MANILA, Philippines - The country’s budget deficit narrowed sharply in July as expeditures contracted despite government commitment to ramp up spending.
In a report, the Department of Finance said the government incurred a deficit of P1.8 billion in July, down 97 percent from P53.2 billion a year ago. This brings the Philippines’ budget to a deficit of P55.7 billion in the first seven months of the year, almost half of the P104.5-billion shortfall recorded in the same period a year earlier.
The January to July budget gap represents 21 percent of the target for the year.
The significant decline in budget deficit was largely driven by the slowdown in spending in July even as the government committed to ramp up investments in infrastructure.
Expenditures fell 15 percent to P168.5 billion in July. This brings year-to-date disbursements to P1.16 trillion, up six percent from a year earlier.
Revenue, on the other hand, grew 15 percent to P166.7 billion last month as a result of efficient collection of tax revenues. Aggregate collections from January to July reached P1.1 trillion, reflecting a 12- percent hike over the same period last year.
Collections by the Bureau of Internal Revenue rose 20 percent to P119.9 billion in July, registering the highest growth in monthly collections for the year. Overall BIR collections climbed 10 percent to P763.2 billion in the January-July period.
The Bureau of Customs (BOC) likewise continued its good performance, posting a 10-percent growth in collections last month amounting to P30.5 billion. The BOC has raised P203.9 billion so far this year, representing an increase of 18 percent year-on-year.
Interest payments fell by 10 percent to P48.2 billion in July as both domestic and foreign interest payments dropped.
“Netting out interest payments brought the primary balance in July to a surplus of P46.5 billion. For January to July, the primary surplus was at P152.2 billion, wider than last year’s P106.1 billion,” said Finance Secretary Cesar Purisima.
Purisima also noted that the govenrment’s efficiency in collecting taxes improved as the country’s tax effort improved to 13.7 percent.
Tax effort is the ratio of government’s tax collection to the country’s whole economy, as measured by gross domestic product (GDP).
Revenue effort also improved to 15.6 percent from 15.3 percent.