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Philippines: Budget deficit swells to P700 billion in end-July
MANILA, Philippines — The national government’s budget deficit widened further to P700.6 billion from January to July as coronavirus-related expenses boosted disbursements while revenues declined, according to the Bureau of the Treasury (BTr).
Based on the latest cash operations report of the BTr, the budget figure soared by nearly 500 percent from the P117.9 billion deficit recorded in the same period last year.
For July, alone, the government incurred a fiscal deficit of P140.2 billion, up by 86.21 percent from P75.3 billion a year ago.
A deficit occurs when a government spends more than the money it generates.
The BTr attributed the higher deficit to the implementation of various COVID-19 rehabilitation and recovery measures, which drove disbursements up amid a decline in revenues.
BTr data showed revenues from January to July dropped by 6.84 percent to P1.69 trillion from P1.81 trillion in the same period last year due to the adverse impact of the health crisis on economic activity.
Tax collections, which accounted for 85 percent or P1.43 trillion of the total, went down by 11.69 percent from P1.62 trillion a year ago.
Revenues generated by the Bureau of Internal Revenue decreased by 10.53 percent to P1.12 trillion from last year’s level of P1.25 trillion.
The Bureau of Customs also raised P302.9 billion in the first seven months, a 15.31 percent decline from P357.7 billion a year ago due to disruptions in trade caused by movement restrictions.
Non-tax revenues, meanwhile, rose by 33.68 percent to P259.2 billion from P193.9 billion.
The BTr generated P190.9 billion in revenues, up by 87.16 percent year-on-year and already above the full-year target of P82.3 billion, driven by higher dividends from state corporations and other government service income.
Other offices also contributed P68.3 billion in non-tax revenues, a decline of nearly 26 percent from P91.9 billion last year due to restrictions in economic activities and government operations amid the pandemic.
For July, total revenues amounted to P234.5 billion, down by 11.22 percent compared to P264.1 billion in the same month in 2019.
On the other hand, the national government’s disbursements in the first seven months registered a 23.78 percent growth, reaching P2.39 trillion from P1.93 trillion in the same period last year.
Expenditures for July alone reached P374.7 billion, 10.4 percent higher than P339.4 billion a year ago, driven by the second tranche releases for the Social Amelioration Program and other COVID-19 related expenses.
Year-to-date, primary expenditures climbed by 26 percent to P2.14 trillion from P1.7 trillion in January to July 2019, while interest payments expanded by 6.94 percent to P247.1 billion from P231 billion.
Net of interest payments, the national government incurred a primary deficit of P453.6 billion as of end-July, a reversal of the P113.1 billion surplus in the same period last year.
Source: https://www.philstar.com/business/2020/08/27/2038049/budget-deficit-swells-p700-billion-end-july