THE national government’s budget deficit ballooned to P740.7 billion from January to August this year, equivalent to more than six times the budget gap in the same period last year.
Latest data from the Bureau of the Treasury showed the year-to-date budget deficit soaring by 515 percent from last year’s P120.4 billion. The end-August figure also exceeded the full-year fiscal deficit in 2019 at P660.2 billion.
This, as the government incurred a much wider budget deficit for the month of August amounting to P40.1 billion, 16 times the P2.5-billion fiscal gap recorded a year ago.
A budget deficit occurs when government expenditures exceed the level of its revenues.
For January to August this year, the government spent 20.79 percent more than it did last year. State expenditures jumped to P2.672 trillion for the eight-month period this year from P2.21 trillion in 2019.
Cumulative primary spending reached P2.402 trillion, 22.48 percent higher than P1.96 trillion in the same period last year.
Meanwhile, interest payments for January to August 2020 rose by 7.57 percent to P269.6 billion from last year’s P250.6 billion.
On the other hand, revenues for the eight-month period this year were down by 7.67 percent to P1.93 trillion from P2.09 trillion in the previous year.
Revenues came mostly from main collection agencies, with the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) collecting P1.303 trillion and P347.3 billion, respectively.
However, BIR saw its revenues dropping by 10.26 percent year-on-year from P1.452 trillion last year.
Still, the Treasury said the year-to-date collections of BIR already comprised 77 percent of the revised 2020 target of P1.685 trillion, although this is only 58 percent of the original program. BIR needs a monthly average collection of P96 billion for the rest of the year to reach its revised full-year program.
For its part, the BOC also suffered a 15.55-percent year-on-year drop in its revenue take as of end-August from P411.2 billion in 2019. The Treasury said this is equivalent to 51 percent of the original program.
For the year, it added. BOC has still to collect P158.9 billion, or P40.0 billion on average per month, to achieve its revised P506.2-billion program.
Year-to-date, the Treasury managed to collect P192.9 billion, a 78.8-percent increase year-on-year from P107.9 billion in 2019. It has already exceeded its P82.3-billion original full-year target and has already collected 90 percent of its revised program of P213.3 billion.
For the month of August, government expenditures inched up by an annualized rate of 0.38 percent, but revenues contracted by 13.05 percent year-on-year.
The amount of state expenditures for the month was almost flat at P283.3 billion compared to P282.2 billion in the same month of 2019.
In terms of revenues, the government collected P243.2 billion for the month, lower than the P279.7 billion in August 2019.
As tax collections are down amid the pandemic, the Development Budget Coordination Committee (DBCC) projects the country’s budget deficit to more than double to 9.6 percent of GDP or P1.815 trillion, from only 3.4 percent of GDP or P660.2 billion last year.
The DBCC also expects the economy to contract by 5.5 percent this year, potentially marking the country’s worst economic downturn in 35 years.