The Duterte administration closed the books with a lower than expected budget deficit in the first semester, driven mainly by higher revenue collection by the Bureau of the Customs (BOC) from expensive fuel imports.
The Bureau of the Treasury reported on Tuesday, July 26, that the national government incurred a P674.2 billion fiscal deficit from January to June 2022, below the P828.7 billion ceiling set by the previous administration.
Likewise, the six-month budget gap was lower by six percent compared with the P716.1 billion recorded in the same period last year.
Based on the Treasury data, improved fiscal performance is attributable to above target revenue haul of the Customs bureau at P396.7 billion. This amount was 10 percent higher against the P360.7 billion goal and 31 percent more than last year’s P301.7 billion.
Finance Secretary Benjamin E. Diokno had said that Customs exceeded its collection target in the half of the year due to pricey oil imports.
“The Bureau of Customs (BOC) recorded a new high for the year,” the Treasury said in a statement. “This also marked 17 straight months of positive growth.”
“The agency attributed the gains from anti-smuggling measures including the fuel marking program which was further boosted by elevated oil prices and peso depreciation,” the agency added.
Customs better collection performance compensated for the Bureau of Internal Revenue’s (BIR) behind target collections.
The BIR, which contributes about two-thirds to government coffers, raised P1.132 trillion at end-June, three percent lower against the P1.165 trillion target. However, this was 10 percent better than P1.032 trillion in the same period in 2021.
The BIR and Customs collections helped to bring the government’s total revenues in the first six-months to P1.727 trillion, exceeding the P1.648 trillion target and the P1.490 trillion collections in the previous year.
Broken down, tax revenues made up 89 percent or P1,541.2 billion of the total while non-tax collections contributed the remaining 11 percent or P186.3 billion.
Meanwhile, the Duterte administration’s public spending fell below the P2.477 trillion target in the first semester by three percent to P2.402 trillion.
Based on the Treasury report, the lower than programmed expenditures was due to weaker operating expenses at P2.144 trillion versus the 2.224 trillion goal. Year-on-year, it grew nine percent form P2.206 trillion.
Interest payments at end-June totaled P257.2 billion, up 23 percent compared with P208.5 billion last year and above the P253.1 billion target by 1.6 percent.
The government registered a primary deficit of P417 billion from January to June, a decline of 18 percent from P507.5 billion.
In June alone, the national government’s budget deficit increased 44 percent to P215.5 billion from P149.9 billion in the previous year.
Revenues during the month jumped 18 percent to P290.3 billion from P245.6 billion, while expenditures reached P505.8 billion, up 28 percent from P395.4 billion a year earlier.