The national government’s budget deficit fell below the ceiling in the first-semester of the year due to lower-than-expected spending, the Bureau of the Treasury reported.
The Duterte administration’s January to June 2021 fiscal gap reached P716.1 billion, lower by 29 percent against the P1.018 trillion program set for the period.
According to the Treasury, the government registered lower than programmed funding gap after missing its expenditure target in the first-half of the year.
State spending totaled only P2.206 trillion, short by 9.5 percent against the P2.439 trillion goal.
“This is mainly due to the timing of subsidy releases awaiting requests from the concerned GOCCs [government owned and controlled corporations],” the Treasury said in a statement Tuesday, July 27.
The bureau added that the pending enactment of the bill that seeks to provide financial aid to distressed enterprises affected by the pandemic, or Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery, also fueled underspending.
Moreover, the Treasury said there were also outstanding checks as of June that have yet to be encashed by contractors or suppliers of line agencies.
The government had also some interest savings, the Treasury said.
Meanwhile, government revenue haul posted better-than-expected performance in January to June after both tax and non-tax collections exceeded targets.
State income hit P1.490 trillion, higher by 4.8 percent compared with the P1.422 trillion target. Of that amount, non-tax collections amounted to P146.9 billion, more than 44 percent against the P101.7 billion goal.
Likewise, the government’s tax haul breached the P1.320 trillion target in the first semester by 1.7 percent to P1.343 trillion.
Based on the Treasury report, the government’s two main tax agencies, the Bureau of the Internal Revenue (BIR) and Bureau of Customs, have outperformed their targets in January to June.
The BIR, which contributes about two-thirds to government coffers, collected P1.032 trillion, higher by 1.4 percent than the agency’s P1.018 trillion target.
The Customs bureau, on the other hand, raised P301.7 billion, above the P291.8 billion goal by 3.4 percent.
In June alone, the government’s fiscal balance swung back to a deficit after the payment of income taxes was reinstated to its original schedule this year.
To recall, the government had extended the filing of income tax returns (ITRs) to June last year instead of April in light of the implementation of strict quarantine measures.
According to the Treasury, that action has resulted in the 30.3 percent decline in revenue collection in June 2021.
The national government posted a budget deficit of P149.9 billion, a reversal of the P1.8-billion surplus recorded a year earlier.