Budget deficit at 8.3% of GDP as of end-Sept.

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THE GOVERNMENT’S budget deficit went up to 8.3% of the country’s gross domestic product (GDP) as of end-September, data from the Department of Finance (DoF) showed.

This is higher than the 6.9% of GDP a year ago, but still below the Development Budget Coordination Committee’s (DBCC) 9.3% projection this year.

DoF data released on Monday showed that in the third quarter alone, the budget deficit as a percentage of GDP hit 9.2% — higher than the 7.4% and 8.3% seen in the first and second quarters, respectively.

The deficit widened as the government’s expenditure-to-GDP ratio went up to 24.6% in the nine-month period, compared with 23.6% in the same period last year.

Meanwhile, total government revenue as a percentage of GDP fell to 16.3% as of end-September compared with 16.8% last year.

Tax effort went up to 14.8% from 14.5% in 2020.

“(The) wider budget deficit (was) largely brought about by the adverse effects of the COVID-19 pandemic/lockdowns in terms of reduced tax collections and increased government spending on ayuda/financial assistance/various COVID-19 programs,” Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a Viber message.

The National Government’s budget deficit in the nine months to September increased by 29.56% to P1.1 trillion compared with the shortfall last year, data from the Bureau of the Treasury showed last month.

This was still 20.11% lower than the P1.4-trillion adjusted year-to-date goal and was 61% of the revised P1.8-trillion full-year budget deficit ceiling set by economic managers.

In September alone, the fiscal gap expanded by 30% to P180.9 billion from P138.5 billion a year earlier as spending outpaced a smaller increase in revenue collection.

Cid L. Terosa, a senior economist at the University of Asia and the Pacific School of Economics, had said that he expects the budget deficit to continue to widen in the fourth quarter as the government continues to increase spending to support economic recovery. — Jenina P. Ibanez