Budget deficit hits P14.1 billion in January

MANILA, Philippines — The national government continued to incur a budget shortfall in January as spending outpaced revenue collections amid the COVID-19 crisis.

The budget deficit reached P14.1 billion during the month, reversing the P23-billion surplus in the same month last year, according to the latest cash operations report of the Bureau of the Treasury (BTr).

This fiscal outturn resulted from a 1.18 percent year-on-year rise in government spending against an 11.51 percent contraction in revenue collection.

Revenue collection in January reached P260.7 billion, falling from P294.6 billion in the same period last year as tax collections declined.

Tax collections made up 89 percent of the total at P232.7 billion, while those from non-tax sources comprised 11 percent of the total at P28 billion.

Collections by the Bureau of Internal Revenue (BIR), the country’s largest tax collector, fell by 6.54 percent year-on-year to P182.2 billion in January as business activity continued to be limited by mobility restrictions.

Similarly, collections by the Bureau of Customs (BOC) fell by 15.41 percent year-on-year to P47.3 billion.

Meanwhile, the (BTr) suffered a 34.27 percent contraction in non-tax revenue, totaling P18.7 billion for the month.

The decrease was attributed to a high base effect of dividend remittances from GOCCs in January 2020 and the 59 percent drop in the share of the national government from the income of PAGCOR.

Other offices accounting for other non-tax revenues such as privatization proceeds and fees and charges contributed P9.4 billion in January, registering a 24.97 percent drop over comparable collections recorded a year ago.

Government expenditures for January reached P274.8 billion, an increase of 1.18 percent from P271.6 billion last year.

BTr said the uptick was tempered by lower interest payments which declined by 23.43 percent year-on-year to P47 billion, mainly because of the redemption of global bonds in 2020 and the settlement of premiums on reissued Treasury bonds.

Interest payments in January made up 18.04 percent of revenues and 17.11 percent of expenditures, both lower compared with the previous year’s levels of 10.84 percent and 22.61 percent, respectively.

Excluding interest payments from expenditures, the national government had a primary surplus in January, around 67 percent lower than last year’s primary balance of P84.5 billion.