Government hits P33.4-B budget deficit in May

Rappler.com
The government incurs a deficit of P33.4 billion, P15.8 billion higher than the deficit recorded in the same month in 2016

WIDENING GAP. The cumulative budget deficit for January to May 2017 fell by 15% year-on-year to P63.6 billion. File Photo/AFP

MANILA, Philippines— The government slid back into a deficit in May after a hitting a surplus of P52.8 billion in April because of higher government spending, particularly on interest payments.

Data released by the Bureau of Treasury (BTr) on Friday, June 23, showed that the government recorded a deficit of P33.4 billion, P15.8 billion higher than the deficit recorded in the same month in 2016.

The government incurs a deficit when spending exceeds revenue brought in from tax and customs collections as well as non-tax revenue such as government shareholdings.

The deficit was incurred even when revenue collections for the month hit P228.3 billion or 14% higher than the previous year. Total government spending for the month hit P261.7 billion, P44.3 billion or 20% higher than in May 2016.

Of that spending, P21 billion when to interest payments, up 12% year-on-year due to the timing of payment for treasury bonds scheduled in April but paid in May.

Interest payments for January to May totaled P132.3 billion, equivalent 12.5% of the total expenditures, which the BTr noted was an improvement from 13.6%  from the same period in a 2016.

The government has targeted a wider budget deficit of 3% of the gross domestic product for the next 6 years, as it plans to significantly increase spending on infrastructure. So far however, the increased spending has yet to be felt by the economy.

Revenue

The Bureau of Internal Revenue (BIR) contributed a total of P158.7 billion in May, bringing its January to May collections to P716.8 billion, up by a 9% over revenues collcted in the same period last year.

The Bureau of Customs (BOC) contributed P39.6 billion, up 23% or P7.5 billion year-on-year which the BTr noted was the fastest month-on-month growth attained so far this year.

Cumulative collections for the year amounted to P174.9 billion, up 13% than in 2016.

The biggest gainer for May was non-tax revenues, particularly income from the Btr as  remittance of dividends on stockholdings from government-owned and -controlled corporations (GOCCs) started to come in.

BTr income for May stood at P18 billion, P12.2 billion more than the income posted for the same month last year according to the government agency.

From January to May,  BTr’s income fell 18% to total P48 billion, which the agency attributed to the P9.1-billion dip in dividend collections and the decline in income generated from government deposits and bond sinking funds, and social security fund investments by P1.1 billion and P3.2 billion, respectively.

Non-tax revenues from other offices hit P9.3 billion in May, bringing the year-to-date revenue of these offices to P47.7 billion – a 7% growth over 2016.

For January to May 2017, the government fiscal balance stood at a deficit of P63.6 billion. —Rappler.com