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Philippines: Budget gap widens further in 6 months
MANILA, Philippines — The government’s fiscal deficit widened further to P560.4 billion from January to June as the COVID-19 pandemic resulted in higher disbursements but lower revenues year-on-year, according to the Bureau of the Treasury.
According to the latest data from the BTr, the government incurred a fiscal deficit of P560.4 billion in the first six months, a dramatic 1,214 percent increase from the P42.6 billion deficit recorded in the same period last year.
Despite the dramatic surge, the latest budget gap is still lower than the government’s ceiling of P751.1 billion for the first half.
The country’s fiscal position remained in the negative territory in the first semester even as it reverted to a surplus in June following the collection of income taxes which should have been filed in April and the easing of government restrictions, which gave way to the resumption of some economic activities.
A surplus occurs when the government generates more revenues than the money it spends, while a deficit happens when expenditures exceed revenues.
Based on BTr data, government revenues in the first semester declined by 6.09 percent in contrast to the 26.63 percent growth in expenditures during the period.
Revenues, in particular, declined to P1.453 trillion from P1.55 trillion in the same period last year. The figure, however, is slightly higher than the revised target of P1.452 trillion.
The bulk or P956.4 billion of the amount came from the BIR, surpassing the agency’s goal of P933.5 billion, but still lower than last year’s level of P1.07 trillion.
Likewise, the BOC’s midyear collection dropped by 16.47 percent to P253.1 billion from P303 billion. This is also 0.45 percent short of the P254.2 billion adjusted goal.
The BTr, itself, was able to generate P183.2 billion in revenues from January to June, more than double the P87.6 billion collections last year. It has also outperformed the bureau’s original full-year target of P82.3 billion.
Other agencies collected P53.7 billion in non-tax revenues, down by 31.95 percent year-on-year and 33.53 percent short of the P81.4 billion program due to the effect of community lockdowns on the operations of various national government agencies, the BTr said.
On the other hand, the BTr said government expenditures in the first semester grew by 26.63 percent to P2.01 trillion from P1.59 trillion in the same period in 2019. The figure, however, is still 8.58 percent short of the target spending of P2.2 trillion.
For June alone, the government posted a P1.8 billion surplus, a reversal of the P41.8 billion deficit recorded in the same month last year.
The BTr said this was a result of the 50.06 percent growth in government receipts, which outpaced the 26.65 percent expansion in government spending.
Revenues jumped to P351 billion as compared to P233.9 billion last year.
The BIR’s collections surged by 79 percent to P282.7 billion from P157.8 billion in June 2019, making a recovery from three consecutive months of contraction.
“BIR’s strong performance in June was attributed to the collection of the 2019 income tax dues during the month, as well as the resumption of economic activities due to the easing of some quarantine restrictions,” the Treasury said.
On the other hand, the BOC collected P42.6 billion in June, 16.97 percent lower than last year’s P51.3 billion “due to the adverse impact of the COVID-19 outbreak,” the BTr said.
Source: https://www.philstar.com/business/2020/07/23/2029867/budget-gap-widens-further-6-months