THE country’s budget deficit from January to April widened to P347.9 billion, skyrocketing by 10,214.56 percent from the shortfall of P3.4 billion recorded in the same period a year ago, data from the Bureau of the Treasury (BTr) showed.
This was due to the increased government spending and drop in revenue collection amid the lockdown forced by the Covid-19 pandemic.
A deficit occurs when expenditures exceed revenues.
Actual government spending for the first four months of the year surged by 31.12 percent to P1.31 trillion, up from P999.8 billion in the same period in 2019—mostly on account of measures to respond to the pandemic.
Spending swelled with the releases for the implementation of the first tranche of the Social Amelioration Program (SAP) and the Small Business Wage Subsidy (SBWS) Program, Bayanihan grant to provinces, cities and municipalities, and other recovery and rehabilitation measures of the national government under the Bayanihan to Heal as One Act.
Interest payments also increased by 7.96 percent to P141.8 billion from the previous year’s P131.3 billion.
On the other hand, total revenues during the period fell by 3.36 percent to P963 billion from P996.4 billion in 2019.
Of the total revenues, tax revenues, including those collected by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), only settled at P745.8 billion, down by 17.58 percent from P904.8 billion in 2019.
Meanwhile, non-tax revenues more than doubled to P217.2 billion from P91.6 billion last year.
The BTr nearly quadrupled its contribution to P164 billion as of end-April. This is way above the P41.3 billion it collected in the same period in 2019. This is also 99.33 percent above the full-year target of P82.3 billion.
Netting out interest payments, a primary deficit of P206.1 billion was also recorded from January to April this year, a turnaround from the P127.9-billion primary surplus in 2019.
For April alone, the national government’s fiscal deficit rose to P273.9 billion, reversing the P86.9-billion budget surplus in the same month in 2019.
The April outturn was attributed to a robust 108.14-percent year-on-year acceleration in government spending versus the 39.17-percent drop in revenue collection due to the health crisis.
Expenditures in April soared to P461.7 billion, more than twice the P221.8 billion recorded in the same month last year.
Interest payments for the month were recorded at P21.9 billion, down by 7.04 percent or P1.7 billion compared to the same period last year due to a high base effect from April 2019 interest payments and maturities.
Total revenues for the month sank by 39.17 percent to P187.8 billion from last year’s P308.7 billion.
Of the total revenues in April this year, tax collections made up 67 percent or P124.9 billion, while non-tax sources contributed 33 percent or P62.8 billion.
April collections by the BIR plummeted 61.56 percent year-on-year to settle at P90.5 billion, mainly because of the imposition of the enhanced community quarantine in Luzon and other provinces, and the extension of deadlines for filing and payment of income and other taxes due for the month.
Likewise, collections by the BOC slipped by 33.38 percent to P34.4 billion in April from P51.7 billion raised in the same month last year.
The BTr raised P52.8 billion for the month, exceeding the P10.5 billion it collected a year ago.
The strong revenue performance of BTr was credited to the remittance of dividends and other income from government-owned and -controlled corporations in compliance with the Bayanihan law.
The national government recorded a primary deficit of P252 billion for April from a P110.4-billion primary surplus last year.
For this year, the Cabinet-level Development Budget Coordination Committee (DBCC) expects the country’s budget deficit to widen to 8.1 percent of GDP or P1.56 trillion.
The DBCC also projected revenues this year to decline to P2.613 trillion and disbursements to increase to P4.175 trillion.
In 2019, budget deficit was only P660.2 billion or 3.4 percent of GDP.
Actual revenues last year reached P3.138 trillion, while disbursements amounted to P3.798 trillion.
Image credits: Nonie Reyes, Roy Domingo
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