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Phlippines: Budget deficit widens to P154.5 B in H1
MANILA, Philippines – The national government’s fiscal deficit widened in the first half due to lower than expected revenue during the period, the Bureau of the Treasury (BTr) reported yesterday.
According to the latest cash operations report of the Treasury, the budget deficit in the first semester rose 28 percent to P154.5 billion from the P120.3 billion recorded in the same period in 2016.
A deficit occurs when government expenditures exceed the revenue that it generates.
Budget Secretary Benjamin Diokno said the budget deficit during the first six months was also higher than the P143.8 billion programmed by the government for the period.
However, Diokno said the higher than expected budget deficit “should not be a cause for concern” as the annual deficit target is P482.1 billion.
He added the deficit reflects the improvement in spending during the period.
“Expenditures is on the dot. Underspending, the plague of the previous administration, appears to be a thing of the past,” Diokno said.
According to Treasury data, revenue collection in the first six months rose seven percent to P1.18 trillion from P1.10 trillion in the same period last year.
However, this is one percent or P16.6 billion behind the government’s program of P1.19 trillion for the first semester, due to behind-target tax collections from the Bureau of Internal Revenue and the Bureau of Customs.
BIR, for its part, collected P848 billion in the first six months, higher by eight percent that last year’s level, but four percent below the target for the period.
The BOC also saw a 10 percent improvement in collections at P210.3 billion, but fell short of the P217.7 billion target for the first half.
The shortfall was cushioned by non-tax revenue, which amounted to P107.3 billion, 26 percent higher than the P85.2 billion target. However, this was down nine percent from the P118 billion posted the same period in 2016.
Finance Secretary Carlos Dominguez said the BIR and the BOC would make up for the deficit in their collections by the third quarter.
“We are expecting P30 billion from Mighty (Corp.), which will wipe out the P16.6 billion undercollection. This also proves that we need the tax reform so we can collect more taxes,” Dominguez said.
Meanwhile, disbursements from January to June grew nine percent to P1.33 trillion from P1.07 trillion last year. It likewise almost met the P1.336 trillion spending program of the government for the first semester.
Sought for comment, Emilio Neri, chief economist at the Bank of the Philippine Islands (BPI), said the latest national government performance should translate to sustained rapid growth for the economy in the second quarter of the year. The country’s economy expanded 6.4 percent in the first quarter.
“While the collection shortfall is somewhat of a concern, it actually boosts the DOF’s campaign for TRAIN ( Tax Reform for Acceleration and Inclusion Act) phase one in the Senate,” Neri said.
Source: http://www.philstar.com/business/2017/07/25/1721074/budget-deficit-widens-p154.5-b-h1