MANILA, Philippines – The Philippines’ fiscal deficit narrowed slightly to P129.2 billion at the end of February due to lack of major spending unlike last year when the national government shelled out more to fight COVID -19 at the start of the second year of the pandemic.
The latest report on cash operations from the Bureau of the Treasury (BTr) showed that the cumulative budget deficit for the first two months was 0.7% lower than the 130 billion pesos recorded in 2021.
From January to February, the government spent 619.7 billion pesos on public goods and services, up 1.5 percent from 610.3 billion pesos last year.
Tax and non-tax revenue increased by 2.1% to reach 490.5 billion pesos against 480.3 billion pesos in 2021.
Tax revenue from the Bureau of Internal Revenue (BIR) at the end of February fell 1.2% year-on-year to 332.4 billion pesos, while import duties and other taxes collected by the Bureau of Customs (BOC ) increased by 24.7% to reach 117.8 billion pesos. during the two month period.
In February alone, the national government budget deficit narrowed faster by 8.8 percent to 105.8 billion pesos from 116 billion pesos last year.
The 5.2% drop in year-on-year spending to 318.2 billion pesos outpaced the 3.3% drop in revenue to 212.4 billion pesos in February.
In a statement, the BTr attributed the decline in disbursements last month in 2021 to the equity injection of 45 billion pesos to government financial institutions (GFIs) as mandated by the Bayanihan to recover in one act (Bayanihan law 2) for the response to the pandemic.
Net of one-time equity support from GFI last year, spending deemed productive or supportive of economic growth rose 9.6% year-on-year, BTr said.
Among the programs and projects rolled out in February were those of the Department of Education (DepEd), the Electoral Commission (Comelec) ahead of the May 9 national elections, and funding for the COVID-19 vaccine from the Department of Health (DOH). ).
The larger National Tax Allocation (NTA) from local government units (LGUs) also boosted government spending in February, the BTr added.
BIR’s tax collection in February fell 11.4 percent year-on-year to 136.6 billion pesos. On the other hand, BOC collections jumped 25.9 percent to 59.4 billion pesos last month.
This year, the national government was expected to suffer a budget deficit of 1.65 trillion pesos, equivalent to 7.7% of gross domestic product (GDP). The government was expected to raise more than P3.3 trillion in revenue this year to partially finance its planned expenditure of P4.95 trillion. The deficit will also be financed by 2.2 trillion pesos of gross borrowing in 2022.
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