Philippine budget deficit shrinks by a whopping 34.4%

Thanks to modest spending growth coupled with the 13.7% rise in 2M11 total revenues.

In a release by Maybank ATR Kim Eng Philippines' Daily Edge, the national government posted a fiscal surplus of P10.7b in February as revenues jumped 49% YoY to P119.2b while expenditures grew 6.9% to P108.5b. The spike in revenues was due mainly to the Bureau of Treasury increasing its revenues more than 7x to P20.1b and the Bureau of Internal Revenue exceeding its monthly target 8.8% to post collections of P68.7b, up 28.6% YoY.

Meanwhile, expenditure growth was not as robust. Excluding interest payments, February spending grew 10.8% to P88b. Including January, growth in 2M11 total expenditures was only 12% and even slower at 8.4% if interest payments are excluded. The latter single-digit growth is not encouraging given that the same spending category contracted 2.5% in 2M11. Modest spending growth coupled with the 13.7% rise in 2M11 total revenues led to the budget deficit shrinking 34.4% to P5.3b for the year.