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Philippines: Budget gap widens
Collections plunge, spending soars due to lockdown
MANILA, Philippines — The national government incurred a budget shortfall in May as it continued to increase disbursements in response to the coronavirus disease 2019 or COVID-19 pandemic amid weak revenue generation, the Bureau of the Treasury (BTr) reported yesterday.
Based on the latest data from the Treasury, the government incurred a fiscal deficit of P202.1 billion in May, a reversal of the P2.6 billion surplus recorded in the same period last year.
This brought the country’s cumulative deficit to P562.2 billion from January to May, significantly wider than the budget gap of P809 million in the same period last year.
According to the BTr, the government’s fiscal position swung to a deficit in May as revenues amounted to only P151.5 billion, while expenditures reached P353.6 billion.
Revenues, in particular, fell by by more than 52 percent from P317.2 billion in May 2019.
Tax revenues, which made up 96 percent of the total, dropped by 45 percent to P145.2 billion from P265.6 billion last year, while non-tax collections plunged by nearly 88 percent to P6.3 billion from P51.6 billion.
Taxes collected by the Bureau of Internal Revenue (BIR) continued to contract as it reported revenues amounting to only P114.4 billion, 44.13 percent lower than the P204.8 billion in the same month in 2019.
“The agency’s weak performance was still due to the effect of the prolonged enhanced community quarantine which prompted the bureau to further extend its deadline for tax filing and payments to June 14,” the BTr said.
The Bureau of Customs (BOC) collections in May likewise dropped by more than 47 percent to P30.8 billion from P58.2 billion last year “due to the economic restrictions brought about by the COVID-19 pandemic,” the Treasury said.
The BTr, in itself, generated P2.4 billion in revenues, down by 93.3 percent from P35.7 billion a year ago. This was attributed to the timing of remittances of dividends from state corporations which happened earlier this year due to the implementation of the Bayanihan to Heal as One Act. Last year, GOCCs remitted their dividends in May.
Revenue from other offices, including privatization proceeds and fees and charges, amounted to P3.9 billion, 75.5 percent lower from the previous year’s level of P16 billion.
The national government’s revenues as of end-May declined by 16 percent to P1.102 trillion from P1.31 trillion in the same period last year.
BIR collections went down by 25.84 percent to P673.7 billion from P908.5 billion last year, while BOC revenues dropped by 16.37 percent to P210.5 billion from P251.7 billion.
On the other hand, Treasury data showed that expenditures in May grew by 12.38 percent to P353.6 billion from P314.7 billion in the same month in 2019.
“The acceleration was propelled by the releases for the second tranche of the Small Business Wage Subsidy (SBWS) under the SSS,” the BTr said.
Primary spending amounted to P335.3 billion, up by 13.65 percent from P295 billion last year, while interest payments reached P18.4 billion, 6.69 percent lower than last year’s level of P19.7 billion.
From January to May, the national government’s disbursements rose by 26.63 percent to P1.664 trillion from P1.314 trillion in 2019.
Excluding interest payments from expenditures, the Treasury said the government recorded a P183.8 billion primary deficit in May. This was a reversal of the P22.2 billion primary surplus posted in the same month last year.
It brought the year-to-date primary deficit to P402.1 billion, also a reversal of last year P150.2 billion primary surplus.
Source: https://www.philstar.com/business/2020/06/24/2023023/budget-gap-widens