7-MO DEFICIT UP 6-FOLD TO P701B AMID COVID-19
THE national government’s budget deficit as of end-july surged to P700.6 billion, almost six times the budget gap in the same period last year as the government ramps up spending for Covid-19 pandemic response amid a drop in revenues.
The current budget shortfall has already breached the record annual deficit in 2019 of P660.2 billion and exceeded the P117.9billion
budget deficit as of end-july last year.
The deficit swelled as government expenditures outpaced state revenues for the seven-month period. Cumulative spending as of end-july this year jumped by 23.78 percent to P2.388 trillion from P1.93 trillion in the comparative period in 2019.
On the other hand, state revenues dipped by 6.84 percent to P1.688 trillion as of end-july from last year’s P1.812 trillion.
July shortfall 86% higher
FOR July alone, the government’s budget shortfall reached P140.2 billion, up by 86.21 percent from only P75.3 billion in the same month a year ago.
The Bureau of the Treasury said this resulted from the 10.40-percent growth in government expenditures due to the implementation of various Covid-19 rehabilitation and recovery measures amid an 11.22-percent drop in revenue collection.
Government spending for July grew to P374.7 billion from P339.4 billion in July 2019. The increase in disbursements for July was driven by the secondtranche releases for the Social Amelioration Program under the Bayanihan to Heal As One Act and other Covid-related expenses.
Meanwhile, revenues dropped to P234.5 billion in the same period from P264.1 billion last year.
Tax and nontax revenues for the month fell by 10.36 percent and 18.69 percent, respectively.
Still, the bulk of tax revenues came from the Bureau of Internal Revenue (BIR), which collected P159 billion, lower by 11.84 percent than its tax take in July 2019 of P180.3 billion.
For its part, the Bureau of Customs’ tax collection declined by 8.84 percent to P49.8 billion from P54.6 billion in the same month a year ago.
Primary expenditure for July, net of interest payments, went up by 9.32 percent year-on-year to P315.3 billion, from P288.4 billion in July 2019.
Interest payments for July grew by 16.52 percent to P59.4 billion from P51 billion last year due to the interest paid in advance for global bonds for which the original schedule of payment fell on a weekend, August 1.
The government’s economic team projects the country’s fullyear 2020 budget deficit to more than double to P1.815 trillion or 9.6 percent of GDP from last year’s P660.2 billion or P3.4 percent of GDP.
The Treasury said the deficitto-gdp ratio for the first half of the year already stood at 6.52 percent compared to 0.46 percent last year, given the combined fiscal and economic impact of the Covid-19 pandemic.
Revenue effort for the same period also inched up to 16.90 percent from P16.68 percent last year, although tax effort declined to 14.14 percent against P14.88 percent in 2019.
Expenditure effort also significantly improved to 23.42 percent, higher than 17.14 percent in the first semester last year.