Government budget back to deficit in February

MANILA, Philippines — The government reverted back to a budget deficit in February after a quick surplus at the start of the year, but a narrower gap can still be expected as the tax season draws near.

Data from the Bureau of the Treasury showed that the government swung back to a budget deficit of P164.7 billion in February from a brief surplus of P88 billion in January.

The February fiscal turnout also jumped by 55 percent from the P106.4 billion deficit in the same period last year.

A budget deficit means that the government is spending beyond what it earned from revenue collections, at a significantly faster pace this time around.

For the two-month period, the budget deficit also picked up by 27 percent to P76.7 billion from P60.6 billion as state spending outpaced the expansion of revenue collections.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the still relatively elevated inflation and high interest rates caused a wider budget deficit in February.

For the next few months, however, the government is seen recording narrower budget deficits or even posting another surplus amid the tax collection season that would allow the administration to rake in higher revenues.

Finance Secretary Ralph Recto earlier admitted that the budget surplus in January is unlikely to be sustained over the coming months, more so for the rest of the year.

“I don’t expect a surplus by the end of the year. I’m just being cautious,” Recto said. “For as long as we hit our revenue and expenditure targets, I’m happy with that.”

Data showed that total revenue collection in February went up by 5.73 percent to P224 billion as against the P211.9 billion in the same month last year, as non-tax revenues declined.

The bulk or 94 percent of the revenues came from tax collections at P211.3 billion, up by nine percent. Non-tax collections, on the other hand, fell by 26 percent to P12.7 billion in February.

The Bureau of Internal Revenue’s haul grew by 6.65 percent to P138 billion, while the Bureau of Customs saw its collection improve by 12 percent to P70.6 billion from P62.9 billion year-on-year.

The income generated by the Treasury barely improved to P6.5 billion due to higher dividend remittances and share from the profit of the Philippine Amusement and Gaming Corp.

Collection from other offices including privatization proceeds and fees and charges for the month fell by a little over 40 percent to P6.2 billion on lower Malampaya proceeds.

Year-to-date, cumulative revenue collections picked up by 15 percent to reach P645.8 billion, while government spending jumped by 22 percent to P388.7 billion from P318.2 billion.

Primary expenditures at P340.9 billion accounted for 88 percent of the total spending, up by almost 20 percent.

The Treasury explained that spending for the month was driven by higher releases to local government units, particularly the national tax allotment and special shares from the tobacco excise tax.

Higher disbursements were also recorded in the departments of Health, Social Welfare and Development and Public Works and Highways for various programs on social protection and infrastructure.

Apart from primary expenditures, the government jacked up its interest payments by 40 percent to P47.8 billion from P34.1 billion a year ago on account of reissuances of domestic securities with coupon payments falling within the period.

For the two-month period, disbursements were also higher than revenues at 16 percent to P722.5 billion.