National gov’t budget deficit widens by 1,510.61% to P40.1B in August

The Philippine government’s fiscal balance saw a wider shortfall in August as state revenues remained tepid due to the impact of COVID-19 pandemic’s economic fallout.

Data released by the Bureau of the Treasury showed the national government posted a budget gap of P40.1 billion last month, up 1,510.61% from P2.5 billion in the same period last year.

August’s budget deficit, however, is slimmer than the P140.2-billion shortfall recorded in July.

“The fiscal outturn resulted from the 13.05% 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 noted.

For January to August, the fiscal gap widened to P740.7 billion, up 515.03% from P120.4 billion year-on-year.

Revenues

Total revenues in August amounted to P243.2 billion, down 13.05% from P279.7 billion in the same period in 2019.

Year-to-date revenues totaled P1.931 trillion, down 7.67% from P2.091 trillion last year.

The Treasury reported that the lion’s share or 96% of state collections in August were from tax revenues at P233.1 billion, which declined by 10.94% from P261.8 billion year-on-year. January to August tax revenues dropped 11.59% to P1.661 trillion from P1.879 trillion in 2019.

Of the total tax revenues last month, collection from the Bureau of Internal Revenue (BIR) contributed the highest share at P187.9 billion, but saw a 8.59% decline from last year.

Year-to-date, BIR collection of P1.303 trillion declined 10.26% from P1.452 trillion in the same period in 2019.

The eight-month BIR collection already comprised 77% of the revised fiscal year 2020 target of P1.685 trillion, but only 58% when compared to the original program, according to the BTR.

“BIR needs a monthly average collection of P96.0 billion for the rest of the year to reach its revised full-year program,” it said.

Meanwhile, the Bureau of Customs (BOC) raised P44.4 billion in August, down by 17.19% year-on-year “due to lower import volumes caused by the ongoing pandemic.”

The BOC’s cumulative revenue for 2020 has also dropped by 15.55% to P347.3 billion, and is only 51% of the original program.

“For the year, BOC has still to collect P158.9 billion, or P40.0 billion on average per month, to achieve its revised P506.2 billion program,” the Treasury said.

On the other hand, non-tax revenues in August stood at P10.1 billion, down 43.84% from P18 billion in the same month last year.

Year-to-date, non-tax revenues amounted to P269.3 billion, up 21.1% from P211.8 billion.

Of the non-tax collections in August, the Treasury collected P2.1 billion, down 65.3% from P5.9 billion.

“The decline was mainly due to an 81% year-on-year drop in remittance from PAGCOR (Philippine Amusement and Gaming Corp.) adding to lower income from government investment and deposits,” the BTr said.

“Despite the contraction, year-to-date BTr income still managed to grow to P192.9 billion, notching a significant year-on-year increase of 78.80% or P85.0 billion,” it said.

Meanwhile, other non-tax including privatization proceeds and fees and charges generated P8.0 billion for the month, down 33.32% from the previous year, “still due to limitations in government transactions following the imposition of stringent health protocols.”

Similarly, the aggregate total collection of P76.3 billion as of end-August lagged behind last year’s P103.9 billion by 26.58%.

Expenditures

The government’s expenditures in August inched up by 0.38% to P283.3 billion from P282.2 billion year-on-year.

“The uptick is mainly due to the timing of subsidy releases to the PHIC (PhilHealth) 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.

“For this year, releases to PHIC between May to July already reached P30.3 billion,” it said.

The Treasury also attributed the increased expenditure in August to higher health and social services spending of the Department of Health and Department of Social Welfare and Development, respectively.

For January to August, the national government’s disbursements amounted to P2.671 trillion, up 20.79% from last year’s spending of P2.211 trillion in the same period last year.

Primary spending, net of interest payments, stood at P260.8 billion, down from P262.6 billion last year.

Cumulative primary spending amounted to P2.402 trillion, up 22.48% in the January to August 2019.

Total interest payments of P22.5 billion for August grew 14.98% higher than last year mainly due to the coupon payment for the three-year retail treasury bonds issued in February 2020 and other issuances this year.

This brought the year-to-date interest payment to P269.6 billion, up 7.57% from P250.6 billion.

Interest payments accounted for 10.09% of the total expenditures for the January-August period, lower than the 11.33% outturn in 2019, according to the BTr.

Meanwhile, interest payments as a percentage of total revenue increased to 13.96% from 11.98% last year due to lower collections.—AOL, GMA News