End-June budget gap widens by 27.8%

The country’s budget deficit widened by more than a fourth to P761.1 billion as of end-June, even as government spending fell nearly a tenth short of the programmed expenditure for the six-month period.

Total spending in the first six months reached P2.206 trillion, 9.6 percent off the P2.44-billion program, while tax and nontax revenue collection hit P1.49 trillion.

The underspending was mainly due to delays in the implementation of certain stimulus measures.

The Bureau of the Treasury’s cash operations report on Tuesday showed that the end-June fiscal deficit—which meant bigger expenditures than revenue collections—was 27.8 percent larger than the P560.4 billion a year ago.

This was, however, 29.7 percent lower than the P1.02 trillion that the Development Budget Coordination Committee has projected earlier.

Productive spending net of interest payments amounted to P1.99 trillion in the first half, 8.4 percent lower than the P2.18 trillion, which the national government had intended to spend.

Below-program spending

In a statement, the Treasury blamed the below-program spending to “the timing of subsidy releases awaiting requests from the concerned GOCCs (government-owned and/or -controlled corporations), the pending enactment of the GUIDE (government financial institutions unified initiatives to distressed enterprises for economic recovery) bill, outstanding checks as of end-June, which are yet to be encashed by contractors or suppliers of line agencies, as well as interest savings.”

But year-on-year, first-half disbursements rose 9.6 percent from P2.01 trillion a year ago. Primary expenditures sans interest payments grew 9.4 percent from P1.83 trillion last year.

In June alone, government spending jumped 13.2 percent year-on-year to P395.4 billion.

The Treasury attributed the year-on-year increase in government spending to “the disbursements for the infrastructure program of the Department of Public Works and Highways and capital outlay projects under the Armed Forces of the Philippines modernization program, emergency repatriation program of the Department of Labor and Employment’s Overseas Workers Welfare Administration, smart campuses program of the Commission on Higher Education and expenditures for the preparatory activities of the Commission on Elections for the 2022 national elections.”

Revenue exceeds target

Tax and nontax revenues from January to June not only grew year-on-year but also exceeded year-to-date targets.

First-half revenue was up 2.6 percent year-on-year to P1.49 trillion even as collections in June fell 30 percent to P245.6 billion due to a high base last year.

To recall, the government last year moved the deadline for the filing and payment of the 2019 income taxes to June 2020 instead of the mandatory April 15 cut-off.

The end-June revenue surpassed by 4.8 percent the P1.42-trillion goal for the period. INQ