National government’s budget deficit hits P1.33 trillion at end-November

The national government’s fiscal performance saw a wider deficit as of end-November 2021 as state expenditures surpassed revenue collections during the period, data released by the Bureau of the Treasury (BTr) showed Friday.

Treasury data showed the government posted a budget gap of P1.33 trillion, 24.63% wider than the P1.07-trillion fiscal shortfall posted in the 11-month period of 2020.

The year-to-date budget deficit accounted for 72% of the government’s ceiling of P1.9 trillion for 2021.

In November alone, the shortfall amounted to P128.7 billion, higher by 0.33% than the P128.3-billion gap in the same month last year.

In an emailed commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort the wider January to November 2021 budget deficit was “amid higher long-term interest rates that increased the country's interest payments on debts; recent lockdowns earlier this year that reduced tax revenue collections but offset by higher import tariff collections as imports back to pre-COVID levels and near record highs partly on higher prices of oil and other imported commodities/products.”

Expenditures

The national government’s expenditures during the January to November period rose to P4.1 trillion, up 11.4% from P3.7 trillion in the same period last year.

This, as primary spending, excluding interest payments, comprised the lion’s share of the government’s expenditures during the period, at P3.7 trillion, higher than the P3.3 trillion seen in 2020.

Interest payments, meanwhile, stood at P402.1 billion, up 13.24% year-on-year from P355.1 billion.

Revenues

The state’s revenue collection as of November 30, 2021 totaled P2.8 trillion, equivalent to 96% of the government’s P2.9-trillion target for the full year.

The January to November collections improved by 5.99% from P2.6 trillion in the same period last year.

Tax collections by the Bureau of Internal Revenue comprised the biggest share in the state total collections during the period at P1.9 trillion, 7.17% higher than the P1.8 trillion raised in the January to November 2020 period and was at 92% of the government’s P2.1-trillion tax collection target for the entire year.

Collections by the Bureau of Customs, on the other hand, amounted to P583.3 billion, up 18.47% year-on-year and was at 95% of the P616.7 billion target.

Collections by the BTr stood at P120.6 billion, lower by 42.93% from P211.3 billion in the same period last year.

Revenues from other offices, including privatization proceeds and fees and charges, total P7.6 billion, up 19.28% from last year.

“Going forward, the timely approval of the 2022 national budget would help boost government spending especially on infrastructure spending for 2022, which is an election year, as an important pillar of the economic recovery program to pump-prime/stimulate the economy, alongside with additional measures to further re-open the economy in view of the accelerated arrival and rollout of COVID-19 vaccines in the coming weeks/months,” Ricafort said.

“The passage of the CREATE Law that could become the country's biggest stimulus measure for the coming years as well other reform measures such as the FIST Law, GUIDE Bill, and further monetary easing measures to help spur greater demand for loans that lead to more investments, employment and other business/economic activities,” he said. — VBL, GMA News