenue-to-GDP ratio, now at 10.2 percent," he said.
Purisima said with the higher-than-expected 7.1 percent growth of the domestic economy in the third quarter this year, which is at the top in the ASEAN and the second in the region after China, and the 11.8 percent revenue growth "we are confident that we are reaping the dividends of President Aquino's good governance reforms."
He pointed out that expansion of the domestic economy is "significant" because it is higher than the trend GDP growth of 4.7 percent in the past ten years, was accomplished in a very difficult global economic environment, and happened despite a 2.2 percent decline in mining.
He, on the other hand, stressed that "while the current fiscal space continues to be an opportunity for the judicious use of public funds for projects of high and inclusive growth, the Finance Department continues to push for revenue-generating reforms that will allow for sustainable and resilient fiscal consolidation."
Among these measures is the proposed sin tax reform bill, which has been passed by the Congress and the Senate.
Last November 20, the Senate approved on third and final reading its version of the bill, which is targeted to raise additional P40 billion in revenues and provides incremental increase until the rate becomes unitary in 2017, which in turn was made to make it hard for the poor and the youth to access sin products.
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