Fiscal deficit widens to P193 billion in 6 months

MANILA, Philippines — The fiscal deficit of the national government widened to P193 billion in the first half from P154.5 billion in the same period last year as both revenues and disbursements posted strong growth during the period, according to the Bureau of the Treasury (BTr).

Despite this, the deficit still fell short of the P264.3 billion ceiling set by economic managers for the period, with the surplus in revenues outpacing that of expenditures.

“National government revenue collection and expenditures exceeded their respective programs for the first half, resulting in a P193 billion deficit, which is 27 percent lower than programmed alongside 25 percent year-on-year growth,” the BTr said.

For June alone, the fiscal deficit narrowed by 40 percent to P54.3 billion from the P90.9 billion posted in the same month in 2017 on the back of strong revenue growth, according to the BTr.

A deficit occurs when government’s expenditures exceed the revenue that it generates.

From January to June, national government revenues reached P1.41 trillion, 20 percent or P234.2 billion higher than last year’s level of P1.18 trillion. This was also eight percent higher than the first half revenue target of P1.30 trillion.

The Bureau of Internal Revenue accounted for the bulk of total tax collections with P964.5 billion, 14 percent higher than the P848 billion in the same period last year and three percent above the P938.7 billion goal.

Revenues from the Bureau of Customs (BOC) likewise jumped by 33 percent to P279.4 billion from P210.3 billion a year ago. The agency also surpassed the P270.3 billion target by three percent.

“Proper valuation and tariff classification of goods, as well as a strengthened campaign against illegal trade, contributed to the sustained good performance of the Bureau,” the BTr said.

The BTr itself reported an income of P66.1 billion in the first semester, which was 25 percent up year-on-year and 110 percent higher than the target.

The agency has already exceeded its full-year target by P10.4 billion on account of higher dividend collections from government -owned and -controlled corporations.

For June alone, revenues reached P224.2 billion, 25 percent up from P179.8 billion a year ago.

Meanwhile, total expenditures as of end-June grew 20 percent to P1.60 trillion as compared to the P1.33 trillion recorded in the same period in 2017.

This was also two percent higher than the disbursement program for the period, which was set at P1.57 trillion.

Of the total spending, interest payments reached P165.5 billion, nine percent higher than last year, but four percent below program. The BTr said payments also accounted for just 10.3 percent of total disbursements, down from 11.4 percent a year ago.

Expenditures for June alone, inched up by three percent to P278.5 billion compared to the P270.7 billion recorded last year.