Expenditures fall anew

PHILIPPINES - In Brief 29 Aug 2014 by Romeo Bernardo
After a 50% rebound in June, government non-interest expenditures dropped anew by 17% in July. This calls to mind the President’s warning of the “chilling effect” of the Supreme Court decision, handed down on July 1, declaring the administration’s Disbursement Acceleration Program illegal. These sharp ups and downs in public spending since late last year makes it hard to build confidence in government’s ability and willingness to overcome absorptive capacity issues in agencies and pursue accelerated spending ahead. Whilst the Planning secretary said yesterday that government is addressing budgetary bottlenecks “with a sense of urgency”, until we see more consistent spending patterns, we remain doubtful that the public sector can contribute appreciably to economic growth this year. Based on the cash performance report released today, government recorded a P1.8 billion deficit in July bringing the seven-month deficit to P55.7 billion, about half of last year’s budget deficit and a fifth of the 2014 target. In contrast to the decline in expenditures, July revenues rose 15%. From January to July, revenues rose 12% and non-interest expenditures climbed 8%.

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