Budget gap widens in July 2018

MANILA, Philippines — The national government’s fiscal deficit widened to P86.4 billion in July as the growth in public spending outpaced the increase in government revenues, the Bureau of the Treasury (BTr) reported yesterday.

According to the latest cash operations report of the Treasury, the fiscal deficit surged by 71 percent to P86.4 billion in July from the P50.5 billion in the same period in 2017.

This brought the first seven months deficit to P279.4 billion, 36 percent higher than the P205 billion posted in the same period last year.

The BTr attributed the sharp increase in the fiscal deficit to the strong 34 percent increase in spending, while revenue collection grew by only 24 percent.

Government revenues rose to P241.7 billion compared to the P194.6 billion recorded in the same month last year. About P217.8 billion of the amount came in the form of tax revenue, while the remaining P23.9 billion was collected as non-tax revenue.

The BTr said collections of the Bureau of Internal Revenue (BIR) recovered in July after a slowdown in June, growing 19 percent to P164 billion from last year’s level of P138.1 billion.

Revenue generated by the Bureau of Customs also jumped by 49 percent to P52.1 billion from P35 billion last year.

“Strong enforcement and revenue enhancement measures, coupled with the weaker peso and higher oil price allowed the BOC to sustain its strong year-on-year growth for the seventh consecutive month of the year,” the BTr said.

About P11.8 billion of the total non-tax revenue was accounted for by the BTr, 39 percent up from the previous year due to higher remittance of dividends from government-owned and -controlled corporations, particularly the Philippine Amusement and Gaming Corp. and the Manila International Airport Authority.

Non-tax collections from other offices also contributed P12.2 billion for the month, up six percent from last year’s level.

Year-to-date, government revenue reached P1.65 trillion, 21 percent higher than P1.37 trillion a year ago. The amount accounted for around 58 percent of the government’s P2.85 trillion target for the whole year, according to the BTr.

Meanwhile, the BTr said the national government’s disbursements for July regained momentum after a slower pace the previous month, growing by 34 percent to P328.1 billion from the P245.1 billion in the same month in 2017.

Primary expenditures made up 86.3 percent or P283.3 billion of the total spending in July, up by 41 percent from the P200.5 billion recorded in July last year.

The remaining P44.8 billion went to interest payments, representing 13.7 percent of total disbursements, the same ratio as its July 2017 level.

From January to July, government expenditures grew by 23 percent to P1.93 trillion compared to the P1.58 trillion recorded a year ago. The Treasury said the amount already represents 57 percent of the P3.37 trillion full year expenditure program.

Netting out interest payments from expenditures, the BTr said the national government incurred a primary deficit of P41.5 billion, seven times higher than last year’s level of P5.9 billion. Year-to-date, primary deficit settled at P69 billion, almost eight times the P8.8 billion recorded a year ago.