The national government underspent in the first half of the year with expenditures falling below program by 9.5 percent based on data released by the Bureau of the Treasury (BTr).
In a separate statement yesterday, the Department of Budget and Management (DBM) reported it has released P679.27 billion for the government’s coronavirus disease 2019 (COVID-19) response as of June 30, while P5.97 billion expired under Bayanihan 2.
According to the latest cash operations report, the government posted a budget deficit of P716.1 billion in January to June, up by 27.78 percent from last year’s level, but 29.66 percent behind the first-half 2021 program of P1.02 trillion.
The BTr also reported that the national government’s fiscal balance swung back to a P149.9 billion budget deficit for June 2021 compared to last year’s P1.8 billion surplus, due to the 30.03 percent decline in revenue collection as the deadline for the payment and filing of income tax returns was kept at the original date of April 15 this year.
Last year, the deadline was extended to June in light of the implementation of strict quarantine restrictions.
Government expenditures amounted to P2.21 trillion, 9.57 percent up year-on-year, but fell below the P2.44 trillion program by 9.56 percent or P233.4 billion.
The BTr said this is mainly due to the timing of subsidy releases awaiting requests from the concerned government-owned and -controlled corporations, the pending enactment of the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery 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.
In a document posted on its website, the DBM also identified the items which resulted in the underspending.
Specifically, subsidies fell below program by 50.5 percent; maintenance spending, 14.5 percent; interest payments, 19.1 percent; personnel services expenditure, four percent; equity, 17.9 percent; and net lending, 44.6 percent.
“Notably, infrastructure and other capital outlays slightly exceeded the P419.6 billion program by P7 billion or 1.7 percent with the settlement of accounts payables and faster implementation of infrastructure activities of the Department of Public Works and Highways (DPWH) amid the looser community quarantine restrictions,” the DBM said.
“However, the overall infrastructure disbursements for the period were lower by P32.1 billion or 5.6 percent of the program, largely due to the pending requests of subsidies from the Bases Conversion and Development Authority, National Electrification Administration, National Housing Authority and National Irrigation Administration,” it added.
Infrastructure and other capital outlays in the first semester posted a growth year-on-year of 43.2 percent to reach P426.6 billion. The increase accounts for two-thirds of the total P192.7 billion expansion of disbursements for the first six months of the year, the DBM said.
The government’s total operating expenses for the first half of the year, which is expenditures net of interest payments, amounted to P2 trillion, 9.41 percent up from a year ago, but 8.43 percent below program.
In June, expenditures stood at P395.4 billion, reflecting an annual growth of 13.24 percent, which the BTr attributed largely to the disbursements for DPWH’s infrastructure program and capital outlay projects under the Armed Forces of the Philippines Modernization Program, Emergency Repatriation Program, Smart Campuses Program and expenditures for the preparatory activities of the Commission on Elections for the 2022 National Elections.
The government’s year-to-date collection of P1.49 trillion topped the end-June 2020 outturn of P1.45 trillion by 2.55 percent, the BTr said, on account of higher tax collections, and also outperformed the revised forecast of P1.42 trillion by 4.82 percent.
In June alone, total collections slid to P245.6 billion, 30.03 percent less than last year’s tally of P351 billion.
The Bureau of Internal Revenue (BIR) collected P159.4 billion, exhibiting a significant 43.62 percent drop in revenue due to the high base effect of extending income tax payment to June last year in light of the implementation of strict quarantine measures.
Despite this, the BTr said the BIR’s cumulative collection for the six-month period still managed to grow by 7.88 percent to P1.03 trillion from the 2020 comparable outturn, and surpassed the revised goal of P1.02 trillion by 1.39 percent.
The Bureau of Customs’ (BOC) collection for the month reached P52.2 billion, exceeding last year’s achievement by 22.48 percent, marking the fourth straight month of double-digit growth boosted by improving importation volume and agency collection efforts, the BTr said.
Consequently, BOC’s cumulative balance as of end-June expanded to P301.7 billion, 19.22 percent higher from a year ago and 3.4 percent better than the adjusted program of P291.8 billion.
Meanwhile, the DBM reported it has released P679.27 billion as of June 30 to various implementing agencies to support projects, activities and programs intended to respond to the COVID-19 pandemic.
Of this, P600.66 billion has been obligated and about P550.53 billion has been disbursed.
This is equivalent to an 88.4 percent obligation rate and 91.7 percent disbursement rate, respectively, the DBM said.
Allotment releases to support Bayanihan to Recover as One Act (Bayanihan 2) amount to P214.12 billion, wherein P200.25 billion was obligated and P189.86 billion was disbursed.
The DBM said this leaves a balance of P13.88 billion, of which P5.97 billion, or less than one percent of the total allotment releases, was reverted to the general fund in view of the expiration of the special appropriations and 2019 continuing appropriations under the same law last June 30, 2021.
Further, out of the P387.93 billion allotment released pursuant to the Bayanihan to Heal as One Act (Bayanihan 1), P369.08 billion has been obligated and P357.85 billion has been disbursed.
Other releases outside the Bayanihan laws have also reached P77.22 billion wherein agencies have obligated P31.34 billion and disbursed P13.82 billion, respectively.
“Allotments released from the 2021 General Appropriations Act (GAA) cover, among others, funds for the ongoing procurement of COVID-19 vaccines. Unobligated funds from the 2020 and 2021 GAA are still valid for obligation until Dec.31, 2021,” the DBM said.
