The national government’s budget deficit narrowed in July as expenditures posted a modest growth versus the previous year, data released by the Bureau of the Treasury (BTr) showed.
According to the latest cash operations report released yesterday, the national government recorded a budget deficit of P121.2 billion for July, down by 13.57 percent from the shortfall of P140.2 billion in the same period a year ago.
The BTr said the fiscal performance for the period resulted from the 9.21 percent growth in revenue collection alongside a 0.69 percent modest increase in government expenditures.
Thus, the cumulative budget deficit for the first seven months of the year amounted to P837.3 billion, 19.5 percent higher than the January to July 2020 comparable figure of P700.6 billion.
The BTr reported that disbursements for July amounted to P377.3 billion, P2.6 billion higher than last year’s P374.7 billion.
“The modest increase can be attributed to the higher personnel services expenditures and infrastructure outlays, but were partially offset by the one-off Social Amelioration Program of the Department of Social Welfare and Development whose implementation of the second tranche was still ongoing in July last year,” the BTr said.
“The timing of subsidy releases to the Philippine Health Insurance Corp. and National Housing Authority also weighed down on the growth of disbursements for the period,” it added.
The cumulative expenditure in the seven-month period amounted to P2.58 trillion, surpassing the P2.39 trillion disbursements in the same period of 2020 by 8.18 percent.
Primary expenditures, or spending net of interest payments, for July inched up to P318.2 billion from the previous year’s P315.3 billion.
Total primary spending as of end-July reached P2.32 trillion, showing an 8.16 percent growth from the same period of last year’s P2.14 trillion.
Meanwhile, revenue collection for the month reached P256.1 billion, exceeding last year’s outturn of P234.5 billion by P21.6 billion.
The resulting cumulative collection of P1.75 trillion for January to July likewise increased by 3.47 percent against the P1.69 trillion registered in the equivalent period a year ago.
The BTr said the Bureau of Internal Revenue (BIR) recorded a 7.45 percent increase in its July performance having raised P170.8 billion versus P159 billion a year ago.
Cumulatively, BIR’s uptake seven months into the year amounting to P1.2 trillion improved by 7.82 percent compared to the previous year’s tally of P1.12 trillion.
The Bureau of Customs’ (BOC) collections for July reached P57.2 billion, representing a 14.76 percent improvement from the P49.8 billion generated a year ago.
This raised BOC’s total revenue to P358.9 billion for the seven-month period, 18.49 percent higher than last year’s outcome of P302.9 billion.
BTr’s income for July climbed to P13.6 billion, 78.03 percent better compared to last year’s level of P7.6 billion.
It attributed the significant increase for the period largely to higher dividend remittances, national government’s share from the Philippine Amusement and Gaming Corp. and interest income from government deposits.
The BTr said its total revenue as of end-July of P95.2 billion has surpassed the original full-year program of P74.7 billion by 27.52 percent driven by higher dividend collections as well as income from bond sinking fund investment and government deposits.
However, the 2021 year-to-date income is 50.1 percent lower from the comparable P190.9 billion raised in 2020 due to the base effect of higher income and dividend remittances last year in line with the provisions of Republic Act 11469 or Bayanihan I, the BTr said.
As for revenue from other offices, which include other non-tax including privatization proceeds and fees and charges, this amounted to P12.7 billion, down by 22.96 percent from P16.4 billion a year ago, which the BTr said was partly due to the high base effect of the one-off remittance from MPCALA Holdings Inc. for the Cavite-Laguna Expressway project.
Year-to-date collections for the January to July still grew by 13.2 percent to P77.9 billion from P68.8 billion a year ago.
The BTr also reported that the deficit-to-gross domestic product ratio for the first semester rose to 7.86 percent from last year’s level of 6.53 percent as expenditure growth outpaced revenue collection over the period.
“This is reflected in the higher expenditure effort of 24.21 percent compared to 23.47 percent for the same period in 2020 while revenue effort moderated to 16.35 percent from 16.94 percent due to the high base effect of dividend remittances last year,” the BTr said.
Nevertheless, the tax effort increased to 14.74 percent from 14.19 percent a year ago, it added. — Angela Celis
