The government’s budget deficit widened by 25 percent in the first half to P193 billion from P154.5 billion a year ago, as both expenditures and revenue collection grew 20 percent, data from the Treasury show.
The six-month fiscal deficit was 27 percent lower than the programmed P264.3 billion, as spending growth slowed down to a single digit in June.
Data showed the government in June incurred a budget shortfall of P54.3 billion, or 40 percent lower than the P90-billion deficit registered in the same month last year.
Revenue collections in January to June climbed 20 percent to P1.41 trillion from a year earlier and exceeded the target by 8 percent. Revenues in June surged 25 percent to P224.2 billion.
Tax collections by the Bureau of Internal Revenue jumped 14 percent in the first half to P964.5 billion and exceeded the goal by 3 percent.
“The bureau credits improved tax administration and the impact of the Tax Reform for Acceleration and Inclusion Law for the strong performance during the first half of the year. However, the BIR managed just 4 percent year-on-year growth in collections in June, its lowest for 2018, bringing in P136.8 billion for the month,” the Treasury said.
The Bureau of Customs collected P279.4 billion in the six-month period, up by 33 percent from P210.3 billion a year ago. The Treasury said proper valuation and tariff classification of goods and a strengthened campaign against illegal trade contributed to the sustained good performance of the bureau.
The Customs collected P50 billion in June, or 41 percent better than its collections a year earlier. This continued the double-digit year-on-year growth since the beginning of the year and 12th straight since July 2017.
The Treasury said its income hit P66.1 billion in the first semester, which was more than double the P31.5 billion program and 25 percent higher year-on-year.
Meanwhile, total expenditures accelerated 20 percent in the first half to P1.603 trillion from P1.330 trillion a year ago.
“This is mainly due to a 22-percent boost in primary expenditures [total disbursements net of interest payments],” the Treasury said. It also exceeded the target by 2 percent or P34.4 billion.
Government spending growth slowed down to just 3 percent in June to total P278.5 billion from P270.7 billion a year ago.
Data showed that of the total expenditures, interest payments amounted to P165.5 billion in the first half. Aggregate interest payments is still 4 percent within the program and generated savings of P7.5 billion despite a 9-percent year-on-year growth.
“Total interest payments also accounted for just 10.3 percent of total disbursements, down from 11.4 percent a year ago. Interest payments amounted to P24.1 billion in June and was up by 25 percent from a year ago mostly due to domestic interest payments of P19.5 billion including those for 5-year retail treasury bonds issued in December 2017,” the Treasury said.
Foreign interest payments hit P4.6 billion, up by 9 percent on weaker peso and the increase in floating interest rates for the month.
The January to June primary deficit of P27.5 billion was P24.6 billion more than P2.9 billion in 2017 but 70-percent below program.