Deficit reached P8.5 billion in June

According to the Institute for Development and Econometric Analysis, Inc. (IDEA) NewsBriefs, a regular publication produced by IDEA, government borrowing in June amounted to PhP8.5 billion. Total fiscal deficit for the first half of the year, meanwhile, totaled PhP51.3 billion, higher by PhP16.9 billion from the same period last year. Despite this, government borrowing for the first half fell short of the target, with was set at PhP847 billion as per National Treasury.

Revenue collection in June amounted to PhP131.1 billion while total revenues for the first half reached PhP839.5 billion. This is higher than the levels recorded for the first half last year which amounted to 760.9 billion. The increase in revenue was attributed to increase in the Bureau of Internal Revenue’s collections, which grew by 14 percent on a year-to-year basis.

Expenditures, which totaled PhP139.5 billion in June, grew by 10 percent compared to the same period last year. The first half of he year recorded PhP890.8 billion worth of disbursement. This is 12 percent higher than the disbursement from the first semester in 2012, which totaled 157.1 billion. Meanwhile, the Treasury also reported that the government recorded a surplus, which amounted to PhP105.8 billion for the first half of the year. Financial Sector

Likewise per same published report, bids for the government’s first retail Treasury bond (RTB) totaled PhP271.79 billion, exceeding the PhP30 billion deal size. According to National Treasurer Rosalia de Leon, they can tap up to PhP150-billion of borrowings. The government had already awarded PhP100 billion. Coupon rates for RTBs due in 2023 ended up at 3.25 percent, lower by 16 basis points from its 3.41 percent level last February 19. The treasurer attributed the liquidity to the possible upgrade from Moody’s.

Per IDEA, Moody’s Investors Service recognized the increased fiscal effort of the Philippine government during its visit this week to the Bangko Sentral ng Pilipinas (BSP). Government expenditures improved from PhP1.56 trillion spent in 2011 to 1.78 trillion in 2012. Target level of expenditure for 2013 is PhP1.98 trillion, with the government currently at PhP890.8 billion. Revenue also increased from PhP1.34 trillion in 2011 to PhP1.535 trillion in 2012. Revenue for this year, which is set at PhP1.746 trillion, is at PhP 839.8 billion as of June. Improved fiscal efforts resulted to a possible upgrade from the said debt watcher.

Furthermore, according to Economic Planning Secretary Arsenio Balisacan, the country will maintain strong growth for the second quarter. Main drivers of growth are still expected to be manufacturing, private and public construction, consumption and remittances, as well as investments. Trade growth targets which is currently set at 10 percent for imports and 12 percent for exports, are expected to be lowered to a single-digit level.

Lastly, the BSP reported that domestic liquidity in June, which amounted to PhP5.7 trillion, increased by 20.3 percent compared to last year’s figures. On a monthly basis, money supply grew 4.1 faster than the 2.9 percent growth in May. The increase in supply was attributed to sustained expansion in the net domestic assets. Meanwhile, bank lending in June grew by 12.33 percent, falling from the 13.28 percent level last May according to IDEA.

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