The national government’s (NG) faster spending outpaced its revenue performance, allowing it to incur a wider deficit for the month of August 2021, the Bureau of Treasury (BTr) said in its latest report.
Data from the BTr showed the latest budget deficit of P120.9 billion surpassed the recorded P40.1 billion in August 2020 by thrice owing to the 34.2 percent acceleration in public spending while revenue only grew by 6.59 percent.
On a cumulative basis, the NG incurred a total budget deficit of P958.2 billion, 29.36 percent higher than the P740.7 billion budget gap in 2020.
NG spending in August 2021 of P380.2 billion was 34.2 percent higher than the P283.3 billion in the same month year-ago owing primarily to the releases of various COVID-19 funding requirements such as the subsidy releases to PhilHealth.
For the first seven months of the year, total government spending of P2.96 trillion was 10.94 percent higher than the P2.67 trillion in the same period in 2020.
Interest payments (IP) of P23.9 billion during the month brought year-to-date IP to P291.5 billion, an 8.12 percent uptrend from the P269.6 billion in the same period last year.
On the other hand, NG revenues in August of P259.3 billion pushed year-to-date level to P2.01 trillion, bulk or 90 percent of which came from tax sources while non-tax income comprised the remaining 10 percent.
Still, the latest income level represented 70 percent of the government’s revised P2.88 trillion goal for the year.
Michael Ricafort, chief economist at the Rizal Commercial Banking Corp. said the timely approval of the 2021 budget will help boost NG spending, particularly for its infrastructure development for the year.
Ricafort likewise stressed the passage of the remaining economic reform bills in addition to further monetary easing measures will help attract loan demand and investments as well as employment and other business activities.