The government incurred a budget deficit of P140.2 billion in July, up by 86.21 percent from the P75.3-billion shortfall a year ago, as expenditures increased 10.4 percent and revenue collection dropped 11.2 percent during the months, the Treasury said Wednesday.
“The higher deficit for the month reflects the 10.40-percent growth in government expenditures, boosted by the implementation of various COVID-19 rehabilitation and recovery measures vis-à-vis an 11.22-percent drop in revenue collection,” the Treasury said in a statement.
The July budget deficit was a reversal of the P1.8-billion surplus registered in June 2020 when revenue collections outpaced expenditures.
Data showed that the strong public spending in July pushed the budget deficit in the first seven months to P700.6 billion, or almost six times the P117.9-billion shortfall incurred as of end-July 2019.
Government revenues decreased by 11.22 percent in July to P234.5 billion from P264.1 billion a year earlier because of the adverse impact of the health crisis on economic activity. This brought total collection in the first seven months to P1.687 trillion, also down by 6.84 percent from P1.811 trillion in the same period last year.
The Bureau of Internal Revenue’s collections for the month went down by 11.84 percent to P159 billion (after deducting the P1.6-billion tax refund paid to various claimants) from last year’s level. The agency’s cumulative collection in the seven-month period also went down by 10.53 percent to P1.115 trillion.
Customs collections reached P49.8 billion, net of P98 million tax refund, in July, down by 8.84 percent from P54.6 billion recorded a year ago, weighed down by disruptions to trade amid the border lockdown. This trimmed BOC’s aggregate collection as of end-July to P302.9 billion from the prior year’s P357.7 billion.
Income generated and collected by the Bureau of the Treasury amounted to P7.6 billion in July, 46.74 percent lower than a year ago, because of the early remittance of dividends this year and reduced government share from Philippine Amusement and Gaming Corp. and interest earned from government deposits.
The Treasury’s total revenue in the seven-month period, however, grew by 87.16 percent to P190.9 billion and exceeded the original full-year target of P82.3 billion.
The P14.6 billion collections from other offices (other non-tax including privatization proceeds and fees and charges) went up by 12.43 percent over last year partly because of the P4.3-billion concession fees paid by the MPCALA Holdings Inc. in connection with the Cavite-Laguna Expressway project.
Government spending climbed 10.4 percent in July to P374.7 billion from a year ago, driven by the second tranche of releases for the Social Amelioration Program in line with the implementation of Republic Act No. 11469 or the Bayanihan to Heal as One Act and other COVID-19-related expenditures.
The cumulative spending of P2.388 trillion from January to July posted a digit-growth of 23.78 percent from the same period last year.