Government spending expanded by 1.2 percent in the first five months of the year, an increase that leaves much to be desired to sustain strong economic growth, Finance Secretary Benjamin Diokno told a news forum Wednesday.
Speaking at the Kapihan sa Manila Bay, Diokno said that while revenue generation continued to improve, the disbursement only rose slightly to P1.9 trillion.
“So this is kind of discouraging because we have the money but are not able to spend all of it. This suggests that we are underspending,” said Diokno.
He said the Department of Finance is closely watching government agencies to ensure they boost spending and help growing private consumption push economic growth higher.
Gross domestic product expanded in the first quarter by 6.4 percent year-on-year.
Total revenue in the January-May period increased by P155.6 billion, or 10.8 percent, to P1.6 trillion while the budget gap narrowed to P326.3 billion during the five-month period from the year-earlier period of P458.7 billion.
“Our robust fiscal performance suggests we are on track to achieving our targets under the Medium-Term Fiscal Framework. We are planning to revise our revenue collection targets further upward to take into consideration the implementation of tax measures that we are prioritizing in the medium term,” Diokno said.
The tax measures the Department of Finance want Congress to pass includes tax on junk foods, excise tax on single-use plastics, the Real Property Valuation and Assessment Reform, and the Passive Income and Financial Intermediaries Taxation Act to simplify the complicated tax structure of financial transactions and deepen the capital markets.
