MANILA: The country’s budget deficit widened to its largest in four months in July, which saw slower revenue growth failing to offset a revival in spending.The gap which indicates more revenues were spent than earned hit P50.67 billion in July, wider than the previous year’s P32.2 billion, the Department of Finance reported yesterday.
It marked the widest deficit since March’s P74.39 billion and brought the seven-month tally to P170.98 billion. The ceiling for the year was pegged at P388.87 billion.
“Tax collections of state revenue agencies continued to grow during the first seven months of 2016, helping the government finance its accelerated spending program to further boost the country’s economy and transform it into a more inclusive one,” National Treasurer Roberto Tan said in a statement. Higher spending, particularly on infrastructure, has been promised by the Duterte administration as it also bats for lower income taxes, higher oil excise levies and sugar and junk food charges. Expenditures rose five percent to P220.92 billion, following a seven-percent slump in June which was a result of the election ban on public spending.
Before June, however, disbursements increased seven percent in January, 22 percent in February, 23 percent in March, 22 percent in April and 24 percent in May, data showed. “Normally, there is always a spending slowdown because of adjustments of the new administration,” Budget Secretary Benjamin Diokno said in a phone interview before data was released.
Broken down, interest payments dropped by a quarter, while agency spending rose 15 percent. “Adjustments will really affect expenditures, but should not have an impact on revenues,” said Alvin Ang, economist at Ateneo de Manila University. But revenues in July dipped one percent to P150.20 billion led by a 36-percent slump in the Bureau of the Treasury’s collection performance.
Collections by other offices also dropped 26 percent, while the Bureau of Internal Revenue (BIR) recorded its first revenue slump in seven months by one percent. BIR commissioner Caesar Dulay declined to comment, saying he has not seen the numbers. BIR accounts for more than 80 percent of state revenues.
The Bureau of Customs, meanwhile, improved it take three percent to P30.99 billion. “The idea is that the management change affected the outflow of money which is the expenditures. But as far as inflow or revenues are concerned, there should not be any slowdown,” Ang said. “Adjustments on spending however could last for one quarter. After that, we may see some changes,” he added.
