Philippines: Budget deficit widens to P61.4B in October

The government’s fiscal gap ballooned year-on-year to P61.4 billion in October amid lower revenues and expenditures during the month, according to the Bureau of the Treasury (BTr).

Data from the Treasury bureau showed on Wednesday that the shortfall was bigger than the P49.3-billion deficit a year earlier, but smaller than the P138.5-billion gap in September.

“The budget gap widened behind a 12.75-percent year-over-year contraction in revenue receipts despite a 6.84-percent reduction in disbursements” the BTr said in a statement.

Revenues slid to P228.2 billion in the 10th month from P261.6 billion year-on-year while expenditures slipped to P289.6 billion from P310.8 billion a year ago.

In September, revenues declined by 10.19 percent and spending decreased by 15.45 percent.

The October deficit brought the year-to-date gap to P940.6 billion, higher than the P348.3 billion in the first 10 months of 2019. It is, however, 27.53 percent lower than the government’s revised program of a P1.298-trillion budget shortfall for the period.

The Bureau of Internal Revenue contributed the bulk of revenues in the 10th month with P152.1 billion, a 14.62-percent plunge from P178.1 billion a year earlier, but a 8.17-percent jump from the September amount.

The Bureau of Customs contributed P50.6 billion, a 12.25-percent drop from P57.7 billion in October 2019.

Other offices recorded P1.1 billion in tax revenues a month ago. As a result, total tax revenues dropped by 14.22 percent to P203.8 billion, faster than September’s 8.51-percent fall.

Nontax earnings hit P24.4 billion, with the Treasury contributing P6.9 billion, down 34.93 percent year-on-year.

The BTr traced this to the national government’s (NG) reduced share from the profit of the Philippine Amusement and Gaming Corp. and the Manila International Airport Authority, as well as interest income from NG deposits. It was partially offset by a 57.38-percent increase in bond sinking fund investment earnings.

Revenues from other offices surged by 31 percent to P17.5 billion from the year-ago’s P13.4 billion, which the Treasury attributed to “the P10-billion proceeds from the transfer of Municipal Development Fund Office government securities assets to the NG in compliance with Section 4 (ttt) of RA (Republic Act) 11494, or the ‘Bayanihan to Recover as One Act.”

It said state spending in September was smaller because of “the base effect of the one-off pension differential releases for the military and uniformed personnel in October last year, as well as the expected lower capital outlays during the year because of the pandemic.”
The bulk of government spending — P267.5 billion — was for primary expenditures, which tumbled by 7.79 percent from P290.1 billion a year earlier.

Interest payments, reaching P22.1 billion, accounted for the rest.

The bureau said this amount, a 6.49-percent increase from the October 2019 figure, was “due to the issuance of a new five-year FXTBs (fixed-rate Treasury bonds)” that month.

Netting out interest payments, the primary balance reached a fiscal deficit of P39.3 billion in October, bringing the 10-month tally to a P605.5-billion gap.

This year’s shortfall is seen to reach P1.81 trillion, or 9.6 percent of the country’s gross domestic product, according to the latest estimates from the interagency Development Budget Coordination Committee.

Source: https://www.manilatimes.net/2020/11/26/business/business-top/budget-deficit-widens-to-p61-4b-in-october/801585/