Budget swings to P2.6-B deficit in August

MANILA, Philippines — The national government continued to incur a budget deficit in August as the growth in expenditures once again outpaced the increase in revenues, according to the Bureau of the Treasury.

According to the latest cash operations report of the BTr, the government’s fiscal position in August swung to a deficit of P2.6 billion, a reversal of the P28.8 billion surplus recorded in the same period last year.

The latest budget shortfall however, was sharply lower compared to the P86.4 billion deficit recorded in July.

The August figure also brought the year-to-date deficit to P282 billion, 60 percent wider than the P176.2 billion registered in the same period last year. The BTr said this accounts for 54 percent of the government’s deficit ceiling of P523.7 billion for the whole of 2018.

A fiscal or budget deficit occurs when the government’s expenditures exceed revenues over a given period.

Based on BTr data, government revenues grew by 11 percent to P256.9 billion in August compared to the P230.4 billion in the same period recorded last year.

The Bureau of Internal Revenue, the largest revenue-generating agency of the government, reported a total collection of P185.1 billion, eight percent up from last year’s level of P171.7 billion.

The bureau of Customs likewise improved its collections by 36 percent to P52 billion from P38.3 billion last year.

“The Bureau attributes its consistent double digit growth for the year to the higher exchange rate, increased oil prices, proper valuation, strong enforcement and revenue-enhancing measures,” the Treasury said.

On the other hand, the BTr said non-tax collections from other offices declined by six percent to P17.1 billion in August.

Year-to-date, revenues of the national government rose by 19 percent to P1.909 trillion from P1.601 trillion a year ago.

Meanwhile, expenditures of the national government increased by 29 percent to P259.5 billion in August from P201.6 billion a year ago.

The BTr said productive government spending accounted for P231.2 billion or 89 percent of the total disbursements.

Interest payments accounted for the remaining 11 percent of total expenditures at P28.3 billion. This is seven percent higher than the P26.4 billion spent on interest payments in August last year.

“The uptick resulted from the combined effects of the discount for T-bills issuances for 2017 and 2018, and coupon payment for the 20-year domestic bond issued in February 2018, while the depreciated peso and higher LIBOR (London Inter-bank Offered Rate) rates continue to impact foreign payments,” the Treasury said.

From January to August, government expenditures amounted to P2.191 trillion, 23 percent up from last year’s level of P1.778 trillion.

Excluding interest payments from total spending, the Treasury said the national government was able to revert to a primary surplus of P25.7 billion last August. This is the third time the government was able to attain a primary surplus since January this year.

Despite this, the government continued to have a primary deficit of P43.3 billion year-to-date, a reversal from the P46.4 billion primary surplus posted in the first eight months of 2017.