The national government posted a wider fiscal deficit in March as expenditures grew versus the previous year while revenues posted a double-digit decline, data released by the Bureau of the Treasury (BTr) showed.
According to the latest cash operations report, the government posted a P191.4 billion deficit for March, rising from P71.6 billion last year.
Government expenditure grew by 22.33 percent year-over-year while revenue generation dropped by 17.37 percent.
The resulting budget deficit for the first quarter surged to P321.5 billion from the P86.2 billion deficit incurred in the first three months of 2020.
The national government’s disbursements for March climbed to P407.6 billion, surpassing the previous year’s level by 22.33 percent or P74.4 billion, buoyed mainly by the disbursements for the infrastructure projects of the Department of Public Works and Highways, as well as for the various social welfare programs of the Department of Social Welfare and Development, Department of Labor and Employment, and the Overseas Workers Welfare Administration, the BTr reported.
“The continuing implementation of the Bayanihan II for initiatives such as the Rice Resiliency Program of the Department of Agriculture and health programs of the Department of Health also contributed significantly to the strong spending performance in March,” the BTr said.
The agency said this pushed the total expenditure as of end-March to P1.02 trillion, outstripping last year’s first quarter disbursements of P849.2 billion by 19.86 percent.
Meanwhile. total revenue for the month of March narrowed to P216.2 billion, 17.37 percent below last year’s performance of P261.6 billion.
The BTr said this was due to the high base effect of dividend remittances in 2020.
The P696.5 billion year-to-date collection for the first quarter likewise slipped by 8.73 percent compared to P763.1 billion in the equivalent period last year, the BTr said.
The Bureau of Internal Revenue’s uptake for the month inched up by 1.28 percent to P133.4 billion. The bureau’s cumulative collection of P469.7 billion as of end-March was also slightly above last year’s outturn of P468.8 billion.
The Bureau of Customs (BOC) collected P54.7 billion in March, growing by 22.57 percent, which the BTr attributed to improved valuation and intensified collection efforts.
This increased BOC’s aggregate revenue for the January to March period to P149.2 billion, up by 2.66 percent over the previous year’s take.
The BTr’s income amounting to P16.1 billion for March significantly declined from the P77 billion earned for the same month a year ago.
“The drop was attributed to dividend remittances which declined by P51 billion relative to last year’s influx due to the Bayanihan to Heal as One Act,” the BTr said.
“Other factors included the lower collection of interest on advances from government-owned and -controlled corporations and national government share from the Philippine Amusement and Gaming Corp. income,” it added.
The agency said these same factors reduced BTr’s cumulative collection to P39.3 billion, 64.63 percent slower than the end-March 2020 income.
Collections from other offices, which include privatization proceeds and fees and charges, amounted to P10 billion in March, reflecting a 39.6 percent increase over 2020’s comparable outturn owing to a low base effect from the imposition of stricter lockdown measures for the same month last year, the BTr said.
The resulting year-to-date collection of P31.1 billion was roughly at pace with the previous year’s first quarter total.
Finance Secretary Carlos Dominguez said in an interview with CNBC yesterday the deficit level will likely return to normal by next year.
“We will maintain a high fiscal deficit this year again, and that is essentially because of the contagion and because of the expenditures we have to do, we have to make in order to overcome the contagion,” Dominguez said.
“We are very careful in managing this and we’re pretty sure that by 2022, we will begin to return to the normal fiscal deficit we have, of about 3.5 to 4 percent (of gross domestic product),” he added.
