Budget gap below ceiling

The Duterte administration’s budget deficit remained below ceiling in the first semester of the year despite the government’s above-target expenditures owing to strong revenue collections, the Bureau of the Treasury reported yesterday.

National Treasurer Rosalia V. de Leon said that the government’s robust revenue take in January to June will allow them to be less aggressive in terms of borrowings in the remaining months of the year ahead of the anticipated rise in interest rates.

“Sustained strong revenue collections provide comfortable cash buffer to moderate borrowings amidst rising rate environment,” De Leon said in a mobile phone message when sought for comment on the Treasury’s latest fiscal report.

At end-June, the government’s fiscal gap stood at 1193 billion, lower by 27 percent against the program of 1264.3 billion, but higher by 25 percent compared with 1154.5 billion in the same period last year.

The lower-than-expected deficit comes despite the government’s above target expenditures.

The treasury data showed that public spending reached 11.603 trillion in the first six-months, exceeding the government’s goal of 11.569 trillion by two percent. The latest figure was also higher year-on-year by 20 percent from 11.33 trillion.

Of the total expenditures, interest payments amounted to 1165.5 billion, lower by four percent against program that resulted in savings of 17.5 billion. This also represented for just 10.3 percent of total disbursements at end-June.

Revenues, on the other hand, breached the 11.304-trillion target for the period by eight percent to 11.41 trillion. Year-on-year, the government’s first semester income rose by 20 percent from 11.176 trillion.

The Bureau of Internal Revenue (BIR) contributed 1964.5 billion, which exceeded the 1938.7 billion target by three percent. The first semester collections were also higher by 14 percent compared with R848 billion in the same period in 2017.

“The bureau credits improved tax administration and the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) Law for the strong performance during the first half of the year,” the treasury said.

The Bureau of Customs, meanwhile, collected 1279.4 billion in January to June, indicating a 33 percent improvement yearon-year and topped the target of 1270.3 billion by three percent.

“Proper valuation and tariff classification of goods, as well as a strengthened campaign against illegal trade, contrib-

uted to the sustained good performance of the bureau,” the Treasury said.

Income of the treasury, on the other hand, doubled the 131.5-billion goal to 166.1 billion and higher by 25 percent compared with the same period last year.

“To date, BTr [Treasury] has already exceeded its full-year target by 110.4 billion on account of higher dividend collections,” the bureau said.

Treasury’s collection of guarantee fees and share from the Philippine Amusement and Gaming Corp.’s profit also improved in the first semester.

In June alone, the government’s fiscal deficit declined by 40 percent to 153.3 billion from 190.9 billion in the same month last year. Revenues amounted to 1224.2 billion, up 25 percent year-on-year, while expenditures rose three percent to 1278.5 billion.

For 2018, the Duterte administration’s economic team programmed its budget deficit at three percent of the country’s economy, as measured by its gross domestic product (GDP).