By Luisa Maria Jacinta C. Jocson, Reporter
THE NATIONAL Government
Analysts stated that (NG) is expected to fall short of its spending goals this year, which could potentially hinder economic growth.
The ING Bank’s Senior Economist, Nicholas Antonio T. Mapa, stated in an email that the National Government is likely to fall short of their spending goals for the year due to a discrepancy between projected and actual expenditures.
9 months ending September 2021
The deficit in the budget decreased by 2.89%, reaching a total of P983.5 billion for the 9-month period ending in September of 2021.fi
According to data from the Bureau of the Treasury (BTr), the revenue for the first nine months was 11% lower than its projected amount.
The government’s earnings increased by 6.79% to P2.84 trillion, exceeding its goal by 2.98%. However, expenses also increased by 4.12% to P3.82 trillion, falling short of the target by 1.06%.
The government has established a maximum limit for the budget deficit of P1.499 trillion for this year, which is equal to 6.1% of the country’s gross domestic product (GDP). The budget plan includes P3.729 trillion in income and P5.228 trillion in expenses.
Mr. Mapa noted an increase in spending during the third quarter, but he also expressed concern that obstacles arising from the transfer of certain expenses to local government units (LGUs) may be hindering the ability for spending to significantly and consistently increase.
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According to economics professor Leonardo A. Lanzona from Ateneo de Manila University, the net income for the year 2021 thus far is from Ateneo de Manila University.fiscal deficit is only over 60% of the full-year deficit program, noting that revenues
Additionally, expenditures have fallen behind as well.
According to an email from Mr. Lanzona, government spending was initially low for the entire year, but was increased in the last six months in order to stimulate growth. However, the revenues did not match the projected expenses for the year.
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In order to support its spending, the government needs to have resources other than just tax revenues. However, it appears that they have not been able to acquire these non-tax generated resources.ficit spending,” he added.
According to Filomeno S. Sta. Ana III, who is the coordinator of Action for Economic Reforms, the government has not done well in terms of generating income and increasing spending.
According to a statement made via Facebook Messenger, the government’s current strategy for reducing the deficit is to spend less, which could have negative effects on economic growth.
Mr. Mapa also acknowledged the potential effect of sluggish government expenditures on the growth of gross domestic product (GDP) for this year.
The speaker stated that the National Government’s poor performance of -7.1% in the second quarter has demonstrated the negative effects of underspending, as evidenced by a further decrease in GDP to 4.3%.
The GDP growth in the second quarter was lower than anticipated at 4.3%, compared to 6.4% in the first quarter and 7.5% from a year ago. This falls short of the government’s goal of 6-7% for the year. The Philippine Statistics Authority (PSA) will announce the third-quarter GDP figures on November 9th.
Following a 7.1% decrease in government spending during the second quarter, the Finance department has instructed agencies to devise catch-up strategies for their expenditures.
According to Mr. Lanzona, the government must prioritize bolstering the domestic economy in order to promote growth.
The government’s economic programs have been moving slowly instead of quickly, despite having more money from taxes. It is important to prioritize preparing the local economy for current economic and technological changes, rather than spending time seeking foreign investments and taking on more loans to fund their programs.
He stated that the issue has become more severe with the recent increase in interest rates. The government is struggling to maintain a lower budget deficit and is finding it increasingly challenging to secure external funds.