THE national government recorded a narrower budget deficit in the first quarter of the year at P74 billion, down by 17.97 percent from last year’s P90.2 billion as government spending fell below target, latest data from the Bureau of the Treasury showed.
The cumulative deficit of P74 billion also lagged behind the P332.9-billion program by 77.76 percent.
Relative to GDP, the Q1 2020 deficit stood at 1.65 percent, declining from last year’s 2.04 percent deficit-to-GDP ratio.
Government expenditures as of end-March only reached P849.2 billion, falling 14.48 percent short of the 993-billion program for the period due to the delays in program implementation with the enhanced community quarantine and lower-than-programmed interest payments and net lending.
Nonetheless, government spending for the first quarter of the year still exceeded last year’s P778 billion.
On the other hand, revenues for the first three months reached P775.2 billion, surging 12.72 percent from P687.7 billion posted in the same period in 2019. The government also exceeded its P660.1-billion revenue target for the period by 17.43 percent.
A budget deficit occurs when expenditures exceed revenues.
For March alone, the national government incurred a wider budget deficit for this year at P59.5 billion, reflecting a 1.83-percent increase from 2019’s P58.4 billion.
“The higher fiscal gap is due to the larger nominal increase in government spending compared to revenue growth,” the Treasury said in a statement on Monday.
Of the P775.2-billion revenues as of end-March, 80 percent or P620.8 billion came from tax revenues, while 20 percent or P154.4 billion came from nontax revenues.
Nontax collections for the period more than doubled from last year due to the early remittance of dividends from government-owned and -controlled corporations (GOCCs) in line with the implementation of the Bayanihan to Heal as One Act.
Revenues collected by the Bureau of the Treasury skyrocketed to P111.2 billion, three times higher compared to its achievement in the first quarter last year. To date, the Treasury has already breached its full-year target of P82.3 billion, mainly on account of higher dividend remittances and interest on advances to GOCCs which have both exceeded full-year targets by P63.4 billion and P7.4 billion, respectively.
Income from other sources, including privatization proceeds and fees and charges, was up 5.60 percent with actual collections amounting to P19.6 billion.
As for tax revenues, the Bureau of Internal Revenue’s (BIR) collection was flat at P468.8 billion as of end-March from P468.2 billion in the same period in 2019 due to the imposition of the Luzon-wide enhanced community quarantine in mid-March in response to the Covid-19 pandemic. Despite this, BIR’s first-quarter 2020 collection was still higher than its P454-billion target for the period.
For its part, the Bureau of Customs’ (BOC) Q1 tax take increased to P145.3 billion from P141.9 billion in 2019. This, despite BOC’s collections dropping to P44.6 billion in March from P49.3 billion in the same month in 2019.
In terms of government spending, operating expenditures comprised the bulk at P729.3 billion as of end-March, climbing by 8.82 percent from P670.2 billion in 2019. This is also below the P854.2-billion program for the period.
Interest payments for the first quarter of the year also went up to P119.9 billion from P107.8 billion in 2019.
For March, interest payments also grew by 17.96 percent year-on-year to P43.1 billion from P36.6 billion in the same month in 2019 owing to coupon payments for five-year retail treasury bonds issued in 2019, and the timing of the payment for 25-year fixed rate Treasury Bonds which were paid on April 1, 2019 (instead of March 30), due to an official holiday.
As of end-March, the government’s cumulative primary balance remained in surplus at P45.9 billion and was more than double the P17.5 billion recorded a year ago.
Image credits: Roy Domingo
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