The government incurred a budget deficit of P202.1 billion in May as state spending continued to swell amid smaller revenues, the Bureau of the Treasury (BTr) reported on Tuesday.
The gap was smaller than the P273.88-billion shorfall in April and reversed the P2.6-billion surplus a year ago.
In a statement, the Treasury bureau said that despite the diminished revenue collection caused by the ongoing Covid-19 (coronavirus disease 2019) pandemic, “government disbursements continued to gain traction.”
State revenues fell to P151.5 billion last month from the year-earlier P317.2 billion, while expenditures climbed to P353.6 billion from P314.7 billion in the same month in 2019.
Revenues shrank by 39.17 percent, while expenditures expanded by 108.14 percent a month earlier.
May’s deficit boosted the year-to-date gap to P562.2 billion, wider than the P809 million in the first five months of 2019.
For May alone, the Bureau of Internal Revenue contributed the bulk of revenues at P114.4 billion, down 44.13 percent from P204.8 billion a year ago. The decline was smaller than April’s 61.65-percent decrease.
“The agency’s weak performance was still due to the effect of the prolonged enhanced community quarantine (ECQ), which prompted the bureau to further extend its deadline for tax filing and payments to June 14, 2020,” the BTr explained.
The Bureau of Customs recorded P30.8 billion, slipping by 47.12 percent from P58.2 billion a year ago, which the Treasury also attributed to the economic restrictions the pandemic caused.
Other offices did not raise any tax revenue in May. As a result, total tax revenues sank by 45.34 percent to P145.2 billion, slower than the 56.74-percent drop in March.
Nontax earnings settled at P6.3 billion with the Treasury bureau contributing P2.4 billion, down 93.30 percent year-on-year. Although the dividends were remitted in May 2019, these were only received earlier this year because of the implementation of Republic Act (RA) 11469 or the “Bayanihan to Heal as One Act.”
Revenue from other offices hit P3.9 billion, a 75.50-percent fall from the previous year’s P16.0 billion. This was blamed on the EQC, which affected the operations of various state revenue-collecting agencies.
On the overall expenditure in May, the Treasury explained the “acceleration was propelled by the releases for the second tranche of the Small Business Wage Subsidy under the SSS (Social Security System) in line with the implementation of RA 11469.”
The bulk of government spending — P335.3 billion — was for primary expenditures, which grew by 13.65 percent from P295 billion a year ago. Interest payments totaling P18.4 billion accounted for the rest. This figure was a 6.69-percent dip year-on-year “due to domestic debt that matured last year. .”
Netting out interest payments, the primary balance hit a fiscal deficit of P183.8 billion in May, bringing the year-to-date tally to a P402.1-billion gap.
This year’s budget deficit is projected to reach P1.56 trillion, or 8.1 percent of the country’s gross domestic product (GDP), according to latest estimates from the inter-agency Development Budget Coordination Committee. This is 2.8 percentage points higher than the 5.3 percent of GDP forecast in March.