Deficit widens in July on faster gov’t spending

The budget deficit widened to P32.2 billion in July due to “robust expenditure growth,” the Department of Finance (DOF) said on Monday.

The latest cash operations report of the DOF showed that the deficit last July expanded by 1,727 percent from only P1.8 billion a year ago, as the double-digit jump in expenditures outpaced the single-digit growth in revenue collections.

The deficit posted in July was nonetheless 54-percent lower than the P69.4-billion goal.

Last July, public spending increased by 25 percent to P210.7 billion from P168.5 billion last year.

“The acceleration in government spending for July is the fastest so far for 2015,” the Treasury noted in a statement.

Interest payments rose 10 percent to P53.1 billion in July from P48.2 billion a year old.

However, total expenditures that month were 21-percent lower than the P265.9-billion target.

Revenues grew by 7 percent to P178.5 billion in July from P166.7 billion last year, even as the collections of the bureaus of Internal Revenue (BIR) and Customs (BOC) both slid by 1 percent year-on-year to P118.2 billion and P30 billion, respectively.

The Treasury’s revenues nonetheless jumped by 89 percent to P14.2 billion “due to higher income from BSF/SSF (Bond Sinking Fund/Securities Stabilization Fund) investments and higher dividends on shares of stocks held by the government,” it explained.

Revenues of other offices also zoomed by 82 percent year-on-year to P16.1 billion mainly due to the P5.46-billion concession fee earned by the government from the Cavite-Laguna Expressway project, the Treasury said.

Total revenues, however, were 9-percent below the P196.5-billion target for July.

The end-July deficit fell by 67 percent to P18.5 billion from P55.7 billion a year ago.

However, the projected deficit for the first seven months was P224.5 billion, or 92-percent bigger than the actual figure.

In the first seven months, the growth in revenues remained faster than expenditures.

End-July revenues increased by 15 percent to P1.264 trillion from P1.101 trillion last year. The actual take, however, was 2-percent lower than the P1.293-trillion target for the seven-month period.

The end-July collections of the BIR rose by 8 percent year-on-year to P824.1 billion; the BOC, up 2 percent to P208.7 billion; the Treasury, up 15 percent to P81.2 billion; and of other offices, up 138 percent to P150.2 billion.

Expenditures during the first seven months totaled P1.283 trillion, 11-percent higher than the P1.156 trillion spent by the government in the same period last year.

Government spending, however, was 15-percent below the P1.518 trillion target for the period.

“The pace of expenditure growth we are seeing has a clear positive trend since we adopted a whole-of-government approach to addressing underspending. Expenditures are on track to drive our growth for the third quarter,” Finance Secretary Cesar V. Purisima said in a statement.

“We will continue to unblock constraints to growth. It is encouraging to note that we are starting the quarter with a better footing on the public expenditure side. We are committed to making the trend lines hold and sustain this uptick,” the Finance chief added.