Fiscal deficit eases to ₱121.2B in July

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Metro Manila (CNN Philippines, August 24) — The national government budget deficit eased in July, as the growth in state revenues outpaced that in public spending, according to Treasury data released on Tuesday.

The Treasury bureau reported a deficit of ₱121.2 billion for the month, which was 13.57% less than the ₱140.2 billion logged in July 2020. It is also lower than the ₱149.9 billion shortfall in June.

"The fiscal performance for the period resulted from the 9.21% growth in revenue collection alongside a 0.69% modest increase in government expenditures," the agency said.

The latest figure brought the cumulative deficit for the January-July period to ₱837.3 billion, higher by 19.5% from the comparable period last year.

Revenues reached ₱256.1 billion in July, climbing by ₱21.6 billion from the same month last year. This came as the Bureau of Internal Revenue saw collections rise by 7.45% to ₱170.8 billion, while the Bureau of Customs raked in ₱57.2 billion, up 14.76%.

The Treasury itself likewise logged higher income during the month, with earnings hitting ₱13.6 billion. This is a 78% improvement from July last year, mainly due to higher dividend remittances, national government share from PAGCOR, and interest income from deposits.

Revenue from other offices, however, dwindled by 22.96% to ₱12.7 billion according to the Treasury. It partly attributed the decline to the high base effect of the one-off remittance from MPCALA Holdings Inc. for the Cavite-Laguna Expressway project.

Government expenditures logged a mild 0.69% rise in July to ₱377.3 billion, added the bureau.

"The modest increase can be attributed to the higher personnel services expenditures and infrastructure outlays, but were partially offset by the one-off Social Amelioration Program of the Department of Social Welfare and Development whose implementation of the second tranche was still ongoing in July last year," said the Treasury.

It also noted that the timing of subsidy releases to Philippine Health Insurance Corp. and National Housing Authority also weighed down on the pace of expenditures during the said period.

Interest payments hit ₱59 billion in July, slightly slower by 0.6% with the rise in domestic interest charges offset by lower foreign payments due to matured global bonds, explained the bureau.

House Ways and Means Committee chairman Rep. Joey Salceda noted the slowdown in deficit expenditure could be partly due to the return of stricter COVID-19-related restrictions.

"While it means well for fiscal space for a third Bayanihan package, it could also indicate that we did not spend as much as we should have, especially around ₱18 billion in excess funds from Bayanihans 1 and 2, based on my last meeting with the Department of Budget and Management," said Salceda in a statement.

The lawmaker noted that the lower deficit spending allows more room for a third Bayanihan package, which also contains assistance for sectors affected by the health crisis.

"I am confident that we will have a final agreement on the matter by next week. Time, of course, is of the essence," noted Salceda.