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10-month budget deficit swelled by 28% to P1.2t

The government’s budget deficit rose 4.77 percent in October to P64.3 billion from P61.4 billion a year ago after a 10.9-percent revenue growth and a 9.60-percent increase in government spending, the Bureau of the Treasury said Thursday.

The figure brought the 10-month budget deficit to P1.2 trillion, 27.94 percent or P262.8 billion higher than the P940.6-billion shortfall posted in the same period last year. It represented 65 percent of the P1.9 trillion 2021 revised program.

Total revenue grew 10.9 percent or P24.9 billion in October to P253.1 billion from P228.2 billion a year earlier, with tax collection making up 87 percent or P219.1 billion of the total while non-tax revenue contributed 13 percent or P34.0 billion.

Cumulative collection as of end-October reached P2.5 trillion, equivalent to 86 percent of the P2.9-trillion revised program for the year and 5 percent or P118.6-billion improvement from a year ago.

The Bureau of Internal Revenue’s net collection increased to P162.1 billion in October, 6.60 percent or P10 billion higher than last year’s achievement of P152.1 billion. The ten-month tax collection of P1.7 trillion reflected a 6.83 percent or P109.0 billion increase over similar collections in 2020 and comprised 82 percent of its revised full-year target of P2.1 trillion.

The Bureau of Customs grew its collection by 9.76 percent or P4.9 billion from P50.6 billion a year ago to P55.5 billion in October. This resulted in BOC’s cumulative uptake of P525.4 billion for the 10-month period, 17.10 percent or P76.7 billion better than the P448.6 billion attained in the same period in 2020 and represented 85 percent of the P616.7 billion adjusted program for the year.

Collection by the Bureau of the Treasury amounted to P9.0 billion in October, up by 30.01 percent or P2.1 billion year-on-year on higher dividend remittances and share of the national government from PAGCOR’s profit and investment income. The BTr’s aggregate collection of P114.5 billion from January to October declined by 45.07 percent or P94.0 billion due to the high base effect of last year’s remittances in compliance with Bayanihan I.

The government’s disbursement in October reached P317.4 billion, 9.60 percent or P27.8 billion above the P289.6 billion disbursed in the same month last year. The year-to-date expenditure of P3.7 trillion surpassed the previous year’s spending by 11.51 percent or P381.4 billion.

Ninety percent or P285.8 billion of the total disbursements in October was for primary expenditures, which posted a 6.86-percent or P18.3-billion growth for the month. This pushed the cumulative primary expenditures to P3.3 trillion, up by 11.61 percent or P345.6 billion year-on-year.

Interest payments in October rose 42.89 percent to P31.5 billion over last year mainly due to coupon payments for newly issued Treasury bonds. This led to year-to-date interest payments of P370.9 billion, exceeding the figures recorded a year ago by 10.70 percent or P35.8 billion.

Excluding interest payments, the national government’s primary deficit for October was at P32.8 billion – a 16.64 percent or P6.5 billion decline from last year’s primary balance of P39.3 billion. Despite this, the cumulative primary deficit from January to October increased to P832.5 billion, up by 37.48 percent or P227.0 billion from a year earlier.

The economy expanded by 7.1 percent in the third quarter, an improvement from the 11.6-percent contraction a year ago. “The Q3 deficit stands at 9.18 percent of GDP, up from last year’s 7.5 percent. Similarly, the deficit-to-GDP ratio for the first three quarters increased to 8.29 percent from 6.88 percent a year ago,” the Treasury said.

Revenue effort as of end-third quarter dropped to 16.29 percent from last year’s level of 16.77 percent. Tax effort managed to improve to 14.76 percent from 14.50 percent in the comparable period last year. Expenditure effort increased to 24.59 percent from the previous year’s 23.65 percent.

Topics: budget deficit , revenue growth , government spending , Bureau of the Treasury
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