Fiscal deficit narrows to P74 billion in Q1

MANILA, Philippines — The government posted a narrower fiscal deficit in the first quarter amid lower-than-target spending due to project delays brought about by the coronavirus disease 2019 or COVID-19 pandemic, the Bureau of the Treasury (BTr) reported yesterday.

According to the latest data from the BTr, the government incurred a budget deficit of P74 billion in the first quarter, 17.97 percent narrower than the P90.2 billion deficit incurred a year ago.

The BTr said this was likewise 77.76 percent behind the P332.9 billion deficit ceiling set for the period.

As a result, the first-quarter fiscal deficit stood at 1.65 percent of gross domestic product (GDP), declining from the revised deficit-to-GDP ratio of 2.04 percent in the same quarter last year, the BTr said.

For March alone, the government incurred a budget shortfall of P59.5 billion, which slightly widened by 1.83 percent from the P58.4 billion recorded in the same month of 2019.

A deficit occurs when the government spends more than the revenues that it generates.

Treasury data showed that government disbursements in the first quarter rose by 9.16 percent to P849.2 billion from P778 billion in the same period last year.

However, this was 14.48 percent or P143.8 billion short of the spending target of P993 billion.

Nevertheless, the BTr said the government’s expenditure effort during the quarter improved to 18.89 percent of the GDP from 17.59 percent a year ago.

The BTr attributed the below-target spending to the delays in the implementation of programs and projects amid the enhanced community quarantine in Luzon and other parts of the country as well as lower-than-programmed interest payments and net lending.

For March alone, government disbursements grew by nearly 16 percent to P333.2 billion from P287.3 billion due to the first tranche of the Salary Standardization Law V, maintenance expenses of various agencies, and the release of the block grant to the Bangsamoro Autonomous Region.

On the other hand, the BTr said the government’s total revenues for the first quarter rose by 12.72 percent to P775.2 billion from P687.7 billion in the same period last year, driven by higher dividend remittances from government-owned and -controlled corporations (GOCCs).

This was likewise 17.43 percent above the P660.1 billion revenue target for the quarter.