After hearing much criticism for its underspending in recent months, the national government posted a budget deficit in June, reversing surplus from May by boosting its operational expenses, the Department of Finance said in a report on Thursday.
DoF data for June showed a budget deficit of P72.7 billion, which reversed a surplus of P67.3 billion recorded in May and widened the gap from a P62.5 billion deficit a year earlier by 16 percent.
The June deficit also exceeded the government’s P29.21 billion deficit target for the month by 149 percent. Disbursements reached P236.2 billion against total revenues of P163.6 billion.
“This reflects the government’s continued commitment to accelerate the use our ample
fiscal space for critical investments to our economy and people,” Finance Secretary Cesar Purisima said.
In previous months, the government had been criticized for underspending, which led to a widening in the surplus for May by 472 percent to P67.3 billion from P11.8 billion a year earlier.
Expenditure up 17%, revenue up 18%
The Finance department said disbursements by the national government for June expanded by 17 percent over the year-earlier level.
“We are seeing a strong showing on the expenditure side as well, with the 17 percent growth posted this month being a high water mark for the year,” Purisima said.
Operating expenses jumped 20 percent to P217 billion from P181 billion posted in June 2014.
Interest payments dropped by 2 percent to a total P19.2 billion from the P19.6 billion a year earlier.
Meanwhile, total revenues for the month rose 18 percent year-on-year to P163.6 billion.
The Bureau of Internal Revenue (BIR) collected P109.6 billion in June, up 16 percent year-on-year, while the Bureau of Customs (BOC) generated P31.5 billion, higher by 15 percent. The Bureau of the Treasury, however, posted a 6 percent decline in its collections to P6.6 billion.
Budget and Management Secretary Florencio Abad attributed the uptick in government spending to recent reform in the budget process.
“I think the reason for that uptick is the combination of some of the programs that matured this quarter and also the measures adopted upon the very strong instructions coming from the President [Benigno Aquino 3rd] to set up delivery units to monitor and submit it [reports on the implementation of those reform measures]on the seventh day of the month,” he said.
“We have been working closely with the agencies in the faster movement of the execution of the programs,” he added.
For the first half of 2015, the government also reversed its year-earlier deficit of P54 billion to a surplus of P13.7 billion for this year so far.
Total revenues for the six-month period this year breached the trillion-peso mark at P1.085 trillion, growing by 16 percent from the year-ago level.
“As we close out the first half of the year, we continue to see robust growth trends across the board–be it from the revenue generating agencies or the expenditure side. June shaped up to be a good month for our fiscal story as performance at the BIR and the BOC jumped by double-digits,” Purisima said.
Expenditure also breached the trillion-peso mark at P1.072 trillion, reflecting an increase of 9 percent from a year earlier.
In the year-to-date, interest payments amounted to P156.1 billion, down 2 percent year-on-year and 9 percent below programmed levels.
Primary, excluding debts
In primary terms, which exclude interest payments on foreign and domestic debt issues, the government recorded a deficit of P53.5 billion in June, swelling by 25 percent from a P42.9 billion deficit registered a year earlier, the DOF data showed.
For the year-to-date, the primary balance stood at a surplus of P169.9 billion, higher by 61 percent than the P105.8 billion posted a year earlier.
“The Philippines will continue to keep its fiscal house in excellent health as it weathers the turbulence in the global economy caused by a number of recent developments,” Purisima said.
Pumping productive spending with adequate fiscal space is expected to help propel even higher broad-based growth, the DOF chief said, adding that the government is confident that improving revenue collections and the highly liquid tone of the market can respond to the country’s funding requirements, he added.
“Wider fiscal latitude and strong macroeconomic fundamentals make the Philippines a picture of stability and a standout in the league of emerging markets. We vow to protect the enviable position we have secured for our people,” he concluded.