Deficit swells to ₧879.2B in Jan-sept as Covid cuts revenue, ups spending

THE budget deficit of the national government from January to September swelled to P879.2 billion, almost three times the shortfall a year ago, data from the Bureau of the Treasury showed.

Government expenditures exceeding its revenues resulted in a wider budget gap for the ninemonth period this year compared to only P299 billion as of end-September 2019.

However, the Bureau of the Treasury said the January to September budget deficit is still 32.3 percent below the revised program of P1.298 trillion for the period.

For September alone, the national government narrowed its budget deficit to P138.5 billion, 22.42 percent lower than the fiscal gap of P178.6 billion in the same month last year.

Year- to- date revenues fell by 7.92 percent to P2.143 trillion compared to P2.328 trillion in the comparable period in 2019, although this is still 8.8 percent above the P1.97- trillion revised target. To date, 85 percent of the P2.52- trillion full- year program has been collected.

On the other hand, cumulative government expenditures for January to September surged by 15.07 percent to P3.023 trillion from P2.627 trillion due to Covid-19 related expenses but was still 7.53 percent lower than the revised program of P3.269 trillion. The lag is mainly attributed to measures under Republic Act 11494 or the Bayanihan to Recover as One Act which are still to be implemented following the signing of the law on September 11.

For September, government revenues slid by 10.19 percent to P212.4 billion from P236.5 billion in the same period in 2019.

Meanwhile, government expenditures for September declined by 15.45 percent to P350.9 billion from P415.1 billion in the same month in 2019 due to the timing of subsidy releases and the base effect of higher infrastructure spending last year.

As tax collections are down amid the pandemic, the Development Budget Coordination Committee ( DBCC) projects the country’s budget deficit to more than double to 9.6 percent of GDP or P1.815 trillion this year, from only 3.4 percent of GDP or P660.2 billion last year.

The DBCC also expects the economy to contract by 5.5 percent this year, potentially marking the country’s worst economic downturn in 35 years.

But Finance Secretary Carlos G. Dominguez III said earlier this week that DBCC’S possible revision of the GDP outlook to reflect the impact of the lockdown in August is “under discussion.”