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Friday, March 29, 2024

Budget deficit widens to P120b

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The government incurred a P120.3-billion budget deficit in the first half, as the former Aquino administration increased public expenditures in its last six months in office amid weak revenue growth.

Data from the Finance Department showed the fiscal deficit in the first half was a reversal of the P13.7-billion budget surplus the government posted in the same period in 2015. The budget deficit in June amounted to P45.2 billion, lower by 38 percent than P72.7-billion budget gap a year ago.

The government said netting out debt interest payments, it still posted a primary surplus of P33.4 billion in January to June, or 80 percent lower than P169.9-billion primary surplus recorded a year ago.

Revenues rose 1 percent in the first six months to P1.1 trillion, while expenditures increased 14 percent to P1.22 trillion.

Bureau of Internal Revenue collections rose 11 percent to P783.4 billion in the six-month period while Bureau of Customs’ revenues increased 7 percent to P190.6 billion. Bureau of Treasury’s collection declined 5 percent to P63.7 billion.

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Meanwhile, debt interest payments, which took up nearly 13 percent of total spending, dropped 2 percent to P153.7 billion from last year’s P156.1 billion.

Finance officials said the assessment of fiscal performance against the government’s updated budget target in the first half was not yet available.

“The updated budget target is expected to be finalized by the DBCC [Development Budget Coordination Committee in its next meeting,” DoF said.

The new economic managers under the Duterte administration vowed to accelerate public spending this year by fast-tracking infrastructure development necessary to sustain the

rapid modernization of the economy.

Under the new administration, government infrastructure spending is projected to reach 6 percent of gross domestic product, exceeding the previous administration’s 5-percent goal.

Government revenues in June rose 7 percent to P175.6 billion, while disbursements fell 7 percent to P220.8 billion.

DBCC earlier revised the medium-term fiscal program, with a deficit ceiling equivalent to 3 percent of GDP to allow more public investments in infrastructure and social services.

DBCC also revised the 2016 deficit ceiling to 2.7 percent of GDP from the original 2 percent, following the first-half performance of revenue and expenditure.

The Cabinet-level committee also cut the 2016 economic growth target to 6 percent to 7 percent from the earlier goal of 6.8 percent to 7.8 percent.

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