The Philippine government’s budget deficit widened sharply in July as spending surged to support major programs and infrastructure projects, outpacing a modest increase in revenues.
The National Government recorded a P106.3 billion budget gap in July, more than five times the P18.9 billion deficit a year earlier, according to the Bureau of the Treasury. The July shortfall pushed the year-to-date deficit to P893.1 billion, up 13.85 percent from P784.4 billion in the same period last year.
Government revenues reached P482.3 billion in July, up just 2.12 percent from P472.3 billion a year earlier. Tax collections provided the lift, rising 7.02 percent to P452.7 billion, but this was largely offset by a 39.92 percent plunge in non-tax revenues to P29.6 billion.
The decline in non-tax collections was mainly due to the timing of dividend remittances from the Bangko Sentral ng Pilipinas. For the first seven months, however, total revenues climbed 5.05 percent to P2.87 trillion.
The spending side was considerably busier. National Government expenditures jumped 19.82 percent to P588.6 billion in July, fueled by social assistance under the Unified Package for Livelihood, Industry, Food, and Transport, military modernization projects, and foreign-assisted rail projects.
The Bureau of Internal Revenue collected P358.4 billion during the month, up 6.9 percent from a year earlier, while the Bureau of Customs raised P91.6 billion, an increase of 7.48 percent.
Interest payments also added weight to the fiscal burden, rising 29.14 percent to P137.2 billion in July. For January to July, interest payments reached P620.9 billion, up from P521 billion a year earlier.
Excluding interest costs, the government still posted a P30.9 billion primary surplus in July, although this was sharply lower than the P87.3 billion surplus recorded a year earlier.
The numbers underline a familiar fiscal balancing act: revenues are growing, but spending is growing faster. And when the government opens its purse strings for programs, projects, and debt service, the deficit can widen quickly.
