Budget deficit widens but YTD goal missed

Budget deficit widens but YTD goal missed

The government incurred a wider budget deficit in September but missed its year-to-date goal, Treasury data released on Monday showed.

The month’s P96.2-billion shortfall was significantly wider than the P2.6-billion and P36.9-billion gaps posted in August and a year earlier, respectively.

Government revenues rose by 1 percent to P202.4 billion from P200.1 billion last year, while expenditures grew 26 percent to P298.6 billion from P237 billion. A month earlier, revenues and expenditures rose by 11 percent and 29 percent, respectively, to P256.9 billion and P259.5 billion.

The month’s result led to nine-month shortfall of P378.2 billion, which was 78 percent higher than the P213.1 billion posted during the comparative 2017 period.

It was, however, 5 percent or P18.4 billion lower than programmed. Revenue collections exceeded projections by P81 billion or 4 percent, but were outpaced by a 3-percent or P62.6 billion above-target increase in spending.
For September alone, the Bureau of Internal Revenue (BIR) accounted for the bulk of revenues with P130.6 billion, 8 percent lower compared to the year-earlier P141.4 billion and also a turnaround from August’s 8-percent rise.

In a statement, the Bureau of the Treasury attributed the lower BIR collections “to the high base effect of the P17.6-billion partial settlement from Mighty Corp. collected last year.”

The Bureau of Customs netted P51 billion — a 27-percent gain from last year’s P40.3 billion—while other offices contributed P1.8 billion, bringing total tax revenues for September to P183.4 billion, steady from a year ago. Tax revenue growth in August was 13 percent.

“The continued improvement in revenue performance is credited to the increased volume and value of importation, peso depreciation, and improved tariff classification and valuation,” the Treasury said.

Non-tax earnings, meanwhile, totaled P18.9 billion with the Treasury contributing P7.2 billion — down 2 percent. Other offices contributed P11.7 billion, 22 percent higher from last year.

The bulk of government spending was for primary expenditures, which rose by 26 percent to P265.9 billion. Interest payments of P32.7 billion accounted for the rest of state spending for the month.

“The higher interest bill was primarily because of coupon payments for RTBs (retail treasury bonds) issued in December 2017 and June 2018,” the Treasury noted.

Year to date, revenues grew by 17 percent year-on-year to P2.111 trillion while expenditures also registered 24-percent growth to P2.489 trillion.

Primary expenditures rose 26 percent to P2.218 trillion and interest payments recorded 9 percent growth to P271.3 billion. The Treasury said the interest payment tally was still P9.7 billion below program.

Netting out interest payments, the government recorded a P63.6-billion primary deficit in September, wider than the P10.5-billion primary shortfall last year.

Year-to-date, the primary balance hit a deficit of P106.9 billion, a reversal of last year’s P35.9-billion surplus.

The government is targeting budget deficits of P526 billion or 3 percent of gross domestic product (GDP) for 2018, P624 billion or 3.2 percent for 2019 and 3 percent for 2020-2022.

Last year, the government’s budget deficit of P350.6 billion was equivalent to 2.2 percent of GDP.