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Philippines: Budget deficit hits P1.67 trillion in 2021
MANILA, Philippines — The country’s budget deficit expanded by 22 percent to P1.67 trillion in 2021 from P1.37 trillion in 2020, as government spending outpaced the recovery in collections due to pandemic requirements, according to the Bureau of the Treasury (BTr).
The Treasury said the deficit, when measured against gross domestic product (GDP), rose to 8.61 percent from 7.65 percent in 2020.
Broken down, revenues raised by the government rose by about five percent to P3 trillion from P2.86 trillion, as the resumption of economic activities pushed tax collections up. However, spending by the government expanded by almost 11 percent to P4.68 trillion from P4.23 trillion on sustained funding for pandemic measures.
Taxes collected by revenue agencies, led by the Bureau of Internal Revenue (BIR) and Bureau of Customs, grew by 10 percent to P2.74 trillion from P2.5 trillion. Non-tax income generated by the Treasury and other offices, on the other hand, slipped by over 24 percent to P265.8 billion from P351.5 billion.
The Customs managed to surpass its P616.7 billion target by at least four percent, with collection of P643.6 billion while the BIR missed out on its P2.08 trillion goal by more than P3 billion.
On the spending side, principal expenditures swelled by more than 10 percent to P4.25 trillion in 2021 from P3.85 trillion in 2020, composed mostly of national government disbursements and allotments to local government units.
Likewise, interest payments remitted to lenders went up by 13 percent to P429.4 billion from P380.4 billion as the government began paying the debts it acquired to contain the spread of the virus.
The Treasury said state revenues, as a share of GDP, declined to 15.5 percent last year from 15.92 percent in 2020.
In contrast, spending when measured against economic output rose to 24.12 percent from 23.57 percent, as the government has yet to consolidate its fiscal position to rebalance its cash flow.
The government plans to cut its deficit to P1.65 trillion or 7.7 percent of GDP this year.
Source: https://www.philstar.com/business/2022/03/02/2164230/budget-deficit-hits-p167-trillion-2021