The national government’s budget deficit narrowed in July this year due to slower public spending and higher revenue haul, the Bureau of the Treasury reported.

The Duterte administration trimmed the government’s fiscal gap last month by 13.6 percent to P121.2 billion from P140.2 billion in July last year, data from the treasury bureau showed Tuesday, August 24.

According to the treasury, the lower budget gap was registered after government revenues improved 9.2 percent year-on-year while expenditures grew by only 0.69 percent.

Revenue collections reached P256.1 billion, exceeding last year’s outturn of P234.5 billion. Of that amount, tax haul registered a 9.2 percent rise from P210.4 billion to P229.8 billion.

Based on the treasury data, collections of the Bureau of Internal Revenue (BIR) and the Bureau of Customs jumped 7.4 percent and 14.7 percent, respectively. Other offices also registered a 13.5 percent growth in tax revenue.

Moreover, the government’s non-tax collections went up 9.1 percent last month to P26.3 billion from P24.1 billion.

“The significant increase for the period was largely due to higher dividend remittances, national government share from PAGCOR and interest income from government deposits,” the treasury said.

Public spending, on the other hand, expanded at a much slower pace in July to P377.3 billion from P374.7 billion a year earlier.

The treasury said the “modest increase” can be attributed to the one-off social amelioration program of the government whose implementation of the second tranche was still ongoing in July 2020.

“The timing of subsidy releases to the Philippine Health Insurance Corp. (PHIC) and National Housing Authority (NHA) also weighed down on the growth of disbursements for the period,” the bureau added.

For the first seven months of the year, the government's fiscal deficit reached P837.3 billion, up 19.5 percent compared with P700.6 billion in the same period last year.

The latest budget deficit figure accounts for 45.1 percent of the national government’s full year ceiling of P1.855 trillion.

At end-July, revenues increased 3.5 percent to P1.746 trillion from P1.688 trillion in the previous year, while expenditures rose 8.2 percent from P2.388 trillion to P2.584 trillion.

Interest payments increased by 8.3 percent, with disbursements amounting to P267.6 billion in January to July.

Netting out the interest payments, the government recorded a primary deficit of P569.7 billion, higher by 25 percent compared with P453.6 billion last year.