Fiscal deficit widens by 167% to P30.5B in May

The national government’s fiscal deficit in May ballooned by more than 167 percent year-on-year on higher government spending, the Bureau of Treasury said Tuesday. The fiscal gap widened to P30.5 billion last month from P11.4 billion a year earlier. Government spending rose 21.3 percent to P140.2 billion year-on-year, Treasury said. The deficit last month brought to P162.1 billion the fiscal gap in the first five months, surpassing the deficit ceiling of P145.2 billion for the first half. “Despite the higher-than-programmed budget deficit in the first five months, we believe that we could still keep our revised budget deficit target of P300 billion for the whole year," Treasury said in a statement. The government’s annual shortfall target for the year is P293.2 billion. Government would likely breach the first half deficit ceiling of P145.2 billion by P33.3 billion at the end of June, “but this could be offset by the projected P30 billion in revenues from privatization which could come in the second half of the year." Revenues last month amounted to P109.7 billion or 5.3 percent more than the year-earlier total. Of these, the Internal Revenue bureau collected P79 billion, 7.8 percent higher year-on-year despite a decline in non-cash collections by more than half. The Bureau of Customs collected P24.1 billion, more than a fifth higher than the year earlier figures. Treasury's income, however, slid by 26.1 percent to P2.6 billion. Other government offices likewise posted a 47.7-percent drop in revenues to P4 billion. Total revenues from January to May this year reached P500 billion, or higher by almost a tenth year-on-year. The BIR collected P344.1 billion, the BOC generated P107.5 billion, and Treasury pitched in P21.5 billion. Other offices posted P27 billion. Total expenditures, meanwhile, amounted to P662.1 billion, up by 14.3 percent year-on-year. “We hope that the incoming government will seriously look into our proposed revenue-enhancement measures to replace what we’ve lost from the revenue-eroding measures passed by Congress, which could help in our fiscal consolidation objective," Treasury said. “We believe that it is only through higher revenues, and not reduction in expenditures, that we can achieve higher and sustainable growth, and improve the quality of life of our people." Among the proposed tax measures is an increase in the Expanded Value Added Tax (E-VAT) from 12 percent to 15 percent, at 1-percent increases per year. Finance Secretary Margarito Teves said that once the E-VAT is in place the government expects to generate P11 billion to P30 billion in additional revenues in the first year, P30 billion to P33 billion in the second year, and P40 billion to P50 billion in the third year. —VS, GMANews.TV