August 28, 2024 | 12:00am
MANILA, Philippines — The government recorded a high budget deficit of P643 billion from January to July even after the growth in revenue collections outpaced the expansion of state spending.
During the Senate committee on finance hearing yesterday, Finance Secretary Ralph Recto said the government incurred a higher budget shortfall of P642.8 billion in the seven-month period, 7.2 percent higher than the P599.5 billion in the same period last year.
A budget deficit means that the government is spending beyond what it earned from revenue collections and at a slightly faster pace.
Data showed that total revenue collection as of end-July rose by nearly 15 percent to P2.61 trillion as against the P2.27 trillion in the same period last year, as both tax and non-tax revenues increased.
The bulk or 86 percent of the revenues came from tax collections at P2.24 trillion, rising by 11 percent from a year ago. Non-tax collections, on the other hand, soared by 45 percent to P368.8 billion, largely from dividends from government-owned or controlled corporations.
The Bureau of Internal Revenue (BIR)’s haul climbed by nearly 13 percent to P1.68 trillion while the Bureau of Customs (BOC) saw its collections grow by almost six percent to P535.9 billion.
Income generated by the Treasury went up by 28 percent to P183.8 billion while collections from other offices including privatization proceeds and fees and charges for the period rose by 66 percent to P185 billion.
Recto said the government is on track to meeting its fiscal program for the year with the performances of the BIR, BOC, Treasury and state-run corporations.
“We credit this feat to the BIR and BOC’s digitalization strategies and the collaboration with allied agencies to kick our revenue operations into high gear,” Recto said.
As the government ramps up its revenue collection strategies, it is projecting a 10.3 percent average annual growth over the medium term.
As such, revenues as a percentage of gross domestic product are seen to increase from 16 percent this year to 17 percent by the end of the administration in 2028.
On the other hand, government spending in the seven-month period rose by 13.2 percent to P3.25 trillion.
During the Senate hearing, the Department of Finance (DOF) also presented its P33.75-billion proposed budget for 2025, up by 21 percent from this year’s allocation of P27.94 billion.
Under the proposed budget, DOF’s new general appropriations constitute the largest portion amounting to P29 billion to support its core operations and priority programs.
This is in line with the DOF’s key priorities to ramp up digitalization to enhance revenue administration by the BIR and BOC, better financial asset and debt management by the Treasury and improved local finance administration by the Bureau of Local Government Finance.
About 41.4 percent of the proposed budget is allocated to personnel services, 37.9 percent to maintenance and other operating expenses and 20.6 percent to capital outlays.
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