5-month budget gap widens to P 562.2B
The national government’s budget gap swung to a deficit of P202.1 billion in May as spending for COVID-19 response exceeded still weak tax collection due to the pandemic.
Last month’s budget deficit reversed the P2.6-billion surplus a year ago, when spending on public goods and services was slowed by the delayed approval of the P3.7-trillion 2019 national budget, the latest cash operations report released by the Bureau of the Treasury on Tuesday showed.
This year, however, the COVID-19 pandemic ramped up government expenditures—during the month of May alone, disbursements rose 12.4 percent year-on-year to P353.6 billion, of which P335.3 billion were spent on items net of interest payments, or the so-called “productive spending.”
“The acceleration was propelled by the releases for the second tranche of the small business wage subsidy under the Social Security System in line with the implementation of Republic Act No. 11469” or the Bayanihan to Heal as One Act, the Treasury explained.
Lowest monthly take
Under the SBWS program, the government gave away two tranches of P5,000 to 8,000 in May to cover two months’ worth of salaries of workers in small and medium enterprises that temporarily closed down during the COVID-19 lockdown.
On the other hand, tax and nontax revenues collected last May fell 52.3 percent year-on-year to P151.5 billion, which Treasury data showed was the lowest monthly take since February 2017’s P151.8 billion.
Reduced import duties
Extended tax payment deadlines pulled down the Bureau of Internal Revenue’s May collection by 44.1 percent to P114.4 billion, while lockdown restrictions on trade also reduced the import duties and other taxes generated by the Bureau of Customs by 47.1 percent to P30.8 billion.
Nontax revenues slid 87.8 percent year-on-year to P6.3 billion in May as the bulk of state-run corporations’ dividends were already remitted in advance as early as April to help finance the administration’s COVID-19 response. The lockdown also delayed some privatization activities as well as collection of other fees and charges as government agencies had minimal operations.
From January to May, the cumulative budget deficit ballooned by 69,390 percent to P562.2 billion from only P809 million during the first five months of last year.
End-May expenditures climbed 26.6 percent year-on-year to P1.66 trillion, while revenues declined 16.1 percent to P1.1 trillion.
Amid the COVID-19 crisis, the Cabinet-level Development Budget Coordination Committee had projected the end-2020 budget deficit to reach P1.61 trillion, equivalent to 8.4 percent of gross domestic product. INQ
For more news about the novel coronavirus click here.
What you need to know about Coronavirus.
For more information on COVID-19, call the DOH Hotline: (02) 86517800 local 1149/1150.
The Inquirer Foundation supports our healthcare frontliners and is still accepting cash donations to be deposited at Banco de Oro (BDO) current account #007960018860 or donate through PayMaya using this link.
