Gov't fiscal gap swells on weak revenues
The national government posted a significantly wider budget deficit last month despite the Duterte administration's almost flat spending due to dwindling revenues amid the pandemic, data from the Bureau of the Treasury showed.
Official data showed the national government’s fiscal gap swelled by 1,510 percent to P40.1 billion from P2.5 billion in the same month last year.
The sizeable jump in budget deficit was owing to the 13 percent contraction in government revenues, amounting to P243.2 billion from P279.7 billion in August in 2019.
“Decrease in government receipts due to the continued impact of the pandemic outbreak,” the Treasury said in a statement.
Tax collections last month declined by 11 percent to P233.1 billion from P261.8 billion in the previous year after revenues of the Bureau of the Internal Revenue (BIR) and Bureau of Customs decreased by 8.5 percent and 17 percent, respectively.
The BIR raised P187.9 billion, lower than last year’s P205.6 billion, while the Customs collections dropped from P53.6 billion to P44.4 billion in August.
Likewise, non-tax revenues have been slashed by 44 percent in August to P10.1 billion from P18 billion a year ago.
Total government expenditures, meanwhile, registered a minimal growth of 0.38 percent from P282.2 billion in the previous year to P283.3 billion in August 2020.
Based on the Treasury data, the marginally increase in spending was driven by interest payments, which increased by 15 percent to P22.5 billion last month from P19.6 billion.
Other expenditures, which composed of infrastructure spending, operations, among others, fell by 1.9 percent from P262.6 billion from P260.8 billion in August this year.
Netting out interest payments from expenditures, the national government reverted to a primary deficit of P17.5 billion in August from P17.1 billion surplus in the same month in 2019.
At end-August, the national government’s deficit spending level stood at P471.1 billion, up by 462 percent compared with P130.2 billion in the same period last year, but only a quarter of the Duterte administration’s revised ceiling of P1.815 trillion for 2020.
Total revenues in the first eight-moths reached P1.661 trillion, down by 160 percent from P2.091 trillion, but already 76.6 percent of the government’s new full-year target of P2.52 trillion.
Expenditures, on the other hand, jumped by 21 percent to P2.672 trillion at end-August from P2.212 trillion a year ago, equivalent of 51 percent of the P4.335 trillion revised goal for 2020.