(CNN Philippines) — A little over a month ago, President Benigno Aquino III issued Administrative Order 46 (A.O. 46) — a reform directive that aggressively ramps up government spending for 2015.
Read: Aquino wants government to speed up spending for 2015
Lower government spending has been blamed as a major cause of 2014’s missed gross domestic product (GDP) target. Last year’s GDP posted a full-year growth of 6.1%, about a notch below the government’s target range of 6.5% to 7.5%.
“Lower government spending, investment delays and slowdown, and weaker exports are likely to limit economic growth to… 6.5 percent in 2015,” the World Bank said in highlights of its Philippine Economic Update for January 2015.
“Provided that government can fully commit to utilizing the budget as planned, as well as accelerating reforms, achieving growth of above 6.5 percent can be achieved,” it added.
Recent figures from the Department of Finance (DoF) reveal that the administration my have a difficult time implementing such reforms. The national government registered a budget balance deficit of P33.5 billion during the first three months of 2015.
On the bright side, the deficit is 60% (P50.6 billion) lower compared to the same period last year. It’s also 66% (P64.6 billion) lower than the government’s expectations. Government revenues posted a double-digit growth of 18% year-on-year to P470.5 billion. However, such still fall short of the P484.1-billion target by 3%.
At P504.1 billion, last quarter’s expenditures fell short of the government’s target by 13% — despite a 4% increase year-on-year.
Excluding interest payments, the government registered a surplus of P67.1 billion, more than triple that of the P19 billion surplus in the first quarter of 2014.
Most of the government’s collections came from the Bureau of Internal Revenue. First quarter collections reached P307.1 billion, a 16% (P42.4 billion) from the same period in 2014. The figure still falls short of of the P338.1 billion government target by 9%.
With first quarter revenue at P5.8 billion — a 7% year-on-year growth — the Bureau of Customs also fell short of its target by 11%.
“I am pleased to note that the BIR notched consistent double digit year-on-year growth for each month of the quarter. Further, despite lower oil prices, BOC collections still managed to continue growing. The key is always to look at the overall trend lines — and for the recent years they have kept moving on up,” Finance Secretary Cesar Purisima said in a statement.
The Bureau of the Treasury posted a stellar performance for the first three months of the year. First quarter income from the agency surged by 81% (P16.9 billion), buoyed by higher interest income from deposits, bond holdings, and dividend collections. The agency’s income is more than double its target for the period.
“As expenditure figures continue to pick up, I believe a whole-of-government approach to boosting spending and improving agency absorption capacities will be instrumental in widening these figures further,” Purisima said.
“We are no doubt in a very good place; foreign and domestic institutions alike have recognized our sound position amid global economic volatility. The continued uptrend of figures for the first quarter of 2015 clearly exhibit the commitment this government holds in ensuring our macroeconomic fundamentals remain sound, and that we have enough resources to fuel our path forward.”
