Fiscal position swings to ₱149.9B deficit in June

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Metro Manila (CNN Philippines, July 27) — The Philippines’ budget gap reversed to a deficit in June with the plunge in revenue collections for the period, the Treasury Bureau reported Tuesday.

Recent data from the agency reveal a fiscal deficit of ₱149.9 billion for the month, swinging from a ₱1.8 billion surplus in June 2020.

The Treasury said this is because of the “30.03% decline in revenue collection as the payment of income taxes was maintained on its original schedule.”

The latest figure brought the budget deficit for the first half of 2021 to ₱716.1 billion, a 27.78% climb from last year’s level. However, the bureau noted this is 29.66% short of the government’s ₱1.01 trillion program for the said period.

Revenues dwindled to ₱245.6 billion in June, a ₱105.4 billion difference from last year’s figure. Total government revenues reached ₱1.49 trillion between January to June, growing by 2.55%.

The Bureau of Internal Revenue raked in ₱159.4 billion, plunging by 43.62% due to a high base effect, as income tax payments were extended to June last year due to strict lockdowns then.

The Bureau of Customs, however, collected more during the period — it earned ₱52.2 billion, 22.48% higher than June 2020’s level.

The Treasury’s income likewise rose to ₱20.8 billion, with higher dividend remittances and the national government’s share from PAGCOR’s profit driving the 84.19% spike.

Collections from other offices only hit ₱11.3 billion in June, down 14.04% from last year.

Meanwhile, state expenditures reached ₱395.4 billion in June — a 13.24% jump. The bureau attributed this to disbursements for the Department of Public Works and Highways’ infrastructure program, the Armed Forces of the Philippines modernization capital outlay projects, and the government’s emergency repatriation program.

Also contributing to the growth in spending were releases for the Commission on Higher Education’s Smart Campuses Program, and expenditures for the Commission on Election’s preparations for the 2022 national polls.

Interest payments leaped to ₱29.9 billion during the month, rising by 8.58% as government settled coupons for Retail Treasury Bonds issued last March.

In sum, the government spent ₱2.2 trillion during the first six months of 2021. This is 9.57% larger than the figure registered during the same period last year, but missed government’s ₱2.43 trillion target.

“This is mainly due to the timing of subsidy releases awaiting requests from the concerned GOCCs, the pending enactment of the GUIDE bill, outstanding checks as of end-June which are yet to be encashed by contractors or suppliers of line agencies, as well as interest savings,” said the Treasury.