The national government’s fiscal position remained in deficit in July but narrowed significantly from a year earlier, the Department of Finance (DOF) said Friday.
The deficit in July stood at P1.8 billion, 97 percent lower than the P53.2 billion in the same period last year, thanks to improved collection efforts by the various state agencies, according to data just released by the Bureau of the Treasury and the DOF.
In the year-to-date, the government’s fiscal performance in July resulted in a lower cumulative budget shortfall of P55.7 billion for the first seven months of 2014, compared with P104.5 billion in 2013.
The government also provides statistics on the primary budget—which exclude interest payments on foreign and domestic debt issues recorded during the month—as an indicator of management of expenditures apart from debt servicing. Based on such primary figures, the government had a P46.5 billion primary surplus for the month of July. In the year-to-date, cumulative primary surplus stood at P152.2 billion, or P46.1 billion higher than its level over the same period in 2013
Total revenues for the month amounted to P166.7 billion, registering growth of 15 percent over the same month last year as revenue generating agencies ramped up collection efforts, the DOF said.
The Finance agency said the Bureau of Internal Revenue exceeded its target for the month, raking in P119.9 billion, reflecting year-on-year growth of 19.8 percent. The Bureau of Customs recorded double-digit growth for the seventh month in a row as it collected P30.5 billion in July, higher than last July’s figures by 10.1 percent.
Meanwhile, the Bureau of Treasury income for July amounted to P7.5 billion, exceeding its target by 22 percent.
“This encouraging news of higher growth in revenues and in GDP [gross domestic product]comes after the latest domestic liability management transaction of the Bureau of Treasury and the signing of a grant agreement with the European Union for health sector reform,” Finance Secretary Cesar Purisima said.
Disbursements reached P168.5 billion in July, 15 percent or P29.4 billion lower than comparable figures last year due to smaller interest payments, the agency said.
Interest payments for July declined by 10 percent year-on-year to P48.2 billion from P53.5 billion in 2013 as both domestic and foreign interest payments have been reduced, the Finance agency said.
As a percentage of expenditures, interest payments continued to decline—in the first seven months of 2014, interest payments represented 18 percent of expenditures, slightly lower than the 19.4 percent in the same period a year ago.
“These recent developments are testament that our thrust of good governance continues to be fundamental to creating a virtuous cycle of growth and investment in social services and improving the lives of Filipinos. However, our work here is not done,” Purisima said.
“I see the remaining years of this administration as the pivotal moment to institutionalize reform and to augment productive investments. We will use this time to push for legislative reforms, raise revenues, and manage our debt to effectively support the government’s key priorities,” he added.
For this year, the government has set a cap on the budget deficit at 2 percent of GDP, or P266 billion.