Budget gap widens to P1.2 trillion in 10 months

MANILA, Philippines — The government continued to spend more than what it earned in October, pushing the budget deficit to P1.2 trillion from January to October, 28 percent higher than last year’s P940.58 billion, the Bureau of the Treasury (BTr) said yesterday.

For October alone, the shortfall widened by five percent to P64.29 billion as spending reached P317.38 billion while revenue stood at only P253.09 billion.

During the 10-month period, government spending grew by 12 percent to P3.7 trillion, while revenue rose by only six percent to P2.5 trillion.

Primary expenditures made up over 90 percent of total government spending at P285.84 billion, while interest payments accounted for the remaining 10 percent at P31.54 billion.

On the other hand, tax revenue jumped by more than seven percent to P219.07 billion as non-tax income rose by over 42 percent to P34.02 billion.

Collections of the Bureau of Internal Revenue rose by nearly seven percent to P162.12 billion from P152.07 billion, while the Bureau of Customs generated P55.53 billion during the month, up by 10 percent from P50.59 billion a year ago.

Higher revenue remitted by the Treasury and profit reported by state-run firms also contributed to the increase in non-tax revenue.

In October, Treasury income rose by nearly 30 percent to P8.98 billion from P6.91 billion as the agency gained returns from investments it made.

For 2021, the government expects its budget deficit to reach P1.86 trillion, or 9.5 percent of gross domestic product (GDP), based on latest estimates. Thus, the government can only afford a fiscal shortfall of around P663 billion for the rest of the year to land within target.

The government expects revenue generation to intensify as lockdown measures have been loosened in most areas nationwide and industries have been permitted to reopen at up to 70 percent capacity.

The government aims to bring down its budget deficit to P1.67 trillion this year, or 7.7 percent of GDP.