Metro Manila (CNN Philippines, March 17) — The country’s fiscal deficit stood at ₱14.1 billion in January, a reversal of the budget surplus posted last year, the Treasury Bureau said Wednesday.
Data from the agency revealed the national budget gap contracted by 161% this January from the ₱23 billion fiscal surplus posted the same month in 2020.
The recent figure resulted from the 1.18% year-on-year growth in public expenditure, a meager rate compared to the 11.51% shrinkage in revenues raked in by the state.
The government made ₱260.7 billion in collections in January, which the bureau noted was ₱33.9 billion less than the amount in the same month in 2020.
Tax and customs duty collections comprised ₱232.7 billion of state revenues during the period, while non-tax sources provided ₱28 billion.
The Bureau of Internal Revenue raked in ₱182.2 billion, 6.54% less than what it collected in 2020. The Treasury noted this is due to the “continued economic disruptions” caused by the COVID-19 pandemic. The Bureau of Customs, meanwhile, collected ₱47.3 billion, less by 15.41% from the same month last year.
The Treasury itself posted a 34.27% drop in revenues, hauling ₱18.7 billion in January.
“The decrease was attributed to a high base effect of dividend remittances from GOCCs in January 2020,” it said, citing the 58.69% fall in the national government’s share from the Philippine Amusement and Gaming Corporation’s income.
Other offices also saw contributions drop annually by 24.97% to ₱9.4 billion during the month.
Meanwhile, state spending logged a “modest” growth of ₱3.2 billion in January compared to a year ago. Lower interest payments tempered the uptick, posting a plunge of 23.43% or ₱14.4 billion.
The bureau said this is primarily because of the “redemption of Global Bonds last year and the settlement of premiums on reissued Treasury Bonds.”
Spending outside of interest payments, however, grew by 8.37% annually to ₱227.8 billion. The Treasury attributes this to higher allocations of local governments and disbursements of line departments.
A budget deficit occurs when the state spends more than it collects, prompting the government to make more loans. The country’s outstanding debt already breached ₱10.3 trillion in January, a new record high as the state borrows from the central bank anew to beef up its COVID-19 war chest.
In an email to CNN Philippines, UnionBank chief economist Ruben Carlo Asuncion expressed hope that the government would further boost public spending.
“With the recent spike in infections and the question of whether to lockdown further due to the rise of cases, there is more pressure to ramp up spending to prevent the economy from further lagging behind,” Asuncion said.
Public expenditures would need to catch up to aid economic recovery, he added.
