Philippine economy

Philippines’ budget deficit rises to P1.7 trillion in 2021

Ralf Rivas
Philippines’ budget deficit rises to P1.7 trillion in 2021

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The budget deficit in 2021 is 21.8% higher than in 2020

MANILA, Philippines – The national government’s full-year budget deficit reached P1.7 trillion, data from the Bureau of the Treasury showed on Tuesday, March 1.

The budget deficit in 2021 was 21.8% higher or P298.7 billion more than the figure posted in 2020, as expenses jumped 10.6% amid the pandemic.

A budget deficit occurs when a government’s expenses exceed revenues. The gap is filled in by borrowing from domestic and foreign sources. (READ: Philippines ends 2021 with P11.7-trillion debt)

State economic managers program the deficit in relation to gross domestic product (GDP) to maintain the country’s fiscal health. Set the gap too wide or too narrow and it may have negative impacts on the overall economy.

For 2021, the programmed deficit was 9.3% of GDP, while the actual figure stood at 8.6%.

Revenues

Government revenues reached P3 trillion in 2021, an improvement of 5.4% or P149.6 billion more than the revenues posted in 2020.

Revenues were also P124 billion better than the P2.9-trillion program, as the economy gradually reopened.

The government said 91% of revenues were from taxes, while non-tax sources comprised the remaining 9%.

The Bureau of Internal Revenue collected P2.1 trillion in 2021, a 6.5% improvement from 2020 and just 0.15% short of its full-year target.

Expenditures

Full-year disbursements reached P4.7 trillion, 10.6% higher due to infrastructure and other capital expenditures, as well as pandemic-related expenses.

Expenditures were still lower by 1.3% or P61.5 billion compared to the full-year program, mainly due to lower-than-programmed interest payments.

Meanwhile, interest payments stood at P429.4 billion, up by 12.9%. However, this is 19.2% lower compared to the programmed P531.5 billion. This generated P102.1 billion in savings. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.