Budget deficit jumped 27% to P716b in first semester

The government’s fiscal position reverted to a P149.9-billion deficit in June from a P1.8-billion surplus in the same month last year following 13-percent increase in expenditures and a 30-percent decline in revenue collection as the payment of income taxes was maintained on its original schedule, the Bureau of the Treasury said Tuesday.

Data from the Treasury showed the government had a six-month budget shortfall of P716.1 billion, up 27.78 percent from the P560.4-billion deficit registered a year ago. However, it was 29.66 percent behind the first-half programmed deficit of P1.018 trillion.

The Treasury said collections in June fell 30 percent to P245.6 billion, or P105.4 billion lower than last year’s tally of P351.0 billion. Despite the June slump, the six-month collection of P1.490 trillion this year still topped the end-June 2020 outturn by 2.55 percent or P37.0 billion on higher tax collections. It also outperformed the revised forecast of P1.421 trillion by 4.82 percent.

“Of the total, 90 percent was raised through taxes, while the remaining 10 percent was made up of non-tax revenue,” the Treasury said.

The Bureau of Internal Revenue collected P159.4 billion in June, down by 43.62 percent year-on-year on the high base effect of extending income tax payment to June last year in light of the implementation of strict quarantine measures.

The BIR’s cumulative collection in the first half still managed to grow by 7.88 percent to P1.031 trillion from a year earlier and surpassed the revised goal of P1.017 trillion by 1.39 percent.

Customs’ net collection reached P52.2 billion in June, exceeding last year’s achievement by 22.48 percent or P9.6 billion and marked the fourth straight month of double-digit growth, boosted by improving import volume and agency collection efforts.

The Bureau of Customs’ cumulative balance as of end-June hit P301.7 billion, or 19.22 percent higher from a year ago and 3.40 percent better than the adjusted program of P291.8 billion.

Income collected by the Bureau of the Treasury rose 84 percent in June to P20.8 billion. “The P12.2-billion year-on-year increase in dividend remittances as well as higher remittance of national government share from PAGCOR profit drove the growth for the month,” the Treasury said.

The Treasury’s six-month collection, however, narrowed by 55.45 percent to P81.6 billion on higher income and dividend remittances last year in line with the implementation of RA No. 11469 or the “Bayanihan to Heal As One Act.”

Meanwhile, government’s expenditures in June increased 13 percent to P395.4 billion from a year ago, on increased disbursements for the infrastructure program of the Public Works Department and capital outlay projects under the Armed Forces of the Philippines Modernization Program.

Total expenditures in the six-month period reached P2.206 trillion, outpacing the previous year’s actual disbursement by 9.57 percent. However, it missed the P2.439-trillion revised program by 9.56 percent.

“This is mainly due to the timing of subsidy releases awaiting requests from the concerned GOCCs [government-owned and -controlled corporations], the pending enactment of the GUIDE bill, outstanding checks as of end-June which are yet to be encashed by contractors or suppliers of line agencies, as well as interest savings,” the Treasury said.

Ninety-two percent or P365.5 billion of total expenditures went to primary spending (net of interest payment) which grew by 13.63 percent from the June 2020 level. The P1.997-trillion primary expenditures in the first half was 9.41 percent higher than a year ago, but fell below the P2.181 trillion target for the period by 8.43 percent.

The Treasury said excluding interest payments from expenditures, the national government’s primary balance in June returned to a deficit of P119.9 billion from last year’s P29.3-billion primary surplus. The cumulative primary deficit in the first six months reached P507.5 billion, or 36.16 percent higher compared to last year.

Topics: Budget deficit , Bureau of the Treasury , income taxes
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