Budget deficit narrows to P117.9B

The national government’s budget deficit during the first seven months narrowed by almost three-fifths to P117.9 billion as expenditures remained slightly lower year-on-year, no thanks to the late implementation of this year’s budget.

The latest Bureau of the Treasury data showed that the end-July budget deficit declined 57.8 percent from P279.4 billion a year ago.

Expenditures on public goods and services between January and July amounted to P1.929 trillion, down 0.1 percent from P1.932 trillion during the same seven-month period last year.

Net of interest payments, primary expenditures declined by a bigger 1.3 percent to P1.699 trillion from a year ago’s P1.721 trillion.

In a statement, the Treasury said government disbursements had been “weighed down by the delayed approval of the 2019 budget coupled with the election ban on new public works.”

As the two houses of Congress squabbled over alleged “pork” insertions, President Duterte approved the P3.7-trillion 2019 national budget only in mid-April.

Given that the government had operated using reenacted 2018 appropriations at the start of the year, it underspent about P1 billion a day between January and April.

Government underspending pulled down first-half economic growth to an average of 5.5 percent, below the government’s 6-7 percent target range.

Last Thursday, Socioeconomic Planning Secretary Ernesto M. Pernia warned that gross domestic product (GDP) growth might fall below 5 percent next year if Congress would fail to pass the proposed P4.1-trillion 2020 budget on time.

For 2019, the Development Budget Coordination Committee (DBCC) had programmed a wider budget-deficit ceiling of P624.4 billion, equivalent to 3.2 percent of GDP, as the government wanted to spend more on public investments, especially infrastructure.

Economic managers have expressed optimism that the government could hit this year’s budget-deficit program and reverse slower first-half economic growth by fast-tracking the implementation of P803 billion in infrastructure projects for the remainder of the year.

On the other hand, tax and non-tax revenues collected from January to July rose 9.6 percent to P1.81 trillion from P1.65 trillion a year ago.

The Bureau of Internal Revenue’s tax take net of tax refund climbed 10.5 percent year-on-year to P1.247 trillion as of July, while the Bureau of Customs’ collections of import duties and other taxes grew 7.9 percent to P357.7 billion.

The Treasury’s income in the first seven months jumped 30.9 percent year-on-year to P102 billion as its July collection grew by more than a fifth, “mainly driven by higher income from national government deposits, investment from the bond sinking fund, guarantee fees and the national government’s share from Pagcor (Philippine Amusement and Gaming Corp.) income.”

The Treasury said its end-July income was already 38-percent higher than its P73.9-billion full-year goal.