July 23, 2019
THE government posted a narrow budget deficit in June as revenue collections surged and state spending weakened, the Bureau of the Treasury (BTr) said on Monday.
In a statement, the Treasury said last month’s P41.8-billion deficit reversed the P2.6-billion surplus in May, but marked a 22.93-percent (P12.5-billion) decrease from the P54.3-billion shortfall a year ago.
Government revenues rose by 4.32 percent to P233.9 billion in June from P224.2 billion last year, while expenditures declined by 0.99 percent to P275.7 billion from P278.5 billion. A month earlier, revenues grew by 22.5 percent and expenditures expanded by 7.8 percent.
Last month’s deficit reduced the first-half shortfall to P42.6 billion, 77.91 percent lower than the P193 billion posted in January-to-June 2018.
For June alone, the Bureau of Internal Revenue (BIR) accounted for the bulk of revenues with P157.8 billion, a 15.39-percent increase from P136.8 billion a year earlier. The growth was slower than May’s 19.1 percent.
The Bureau of Customs (BoC) netted P51.3 billion — a 2.50-percent gain from last year’s P50 billion — while other offices contributed P1.4 billion, bringing total tax revenues for the month to P210.5 billion.
Tax-revenue growth was slower at 11.85 percent in June from 17 percent a month earlier.
Non-tax earnings, meanwhile, reached P23.4 billion, with the Treasury contributing P10.7 billion — up 37.13 percent — “driven by dividend remittances, income from NG (national government)
deposits, Bond Sinking Fund investments, and NG share in Pagcor (Philippine Amusement and Gaming Corp.) income,” the bureau said.
The bulk of government spending — P246.6 billion — was for primary expenditures, which fell by 3.06 percent from P254.4 billion a year ago.
Interest payments (IPs) of P29.1 billion, meanwhile, accounted for the rest of state spending. It rose by 20.91 percent year-on-year, which the bureau said “can be attributed to the discount for T/Bills (Treasury bills) and coupon payment for the 5-YR RTB (five-year retail Treasury bonds) issued this year, as well as IP of foreign loans availed last December and higher LIBOR rates.”
In a comment, ING Bank Manila senior economist Nicholas Antonio Mapa said the decline in government spending could drag second-quarter gross domestic product (GDP) growth.
“Despite the government’s best efforts to implement [its] ‘catch-up spending’ [plan], the projected misstep coming from the government spending side, coupled with possible handicapped capital formation, could mean 2Q GDP [would struggle] to get past 6 percent again,” he said.
In May, the country’s economic managers revealed their “catch-up plan” that set an infrastructure spending target of P792.97 billion for the rest of the year after actual infrastructure spending reached P207.2 billion in January to March.
Meanwhile, revenues in the first six months of 2019 jumped by 9.71 percent to P1.547 trillion year-on-year.
The BIR’s six-month tally of P1.066 trillion was 10.56 percent higher than the year-ago figure, while the BoC’s year-to-date take of P303 billion was a 8.45-percent increase from last year’s amount.
Primary expenditures dropped by 1.94 percent to P1.410 trillion during the period, while IPs grew by 8.80 percent to P180.1 billion.
Year to date, the primary balance hit a surplus of P137.4 billion, a reversal of last year’s P27.5-billion deficit.
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