By Justine Irish D. Tabile, Senior Reporter
NATIONAL GOVERNMENT (NG) the budget deficit widened by 9.39% in June as spending that exceeds income growth, although i first half fithe scal gap remained open in accordance with the government’s plan, the information of the Bureau of the Treasury (BTr) is shown.
In a statement on Thursday, the Department of Finance said the budget deficit reached P264.3 billion from P241.6 billion in the same month last year.
“The 9.39% (or P22.7-billion) increase in the fiscal deficit was supported by a 5.51% annual expenditure growth that outpaced the 2.46% increase in revenue collection,” said BTr.
Month-on-month, the budget balance widened from a deficit of P198.5-billion in May.
Government expenditures increased by 5.51% to P578.7 billion in June from P548.5 billion last year. BTr said the spending spree was driven by the higher allocation of local government units for the National Tax Allotment, as well as the release of subsidies to government and controlled organizations (GOCC) such as Food Terminal, Inc. to implement the Rice-for-All Program.
The Ministry of Finance also pointed out that the increase in fees is due to direct payments made by development partners to suppliers or transport contractors through various foreign aided trains. projects of the Ministry of Transport.
Principal expenses (net of interest payments) increased 5.14% to P516.3 billion in June from P491.1 billion in the same month last year. This accounted for 89.22% of the total amount paid.
Interest payments increased by 8.73% to P62.4 billion from P57.4 billion last year.
In June, NG recorded a primary deficit of P201.9 billion, widening by 9.59% from the P184.2-billion deficit last year.
Meanwhile, revenue collection increased by 2.46% to P314.5 billion from P306.9 billion in the same month last year, as higher tax revenue failed to offset the 43.53% drop in nontax revenue.
Tax revenue, which made up the bulk or 95.2% of total collections, increased by 6.86% to P299.3 billion from P280.1 billion last year.
The collection of the Bureau of Internal Revenue (BIR) increased by 5.07% to P210.7 billion in June from P200.5 billion last year. The Bureau of Customs (BoC) collection jumped 11.88% to P86.2 billion from P77 billion last year.
The Department of Finance says the BIR’s high collection is due to “strengthening of tax administration and enforcement efforts, ongoing modernization efforts, and improving taxpayer compliance.”
On the other hand, nontax income fell to P15.1 billion in June from P26.8 billion a year ago.
If we go down, the revenue of the Department of Finance decreased by 58.45% to P6.7 billion, while the income from foreign countries.frevenues decreased by 21.17% to P8.5 billion.
The Ministry of Finance said this decrease was due to the distribution of dividends earlier this year.
SIX MONTH BUDGET GAP
During January to June, money the gap widened by 2.79% to P786.8 billion from a deficit of P765.5 billion last year, BTr data showed.
This represents 47.4% of the revised P1.66-trillion plan approved by the Development Budget Coordinating Committee (DBCC).
Consolidated net income rose 5.67% to P2.39 trillion in the six-month period from P2.26 trillion recorded in the same period last year. This was 49.68% of the P4.81 trillion plan for the year.
As of the end of June, tax revenue increased by 5.38% to P2.14 trillion, as BIR collections increased by 4.96% to P1.63 trillion and Customs collections increased by 7.21% to P491.9 billion.
“The year-to-date growth in (BIR) collections is driven by higher collections from corporate income tax, personal income tax, value-added tax (VAT), other tax percentages, and miscellaneous taxes,” the Treasury said.
It revealed an increase in BoC collections due to an increase in VAT by 10.34%, mainly due to the increase in oil prices.
“These benefits have effectively offset the 2.73% decline in tax collection, partly due to the decline in the volume of imported oil and the temporary suspension of excise duty on LPG. and kerosene,” he added.
Nontax revenue increased by 8.26% to P246.5 billion at the end of June, as BTr revenue jumped 25.79% to P182.7 billion offsetting a 22.63% decline in the otherfnet income reached P63.8 billion.
Meanwhile, expenditures increased by 4.94% to P3.18 trillion in the January to June period from P3.03 trillion last year. This was already 49.1% of DBCC’s P6.47-trillion payment plan.
The primary budget deficit decreased by 13.56% to P303.1 billion in the first six months from P350.7 billion in the same period last year.
‘I’M ALWAYS STRONG’
Finance Secretary Frederick D. Go said that he remains confident that the financial situation will recoverchief among the targets in the second half of the year.
“We are always confident,” he told reporters on Thursday. “The DoF is confident in the capabilities of our revenue generating institutions to be able to achieve their targets in the second half of the year.”
According to BTr, the first half deficit was P1.4 billion smaller or 0.17% less than the government’s P788.2-billion plan.
The total revenue collection missed the P2.388.5-trillion target by only 0.01%, after tax revenue exceeded the P2.16-trillion plan by 0.77%. Nontax revenue exceeded the first-half plan of P230.2 billion by 7.09%.
First-quarter spending also fell 0.05% from the P3.176-trillion six-month plan.
The primary deficit was 2.16% higher than the P296.7-billion deficit under the plan.
“Looking ahead, we believe the government still has room to continue pumping the economy in the second half of the year while staying within its fiscal targets,” China’s Chief Economist Domini S. Velasquez said in a Viber message.
However, he warned that NG’s financial environment is becoming increasingly difficult.
“Therefore, we expect public spending to focus on high-growth investments, especially infrastructure and job-creating projects, which are likely to provide a significant boost to growth while maintaining financial stability,” he added.
Chief Economist Rizal Commercial Banking Corp. Michael L. Ricafort said the war in the Middle East led to sluggish economic growth that reduced government spending.
“Change measures to improve NG’s financial performance and debt management, as well as measures to change priorities … will help increase government revenue and reduce government costs,” he said in a Viber message.
However, Mr. Ricafort said the expected acceleration in spending in the second quarter “will widen the budget deficit in the coming months.”
