NG incurs R202.1-billion deficit in May

Amid COVID-19 expenditures

The Philippines’ budget deficit soared last month as tax revenues fall while the government continues to spend on its coronavirus response, data from the Bureau of the Treasury showed yesterday.

The fiscal deficit, which occurs when government expenses exceed revenue, reached ₱202.1 billion last May, a reversal of the ₱2.6 billion budget surplus registered in the same month in 2019.

According to the Treasury, the huge spike in budget deficit, equivalent to 7,983 percent, was expected “as government disbursements continued to gain traction vis-à-vis diminished revenue collection caused by the ongoing COVID-19 outbreak.”

In May, expenditures increased by 12 percent to ₱353.6 billion from ₱314.7 billion in the same month last year.

“The acceleration was propelled by the releases for the second tranche of the Small Business Wage Subsidy (SBWS) under the SSS [Social Security System] in line with the implementation of Republic Act. No. 11469,” the Treasury said, referring to the “Bayanihan to Heal as One” law.

The national government allocated at least ₱25.5 billion budget for the payout of SBWS’ second tranche, which will be distributed in the form of cash grants to an estimated 3.05 million employees of small enterprises affected by the quarantine measures.

Meanwhile, primary spending, which excludes the government’s interest payment, jumped 13 percent last month to ₱335.3 billion from ₱295 billion a year ago, the Treasury document showed.

On the other hand, interest payments for the month reached ₱18.4 billion, down by seven percent from ₱19.7 billion in the previous year due to lower maturing debt obligations in the domestic market.

Revenue, meanwhile, decelerated by 52 percent in May, forcing the national government to rely heavily on borrowings to support its spending requirements for the month.