Gov’t spending, tax take post double-digit decline

The government’s budget deficit dwindled by 22.42 percent in September to P138.5 billion from P178.6 billion a year ago, as both tax collections and public spending posted double-digit declines during the month, the Bureau of the Treasury said Friday.

Data, however, showed the budget deficit widened by nearly three times in the first nine months to P879.2 billion from a year earlier, although the figure was 32.30 percent below the revised program of P1.298 trillion for the period.

Government collections fell 10.2 percent in September to P212.4 billion from a year ago. About 91 percent or P193 billion were from taxes while the remaining 9 percent or P19.4 billion came from non-tax sources.

This resulted in nine-month collections to P2.143 trillion, down 7.9 percent from the same period last year, but 8.8 percent above the P1.970-trillion revised target. About 85 percent of the P2.52 trillion full-year program were collected as of end-September.

Collections by the Bureau of Internal Revenue fell 6.6 percent in September to P140.6 billion and 9.9 percent in the nine-month period to P1.444 trillion. The nine-month tally, however, was 10.19 percent higher than the revised program of P1.310 trillion for the period.

Customs revenue collections went down by 13.7 percent in September to P50.8 billion from a year earlier and by 15.3 percent to P398.0 billion in the first nine months. This surpassed the revised program of P372.2 billion by 6.96 percent.

The Bureau of the Treasury’s income of P8.6 billion in September declined by 19.35 percent year-on-year because of the 87.40-percent contraction in national government share from Philippine Amusement and Gaming Corp.’s income and the timing of remittance of interest on advances from government-owned -or controlled corporations which offsett the higher dividend collection from government shares of stocks.

The January-September BTr income of P201.6 billion was still 69.95 percent higher than P118.6 billion it collected last year and P1 billion more than the revised program. The nine-month BTr income also outperformed its original full-year target of P82.3 billion by P119.3 billion, buoyed by higher dividend collection and other government service income.

Revenues from other offices (other non-tax including privatization proceeds and fees and charges) amounted to P10.8 billion in September, down by 27.6 percent from the 2019 outturn due to the impact of the pandemic.

This reduced the cumulative collection to P87.1 billion from January to September, down by 26.7 percent year-on-year, but exceeding the revised program by 13.85 percent.

Meanwhile, government expenditures declined by 15.45 percent in September to P350.9 billion from a year ago, because of the timing of subsidy releases and the base effect of higher infrastructure spending in the same month last year.

Cumulative spending still achieved a 15.07-percent growth in the first nine months, boosted by COVID-19-related expenditures but was still 7.53 percent lower than the revised program of P3.269 trillion.

“The lag is attributed mainly to measures under RA No. 11494 or the ‘Bayanihan to Recover as One Act’ which are still to be implemented following the approval of the law last September 11, 2020,” the Treasury said.

Primary expenditures (net of interest payments) exhibited a year-on-year contraction of 17.32 percent for the month, reaching P307.6 billion. The January-September primary balance of P2.710 trillion grew by 16.14 percent or P376.5 billion over last year’s figure but still missed the revised program by 7.86 percent.

September interest payments amounted to P43.4 billion, or broadly equal to last year’s level as the favorable foreign exchange rates for foreign interest payments offset the marginal increase in domestic payments for reissued bonds.

Total interest payments of P313 billion in the first nine months grew by 6.55 percent or P19.2 billion from a year earlier, but was 4.58 percent lower than the revised program.

“Netting out interest payments from expenditures, the national government recorded a P95.2-billion primary deficit for September, 29.75 percent lower than the previous year’s deficit of P135.5 billion,” the Treasury said.

The resulting year-to-date primary deficit climbed to P566.2 billion, compared to the P5.2-billion primary deficit posted in the same period last year.

Topics: Bureau of the Treasury , interest payments , tax , foreign exchange
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