Gov’t incurs budget deficit of P62.5 B in June

MANILA, Philippines - The government incurred a P62.5-billion budget deficit in June as spending outpaced revenue to sustain economic growth.

The June results caused the fiscal position to revert to a deficit of P54 billion in the first half of the year, five percent higher than last year and a reversal of the five-month surplus this year.

The June shortfall represented a six-fold increase from the P8.5 billion recorded in the same month a year ago as expenditures surged 44 percent to P201.13 billion due to accelerated spending on infrastructure projects.

In the first six months, government spending was up 11 percent to P987.7 billion.

Total revenues in June rose six percent to P138.6 billion, bringing the first semester total to P933.7 billion or an increase of 11 percent year-on-year.  Tax revenues accounted for 88.6 percent of the total.

The Bureau of Internal Revenue (BIR) collected P94.1 billion in June, up six percent from a year ago while the Bureau of Customs collected P27.3 billion, up 18 percent.

Revenue from the Bureau of Treasury, meanwhile, dropped 21 percent to P7 billion in June mainly due to lower dividends received from government-owned corporations. Despite this, the BTR has already exceeded its 2014 full year target as income from January to June amounted to P62.9 billion.

Other offices, on the other hand, pitched in P10.1 billion for the month or almost the same level as last year.

The government recorded a net primary deficit of P42.9 billion in June, a reversal of the primary surplus reported in the same period a year ago.

Finance Secretary Cesar Purisima said the sustained growth of revenue collections aided by the Aquino administration’s efficient liability management program has resulted in increased ability to service its debt.

Interest payment as a portion of revenues slipped to 17 percent in the first half from 19 percent a year earlier and 20.7 percent in 2009.

 “As a result of prudent liability management more of these disbursements have been allocated to productive investments instead of our debt obligations,” Purisima said.