The national government incurred a budget deficit of P50.7 billion in July, partly as consequence of revenues having declined by 5 percent year-on-year, data from the Bureau of the Treasury (BTr) showed.
This developed in a year when public-sector spending were to ramp up significantly against last year’s as consequence of the plan similarly to ramp up the infrastructure buildup program.
According to the BTr, total revenues in July 2016 fell 5 percent, owing to reduced nontax income from the operations of the BTr and other offices, even as expenditures rose 5 percent as a result of strong public spending.
In July the budget deficit widened to P50.7 billion, higher by 57 percent compared the year ago deficit of P32.2 billion, National Treasurer Roberto B. Tan said in a report to Finance Secretary Carlos G. Dominguez III.
This brought the seven-month fiscal gap to P171.0 billion, less than half of this year’s P388.87-billion deficit program, but higher than the P18.5-billion shortfall recorded in the same period in 2015.
Cumulatively, total revenues amounted to P1.27 trillion at end-July 2016, increasing by 1 percent from the P1.26 trillion registered a year ago. The netting-out of the transfer of coconut-levy assets in May 2015 improved the seven-month revenue growth by 6 percent. Disbursements also grew by 12 percent year-on-year to P1.44 trillion in 2016 from P1.28 trillion the previous year.
Interest payments during the month amounted to P40 billion, down 25 percent from last year’s P53.1 billion. For the January-to-July period, interest payments declined by 7 percent to P193.7 billion, from last year’s P209.2 billion.
Total expenditures in July reached P220.9 billion, 5 percent higher year-on-year from the P210.6 billion in July 2015. From January to July this year, expenditures amounted to P1.442 trillion, higher by P159.5 billion, or 12 percent, from the registered expenditures recorded in the same period last year of P1.282 trillion.
From January to July of this year, the tax collection of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), which accounts for 90 percent of government revenues, increased by 9 percent to P1.132 trillion along with other government agency-collected tax revenues.
“Tax collections of state revenue agencies continued to grow during the first seven months of 2016, helping the government finance its accelerated spending program to further boost the country’s economy and transform it into a more inclusive one,” Tan said.
Collections by the BIR fell 1 percent in July to P117.4 billion, but the agency’s seven-month haul grew by 9 percent to P901.0 billion, from P824.1 billion in the same period last year.
The BOC improved its year-on-year collection in July by 3 percent, adding P31 billion to its total. This helped grow its end-July 2016 collection by 6 percent to P221.5 billion.
Tax collection from other government agencies contracted by 26 percent to P11 billion. This was again due to nonrecurring income from the P60.1-billion transfer of coconut-levy assets in May 2015.
“These collections for the year have so far decreased by more than half, to P66.3 billion from P140.6 billion last year,” he added.
Collections form the BTr also fell by 36 percent in July to P9.1 billion. Tan traced the BTR’s revenue decline to lower investment income from the Bond Sinking Fund (BSF) and Securities Stabilization Fund (SSF), as well as from the regular deposits of the general fund.
Collectively, the BTr already collected P72.8 billion thus far this year, which was weaker by 10 percent compared to P81.2 billion last year.
Interest payments in July amounted to P40 billion, decreasing by 25 percent from last year’s P53.1 billion. From January to July, interest payments fell 7 percent to P193.7 billion, from the P209.2 billion in the same period last year.
Netting out interest payments, the government ended the first seven months with a P22.7-billion primary surplus, lower than last year’s P190.7-billion balance, indicating better budget execution.
The national government’s deficit performance is improving but at a controlled pace, leaving ample fiscal room to support growth for the remainder of the year, according to the BTr.
Finance chief Dominguez earlier said the government will address the issue of underspending it inherited from the previous administration.
The plan to boost infrastructure spending, which is a major driver for growth, is targeted to equal 6 percent of GDP, exceeding the previous administration’s 5-percent goal.