THE national government ran a P786.8-billion fiscal deficit in the first half of the year, slightly lower than the target, although fiscal space is becoming ‘increasingly constrained.’
The budget hole widened by 2.79 percent to P786.8 billion from January to June, from P765.5 billion in the same period a year ago, the Bureau of the Treasury reported on Thursday.
Revenue collections reached P2.388 trillion in the first half, while spending on infrastructure, food security and support for local governments pushed expenditures to P3.175 trillion.
Treasury data showed that revenue collections went up by 5.67 percent year-on-year from P2.260 trillion, though 0.01 percent below the P2.389 trillion mid-year target.
Tax revenues rose by 5.38 percent to P2.142 trillion from P2.032 trillion last year. However, this fell short of the P2.158 trillion program by 0.77 percent, or P16.6 billion.
This came after the Bureau of Internal Revenue (BIR) missed its P1.654-trillion target, collecting P1.631 trillion in the first half. Still, this represented growth of 4.96 percent from the P1.554 trillion in the same period a year earlier.
The Treasury said the improvement in collections was driven by higher collections from corporate income tax, personal income tax, value-added tax (VAT), other percentage taxes and miscellaneous taxes.
Meanwhile, the Bureau of Customs (BOC) exceeded its P484.8-billion target by 1.45 percent after collecting P491.9 billion in customs duties and taxes. This was also 7.21 percent higher than the P458.8 billion it collected in the comparable period last year.
Higher oil prices benefited the BOC, as its VAT collections jumped by 10.34 percent, the Treasury said. This offset the 2.73-percent dip in excise tax collections due to lower oil import volumes and the temporary suspension of excise tax on liquefied petroleum gas and kerosene.
‘Revenue growth continued to be driven by tax collections, although BIR collections reflected the impact of softer domestic economic activity,’ Chinabank Chief Economist Domini S.D. Velasquez said.
‘This was more than offset by stronger BOC collections, supported by higher oil prices, a weaker peso, and the resulting increase in import VAT collections,’ Velasquez added.
Non-tax revenue collections also increased by 8.26 percent year on year to P246.5 billion and surpassed the P230.2-billion midyear target by 7.09 percent on the back of better-than-expected Treasury income. Treasury income registered a 25.79-percent increase in the first half, rising to P182.7 billion from P145.3 billion in the same period last year.
‘The Department of Finance remains confident in the abilities of the revenue-generating agencies to meet their targets in the second half of the year,’ Finance Secretary Frederick D. Go said.
Govt spending
Treasury income registered a 25.79-percent increase in the first half, rising to P182.7 billion from P145.3 billion in the same period last year.
‘The Department of Finance remains confident in the abilities of the revenue-generating agencies to meet their targets in the second half of the year,’ Finance Secretary Frederick D. Go said.
Govt spending
Year-to-date expenditures grew by 4.94 percent to P3.175 trillion from P3.026 trillion in the comparable period last year and were slightly below the P3.177-trillion spending program.
Interest payments climbed by 16.60 percent year on year to P483.7 billion in the first half from P414.8 billion. This was also 1.58 percent below the P491.5-billion program.
Primary expenditures, meanwhile, rose by 3.09 percent to P2.691 trillion from P2.611 trillion last year and exceeded the P2.685-trillion program.
‘The government still has room to continue pump-priming the economy in the second half of the year while remaining within its fiscal targets,’ Velasquez said.
‘That said, fiscal space is becoming increasingly constrained. As such, we expect public spending to be focused on high-multiplier investments, particularly infrastructure and labor-generating projects, which are likely to provide the greatest boost to growth while preserving fiscal sustainability,’ she added.