ECQ cash aid bloated end-August budget deficit by 29.4% to P958.2B

With cash aid given away to poor households locked down amid a surge in COVID-19 cases, government spending on public goods and services jumped by over a third in August and jacked up eight-month expenditures by more than a tenth, thus widening the budget deficit by 29.4 percent year-on-year to P958.2 billion.

The Bureau of the Treasury’s latest cash operations report on Thursday showed that the national government’s end-August budget deficit further expanded from P740.7 billion during the first eight months of last year.

The amount spent by the government from January to August reached P2.96 trillion, up 10.9 percent from P2.67 trillion a year ago.

Primary expenditures or spending net of interest payments for government borrowings grew by a faster 11.3 percent year-on-year to P2.67 trillion as of August.

Meanwhile, end-August tax and nontax revenues increased by 3.9 percent year-on-year to P2.01 trillion from last year’s P1.93 trillion.

During the month of August alone, the budget deficit ballooned by 201.8 percent to P120.9 billion from a year ago’s P40.1 billion.

Disbursements in August climbed 34.2 percent year-on-year to P380.2 billion, the second-fastest monthly growth in expenditures so far this year.

“The releases of various COVID-19 funding requirements, including the financial assistance to households affected by the implementation of enhanced community quarantine (ECQ) in the National Capital Region and subsidy releases to PhilHealth (the state-run Philippine Health Insurance Corp.) drove the higher outturn for the month,” the Treasury said in a statement.

The Department of Budget and Management had released a total of P14.67 billion sourced from agencies’ 2020 budget savings for the dole outs distributed in areas placed under the strictest ECQ due to the threat posed by the more infectious Delta strain of COVID-19.

Productive spending last month rose 36.6 percent year-on-year to P356.3 billion.

The revenues collected by the government last August grew 6.6 percent year-on-year to P259.3 billion.

The Bureau of Revenue’s (BIR) August tax take, however, declined by 0.9 percent year-on-year to P186.1 billion. The BIR’s end-August collections were nonetheless up 6.6 percent to P1.81 trillion.

The import duties and other taxes collected by the Bureau of Customs in August rose 20.2 percent year-on-year to P53.4 billion, bringing its eight-month revenues to P412.3 billion or 18.7-percent higher.

The Cabinet-level Development Budget Coordination Committee had programmed a record P1.86-trillion budget deficit for 2021, equivalent to 9.3 percent of gross domestic product.

The wider fiscal deficit was aimed at ramping up spending amid the prolonged fight against COVID-19 despite weaker revenue generation due to the pandemic-induced economic slump.