Lower expenditures cut February budget deficit

The budget deficit narrowed by more than 50 percent in February to P37.6 billion as government expenditures fell 12 percent and revenue collections rose 2 percent ahead of the coronavirus disease 2019 outbreak in the country.

Data from the Bureau of Treasury showed the February shortfall was 50.8 percent lower than the P76.4-billion deficit a year ago, but a reversal of the budget surplus in January. The figure reduced the budget deficit in the first two months by 54 percent to P14.6 billion from P31.8-billion deficit in the same period last year.

Revenues improved by 2.4 percent or P4.8 billion year-on-year to P206.8 billion in February, with tax collection making up for 92 percent of the total. Total revenues in the first two months reached P501.5 billion, up by 9.3 percent or P42.6 billion from a year earlier.

The Bureau of Internal Revenue collected P142.2 billion in February, up 4.8 percent or P6.5 billion from a year ago. BIR’s revenue performance also improved by 5.1 percent to P337.1 billion in the first two months.

Customs collection increased 1.3 percent in February to P44.8 billion as imports from China slowed amid the Covid-19 pandemic.

“The slow growth for the month was mainly due to the slowdown of importation from China amid the coronavirus outbreak. Nevertheless, the agency’s cumulative collection of P100.7 billion for the first two months of the year also surpassed the previous year’s level by 8.74 percent or P8.1 billion,” the Treasury said.

The Bureau of the Treasury’s income slid 36.25 percent in February to P5.9 billion because of lower dividend remittance for the period. In the first two months, BTr’s total income surged 82.26 percent to P34.2 billion driven by early dividend remittance from the Bangko Sentral ng Pilipinas in January and higher Bond Sinking Fund investment performance.

Non-tax revenue from other offices went up by 7.46 percent to P11.2 billion in February, pushing up the cumulative collection in the first two months by 5.58 percent to P23.5 billion.

Government expenditures shrank 12.22 percent in February to P244.4 billion from a year ago, largely due to the base effect of Internal Revenue Allotment of local government units for January 2019 which was released in February last year, as well as lower interest payments.

“Net of the said amount, disbursement for the month of February grew by 6.04 percent year-on-year. Meanwhile, total expenditures as of end-February increased to P516.0 billion, beating last year’s P490.7 billion outturn by 5.17 percent,” the Treasury said.

Excluding interest payments, productive spending amounted to P229.1 billion in February, down by 9.51 percent year-on-year. The two-month primary expenditures exhibited a 4.72-percent or P19.8-billion expansion from P419.4 billion posted a year ago.

Interest payments in February contracted by 39.32 percent year-on-year to P15.4 billion resulting from maturities and the premium on reissued Treasury Bonds as well as the timing of payments for global bonds.

“For the first two months of the year, interest payment was higher by 7.79 percent reaching P76.8 billion. Interest payments comprised 14.88 percent of the total expenditure for January to February 2020 compared to 14.51 percent a year ago,” the Treasury said.