Gov’t underspending persists as of end-July
But tax, customs revenue collections beating targets
The national government posted an end-July budget deficit of P761 billion, narrower by almost a tenth than a year ago as well as over a fourth smaller than the seven-month program as revenue collections overperformed while agencies’ underspending lingered.
Citing the latest Bureau of the Treasury (BTr) data, Finance Secretary Benjamin Diokno told the House committee on appropriations on Friday that the fiscal deficit during the first seven months was 9.1-percent narrower than the P837.3 billion recorded a year ago. The gap was also 26.6-percent smaller than the P1.04-trillion deficit program for the January-to-July period.
While end-July expenditures rose 8.3 percent yearon-year to P2.79 trillion, actual spending on public goods and services were 5.5-percent below the P2.96-trillion program. In particular, productive spending net of interest payments grew 7.4 percent yearon-year to P2.49 trillion, even as the amount was 5.8-percent lower than the P2.64 trillion that should have been spent during the first seven months.
Higher interest payments
Interest payments also increased 15.6 percent year-onyear to P309.3 billion as of July, although actual expenditures were 2.6-percent smaller than the P317.7 billion set aside to pay interest slapped on borrowings. In the month of July alone, the BTr said in a statement that interest payments dropped 11.8 percent to P52.1 billion from P59 billion a year ago “due in part to the level effect of the timing of coupon payments for global bonds recorded in July last year as it originally fell on a weekend (Aug. 1, 2021).” As such, the BTr said the government saved P10.1 billion in interest payments to date.
Delays due to polls
Last month, Diokno blamed the lag in spending to the ban on public disbursements ahead of the concluded May 9 elections, and said they would urge agencies to catch-up on their programmed expenditures during the second half.
Diokno told legislators tackling the proposed P5.268-trillion 2023 national budget that historically, actual spending fell behind the national government’s spending plans. “That’s the reason why our actual deficit is much smaller than the forecast,” Diokno said.
Meanwhile, end-July tax and nontax revenues rose 16.6 percent year-on-year to P2.04 trillion, also exceeding the P1.92-trillion collection target by 5.9 percent.
Diokno said revenue collections thus far were “overperforming.” The Bureau of Internal Revenue (BIR), for instance, grew its tax take by 10.6 percent year-on-year to P1.33 trillion, although 2.7-percent below the P1.37-trillion seven-month goal. The Bureau of Customs (BOC) not only hiked its collection of import duties and other taxes by 33.8 percent year-on-year to P480.3 billion as of end-July, but also surpassed its P421.4-billion target by 14 percent. The BOC’s July collection of P83.6 billion was its highest-ever monthly take on the back of “improved valuation, digitized and modernized systems, and the gradual reopening of the economy, which resulted in higher import volume,” the BTr said.
President Marcos’ economic team had tasked the BIR to collect P2.39 trillion in taxes this year, while the BOC’s collections must reach P721.5 billion by yearend.