Budget deficit swells in 4 months

MANILA, Philippines — The national government’s fiscal position swung to a deficit in April as disbursements doubled, while revenues posted a double-digit contraction amid the coronavirus disease 2019 or COVID-19 pandemic, according to the Bureau of the Treasury (BTr).

Latest data from the BTr showed that the national government incurred a fiscal deficit of P273.9 billion in April, a reversal of the P86.9 billion surplus recorded in the same period last year.

The BTr said this brought the cumulative budget deficit in the first four months to P347.9 billion, a dramatic increase from last year’s deficit of P3.4 billion.

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

According to the Treasury, the fiscal position reverted to a deficit last month due to the acceleration in government disbursements, driven by spending for COVID-19 response amid a double-digit drop in revenues resulting from the ill effects of the pandemic.

Revenues declined by nearly 40 percent to P187.8 billion in April from P308.7 billion last year.

The BTr said P124.9 billion of the total amount came in the form of tax revenues, while the remaining P62.8 billion was non-tax collections.

In particular, taxes collected by the Bureau of Internal Revenue (BIR) dropped by 61.56 percent to P90.5 billion in April from P235.5 billion in the same month last year.

“The slower outturn was attributed to the Luzon-wide enhanced community quarantine, which was also implemented in other provinces and the extension of deadlines for the filing and payment of income and other taxes due for the month amid the pandemic crisis,” the Treasury said.

Tthe BIR extended the deadline for the filing of various tax returns and the payment of corresponding taxes three times due to the community quarantine.

The deadline for income tax returns, in particular, was postponed to June 14 instead of the usual April 15 due date.

Similarly, collections of the Bureau of Customs’ slipped by 34 percent to P34.4 billion in April from the P51.7 billion in the same month last year.

On the other hand, revenues from the BTr reached P52.8 billion in April, five times larger than the P10.5 billion recorded a year ago.

The Treasury attributed this growth to the remittance of dividends and other income from government-owned and -controlled corporations (GOCCs) in compliance with Republic Act 11469 or the Bayanihan to Heal as One Act.

Under the law, unused GOCC funds and investments, including unutilized or unreleased subsidies, were reallocated to help address the COVID-19 crisis.

Collections from other sources, including privatization proceeds and fees and charges, amounted to P10.1 billion last month, up by 6.61 percent from P9.4 billion last year.

Year-to-date, the national government’s revenues as of April inched down by 3.36 percent to P963 billion from P996.4 billion in the same period a year ago.

The BIR’s aggregate collection from January to April declined by 20.52 percent to P559.3 billion, while BOC revenues contracted by 7.13 percent to P179.7 billion.

Cumulative revenues of the BTr in the first four months of 2020 rose to P164 billion, almost four times higher than comparable figures last year and already 99.33 percent above the full-year target of P82.3 billion.

Meanwhile Treasury data showed that government disbursements in April surged by 108.14 percent to P461.7 billion from P221.8 billion last year.

“Spending was boosted by the releases of funds for the implementation of the first tranche of the Social Amelioration Program (SAP) and the Small Business Wage Subsidy (SBWS) Program, Bayanihan Grant to Provinces, Cities, and Municipalities, and other recovery and rehabilitation measures of the National Government under the Bayanihan to Heal as One Act,” the Treasury said.