Spending surge boosts budget gap

THE GOVERNMENT’s fiscal deficit grew in July and in the first seven months, as spending increased faster than revenues, the Bureau of the Treasury (BTr) said on Wednesday.

The government posted an P86.4-billion fiscal deficit last month, 71% more than the P50.5 billion recorded in July last year.

Overall revenues grew 24% year-on-year to P241.7 billion from P194.6 billion.

Of this amount, tax revenues accounted for P217.8 billion, a 25% increase from last year’s P174.7 billion.

The Bureau of Internal Revenue (BIR) collected P164 billion last month, 19% more than P138.1 billion a year ago, while the Bureau of Customs (BoC) raked in P52.1 billion, 49% more than the year-ago P35 billion.

In its statement, the Treasury attributed the collection boost to “strong enforcement and revenue enhancement measures, coupled with the weaker peso and higher oil price.”

Other offices’ tax take totaled some P1.7 billion, six percent more than the P1.6 billion collected the past year.

Non-tax revenues accounted for nearly a tenth of overall revenues at P23.9 billion, which grew 20% from P20 billion in July 2017.

The BTr’s collections amounted to P11.8 billion, up 39% from P8.5 billion while other offices’ revenues were P12.2 billion, up six percent from P11.5 billion. The Treasury said this was due to “higher remittance of dividends on shares of stocks held by the government and NG (national government) share in PAGCOR

(Philippine Amusement and Gaming Corp.) income and MIAA (Manila International Airport Authority) profits.”

STATE SPENDING SURGES Government spending jumped 34% to P328.1 billion in July — “the highest nominal (monthly) spending for the year” — from P245.1 billion a year ago.

Of that amount, interest payments (IP) accounted for P44.8 billion — 13.7% of total spending in July — steady from P44.6 billion the past year. “The lower domestic IP on account of debt that matured last year was offset by the increase in foreign payments from new bonds issued in Feb 2018 and in part due to the depreciation of the peso,” the Treasury explained.

Other disbursements — which include infrastructure and other capital outlays — surged 41% to P283.3 billion in July from P200.5 billion a year ago.

YEAR-TO-DATE

For the January-July period, the government posted a P279.4-billion deficit, 36% bigger than the P205 billion recorded in 2017’s first seven months.

Revenues grew 21% to P1.652 trillion as of July from P1.372 trillion in 2017’s comparative seven months.

Tax collections contributed P1.473 trillion to the total, 18% more than the year-ago P1.244 trillion.

The BIR collected P1.129 trillion, 14% more than the year-ago P986.1 billion, while the BoC raked in P331.5 billion, reflecting a 35% surge from P245.3 billion in the same comparative sevenmonth period.

Other offices collected some P12.5 billion in tax revenues, edging up two percent from P12.2 billion.

Non-tax revenues surged 41% to P179.8 billion in the first seven months of the year from P127.4 billion in 2017’s comparable period.

The Treasury contributed P77.9 billion of that amount, 27% more than P61.2 billion the past year, while other offices raked in P101.9 billion, 54% up from P66.2 billion a year ago.

State spending in the same comparative seven-month periods grew 23% to P1.932 trillion from P1.576 trillion.

Interest payments accounted for about a tenth of the overall expenditures at P210.4 billion as of July, seven percent more than the year-ago P196.2 billion.

Other disbursements contributed P1.721 trillion, jumping 25% from P1.38 trillion last year.

Sought for comment, UnionBank of the Philippines Chief Economist Ruben Carlo O. Asuncion noted in an e-mail: “In general, these are all so far at comfortable levels, as the government continues to spend and tax to help the economy grow better and higher in the longer-run. Continued higher collections will bode well in the short- to medium-terms.’

“Both BIR and BoC should continue to deliver and push smashing collection goals. This direction of higher collection for the revenue collecting government agencies should be sustained at all cost, and a strong revenue collection growth should always be positive for the growing economy.”