At P14.1 billion
The Duterte administration’s budget in January swung to deficit from surplus in the previous year as the coronavirus-induced economic crisis continued to drag-down the government’s tax collections.
Data from the Bureau of the Treasury revealed on Wednesday, March 17, that the national government incurred a P14.1 billion fiscal gap in the first month of the year, a reversal of the P23 billion budget surplus registered in January 2020.
Based on the treasury report, the culprit for the budget deficit was the double-digit reduction in the government revenue collections primarily sourced from its two main tax agencies—the Bureau of Internal Revenue (BIR) and Bureau of Customs.
In January, revenues declined by 11.5 percent to P260.7 billion from P294.6 billion in the same month in 2020. Of that amount, tax haul dropped by 8.3 percent year-on-year to P232.7 billion from P253.8 billion.
According to the treasury, BIR collections were down to P182.2 billion, or 6.5 percent from P194.9 billion, while the Customs bureau saw its revenues declining by 15 percent to P47.3 billion from P55.9 billion.
The Treasury said “the continued economic disruptions brought about by the health crisis” dragged down the government’s revenue take in January.
Likewise, the national government’s non-tax revenues registered a contraction of 31 percent during the month from P40.9 billion a year ago to P28 billion. Of that total, the treasury’s income decreased to P18.7 billion from P28.4 billion.
The budget deficit, however, was tempered by the national government’s slower spending growth.
Based on the Treasury report, government expenditures grew by only 1.2 percent in January to P274.8 billion from P274.8 billion due to lower interest payments, which declined by 23 percent year-on-year to P47 billion.
As a percentage of revenue and expenditures, interest payments in January accounted for 18.04 percent and 17.11 percent compared to previous year levels of 20.84 percent and 22.61 percent, respectively.
Net of interest payments, however, spending grew by 8.37 percent year-on-year, or P17.6 billion from P210.2 billion recorded a year ago owing largely to higher allocations for local government units and disbursements by line agencies.
Primary expenditures represented 83 percent of the total disbursements for January this year.
Other spending of the national government, including COVID-19 response and infrastructure expenditures, increased by 8.4 percent to P227.8 billion from P210.2 billion.