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Budget deficit reached P741b in eight months

The government incurred a budget deficit of P40.1 billion in August, wider than the P2.5-billion shortfall a year ago, as revenue collection fell by more than 13 percent amid the health crisis, the Bureau of the Treasury said Wednesday.

“The fiscal outturn resulted from the 13.05-percent year-over-year decrease in government receipts due to the continued impact of the pandemic outbreak with minimal growth in government expenditures for the period,” the Treasury said.

The figure brought the deficit in the first eight months to P740.7 billion, up 515 percent from the P120.4-billion shortfall in the same period last year.

Total revenues in August reached P243.2 billion, down by P36.5 billion from a year ago. Tax revenues made up for 96 percent or P233.1 billion of the total collections while the remaining 4 percent or P10.1 billion was raised through non-tax sources.

Eight-month collections reached P1.931 trillion, down by 7.67 percent or P160.4 billion from the same period last year.

The Bureau of Internal Revenue’s collections went down by 8.59 percent in August to P187.9 billion and by 10.26 percent in the eight-month period to P1.303 trillion.

“This already comprised 77 percent of the revised FY 2020 target of P1.685 trillion, but only 58 percent when compared to the original program. BIR needs a monthly average collection of P96 billion for the rest of the year to reach its revised full-year program,” the Treasury said.

The Bureau of Customs raised P44.4 billion in August, down by 17.19 percent from the previous year on lower import volumes caused by the pandemic. Cumulative revenues also dropped 15.55 percent or P64 billion to P347.3 billion and represented only 51 percent of the original program.

“For the year, BOC has still to collect P158.9 billion, or P40 billion on average per month, to achieve its revised P506.2 billion program,” the Treasury said.

Income collected by the Bureau of the Treasury reached P2.1 billion in August, 65.30 percent lower than P5.9 billion in 2019. The decline was mainly due to an 81-percent drop in remittance from Philippine Amusement and Gaming Corp. and lower income from government investment and deposits.

Despite the August contraction, the Treasury’s cumulative income surged 78 percent in the first eight months to P192.9 billion. The Treasury also exceeded its original full-year target of P82.3 billion by P110.7 billion behind higher dividend collection and other government service income and almost 90 percent of the revised program of P213.3 billion.

Meanwhile, government expenditures rose 0.38 percent in August to P283.3 billion. “The uptick is mainly due to the timing of subsidy releases to the PHIC [Philippine Health Insurance Corp.] for the health insurance premiums of indigent beneficiaries enrolled under the National Health Insurance Program, where some P27.7 billion was released in August last year,” the Treasury said.

Releases to PHIC between May and July reached P30.3 billion. Net of the said expenditure, disbursements in August grew by 11.3 percent year-on-year, largely on account of higher health and social services spending of the Department of Health and Department of Social Welfare and Development, respectively.

Disbursements in the first eight months rose 20.8 percent to P2.671 trillion from P2.211 trillion in the same period last year.

Topics: budget deficit , Bureau of the Treasury , BoT , revenue collection
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