The country’s budget shortfall slightly narrowed last year, with its share to the overall economy also easing, after the government secured better revenue streams as business activities returned to normalcy with COVID cases declining.
Data from the Bureau of the Treasury showed that the deficit in 2022 shrank by 3.35 percent to P1.61 trillion from the 2021 level of P1.67 trillion as the growth in revenue managed to outpace overall state spending.
In turn, the deficit, when measured against the gross domestic product (GDP), eased to 7.3 percent last year from the record 8.6 percent in 2021, as the economy grew at an over four-decade high of 7.6 percent.
The budget gap is 2.2 percent below government expectation of a P1.65-trillion shortfall. Similarly, the deficit-to-GDP ratio is also below the 7.58 percent target of the Cabinet-level Development Budget Coordination Committee.
Still, the deficit means that the government is spending beyond what it earned from revenue collections, although at a much softer pace.
ING Bank senior economist Nicholas Mapa said better fiscal numbers reflect the improvement of revenue streams as economic growth improves.
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