The budget deficit narrows in February

Those of the NATIONAL Government Budget enficit narrowed to 105.8 billion pesos in February as spending and revenue slumped, the Bureau of the Treasury (BTr) reported.

BTR’s cash operations report showed that the fiscal gap fell by 8.77% in February, compared to Ptas 116 billion in the same month in 2021.

month after month, the fiScale gap widened to 23.4 billion pesetasficit in January.

In February, government spending was P318.2 billion, down 5.16% from P335.5 billion in the same month in 2021, when the government injected P45 billion in equity fiFinancial Institutions (GFIs) has been completed.

Excluding the equity infusion, BTr said spending was up 9.64% year-on-year, “largely attributed to the National Tax Allocation (NTA) from Local Government Units (LGUs), spending on the various Department of Education (DepEd) programs, Electoral Commission (Comelec) and vaccine against COVID-19 (coronavirus disease 2019). fiFunding under the Department of Health (DoH).”

Beginning this year, LGUs will receive a larger share of tax collection from the NTA, in addition to the transfer of basic utility services.

Interest payments also fell 9.42% to P28.2 billion. Primary expenditure, or expenditure excluding interest payments, fell 4.73% to P290 billion.

Meanwhile, revenue collection in February shrank 3.26% year-on-year to P212.40 billion as tax revenue fell 2.69% to P197.8 billion and non-tax revenue fell 10.37% to P14.6 billion. P declined.

Bureau of Internal Revenue (BIR) revenue for the month fell 11.38% to P136.6 billion, while the Bureau of Customs (BoC) saw revenue rise 25.96% to P59.4 billion P listed.

The BTr attributed the BoC’s February performance to “an improved valuation and continued intensity”.fied collection eonwardsplaces.”

The Treasury reported income of P4.22 billion, down 7.37% year-on-year, due to lower dividend remittances from state-owned enterprises, guarantee fees and national government deposit receipts.

TWO-MONTH PERFORMANCE
In the first two months of 2022, the budget deficit narrowed slightly to P129.2 billion from P130 billion a year ago.

Total receipts rose 2.12% to 490.5 billion pesos, slightly outperforming expenditure growth of 1.53%.

At the end of February, tax revenue rose 4.32% to P453.1 billion, thanks to a 24.69% increase in BoC revenue to P117.8 billion. BIR collections were down 1.16% to 332 .4 billion pesos back.

Tax-free income fell 18.71% to Ptas 37.4 billion as BTr income fell 35% to Ptas 15.1 billion on lower dividends on government-held shares.

Year-to-date spending fell 1.53% to P619.7 billion, while interest payments rose 19.94% to P93.8 billion.

“Unless tax collection can pick up significantly, we may have to expect further deterioration in both the country’s deficit and overall debt,” Nicholas Antonio T. Mapa, senior economist at ING Bank NV Manila, said in a Viber message.

Mr Mapa said a slowdown in spending is likely to be seen ahead of the May elections “given the ban on hiring and investment during the campaign season”.

“This comes in addition to the reluctance of offito spend cials to limit the hit on the deficit and total debt. However, the need to support the economy through subsidies is being pushed fiGetting managers to raise additional expenses to help Filipinos during such challenging times,” he said.

The public works voting ban began on March 25 and will run until May 8. The law, which also bans welfare payments, aims to prevent politicians from using state funds for their election campaigns.

Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said tax collection could improve over the next few months due to looser mobility restrictions, reduced spending to respond to the pandemic and increased business activity.

“Therefore, these measures would help constrain the country’s budgetficit and also help curb government debt growth,” he said of Viber.

UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion said the decline in spending may be due to the “ongoing ‘normalization’ of spending due to the unusual nature of spending due to the government’s pandemic response, and this will be observed as the country emerges from the pandemic crisis.”

The government has set a budgetficit cap of 1.65 trillion pesos for 2022, equivalent to 7.7% of gross domestic product.

The government is in deficit when it spends more than it earns to fund programs that support economic growth. It borrows from foreign and local sources to fill the gap. — TJTomas