GOVERNMENT spending will continue to increase until 2022, a Department of Budget and Management (DBM) official said.
At the recent Philippine Economic Briefing in Clark, DBM Fiscal Planning and Reforms Bureau director Rolando Toledo said national government spending continued to be robust in 2017, reaching P2.8 trillion or an increase of P274 billion, nearly 11 percent compared to 2016.
Personnel services grew by 11.8 percent or P85.2 billion, owing to the creation and filling up of positions as well as increase in the base pay and benefits of government employees as a result of the second tranche implementation of the compensation adjustment of 2018.
“Infrastructure and other capital outlays also surged by 15.4 percent to P568 billion from P493 billion in 2016. This is due to the implementation of road infrastructure projects of the Department of Public Works and Highways, the airport modernization program of the Department of Transportation, the capacity enhancement program of the Philippine National Police, and other capital outlays such as the repair and rehabilitation of school buildings of the Department of Education and State Universities and Colleges,” Toledo said.
He added that maintenance spending also expanded to 10.8 percent or P265.4 billion due to the implementation of the K to 12 program, scholarships of the Commission on Higher Education, purchase of medicines and vaccines by Department of Health, and the Conditional Cash Transfer Program of Department of Social Welfare and Development.
“Consequently, acceleration on infrastructure expenditure and faster fund utilization of government subsidies resulted in continued reduction of our underspending which has been cut down to just 2.9 percent in 2017. This compared to 3.6 percent in 2016 and from a high of 13.3 percent and 12.8 percent in 2014 and 2015, respectively,” the official furthered.
For this year, target disbursement is P3.3 trillion.
“The passage of the first package of the Tax Reform for Acceleration and Inclusion (Train) Law and the three percent deficit target will allow us to spend more over the medium term with disbursement projected to reach P5.1 trillion. That is equivalent to 20 percent of the gross domestic product (GDP) by 2022,” Toledo explained.
Revenues are targeted to rise to P2.79 trillion in 2018, or 15.9 percent of GDP.
Taking into account the impact of Train Law in the succeeding years, DBM projected revenues to increase by an average of 12 percent per year to reach P4.39 trillion or 17 percent of GDP by 2022.
“This rate of government spending will sustain the growth momentum with the GDP expanding to seven to eight percent. This budget is sound, appropriate and sustainable. As the debt to GDP ratio will continue to fall as we expect the growth of GDP to outpace our debt accumulation,” he furthered. (PIA Central Luzon)