National Government (NG) Budget deficit surges The Treasury Department (BTR) said Thursday that it had a P241.6 billion in June as state spending outweighed revenue.
According to the Ministry of Finance, the Philippines’ budget deficit increased by 15.56% from 200.9 billion shares in the same period in June to 241.6 billion.
In the month, the budget deficit in May rose 66.46% from pesos 145.2 billion.
In June, state spending jumped from Filipino pesos 50.6 billion in June 2024 to Filipino pesos 548.5 billion.
BTR attributes faster spending to higher state tax distribution stocks in local government departments, annual block grants, personnel services and interest payments in the Muslim state of Mindanao.
Primary expenditure (referring to total expenditure minus interest expenditure) rose 9.14% to Pesos 49.1 billion a year ago. This accounted for 89.53% of total spending in June.
Interest payments in June this year increased by 3.19% from P55.6 billion in the same month in 2024 to reach P57.4 billion.
NG’s main deficit was 184.2 billion pesos in June, up 20.04% from the 15.4 billion pesos in the same month last year.
Meanwhile, revenue in June increased by 3.5% to 306.9 billion from pesos 296.5 million in the same period last year.
“The continued double-digit growth in taxation offsets the high-base effect of next one-time remittances for non-Next revenue last year,” BTR said.
Tax revenue in June increased by 12.35% from P24.3 billion in the same month in 2024 to P280.1 billion.
The batch comes from the Bureau of Internal Revenue (BIR), which collected pesos 200.5 billion in June, an increase of 16.24% from Phillipino Pesos 172.5 billion a year ago.
The BOC’s collection volume rose 3.23% to Pesos 77 billion, while othersfICES revenue rose 16.71% to pesos 2.6 billion.
On the other hand, Fennex’s revenue fell 43.25% year-on-year to Phillips 26.8 billion in June “due to the high basic effect of one-time remittances in 2024.”
BTR’s revenue soared from 7.4 billion to 16.49% a year ago to 16.1 billion to 16.1 billion, thanks to NG’s larger share of profits in the Philippines’ entertainment and gaming companies and dividend remittances from the power sector asset and liability management companies.
Revenue from other offices also fell 73.04% to pesos 100 billion in June.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the budget deficit in June was the widest in three months since March.
“From a cash flow perspective, the budget deficit may increase the demand for additional borrowing,” he said.
First half gap
In the first six months of this year, the NG budget deficit rose 24.69% from last year’s P613.9 billion ticket gap to Pes 765.5 billion.
BTR said the budget deficit is still in the relative range because the first half of the year was P760.7 billion.
The income from revenue in the first half of the year increased by 5.15% from P2.15 trillion p2.15 trillion p2.26 trillion population in the same period in 2024. This is compared with the six-month P2.28 trillion P2.28 trillion.
As of the end of June, tax revenue increased by 10.74% to P2.03 trillion P2.03 trillion, up from P2.06 trillion P2.06.
As of June, BIR collections increased by 14.11% to P1.5.55 trillion, mainly due to increased corporate income tax, VAT and personal income tax. However, that’s 1.52% lower than the P1.58 billion miles plan.
“Through the Bureau continues its efforts to strengthen the crackdown on illegal tobacco trade and strict implementation of mandatory excise tax stocks for vapor products, more sources of income come from the increase in the consumption tax collection of tobacco, including electronic cigarettes,” it said.
The higher tax percentage of banks and financial institutions also helps increase BIR income.
As of June, the collection rate of BOC rose 0.71% to P45,888 crore, but the plan for P4.614 crore accounted for 0.58%.
During the January-June period, Fennex’s revenue fell 27.53% to P227.7 billion. Of BTR’s revenue, it exceeds PROPAR program 221.4 billion.
In the first half of the year, fiscal revenue fell 11.37% to pesos 145.3 billion in the first half of the yearfICES revenue fell 45.14% to Pesos 82.5 billion.
Meanwhile, as of the end of June, state spending rose from P2.76 trillion p2.76 trillion a year ago to P3.03 trillion p3.03 trillion. During this period, it was only 0.51% higher than the 3.04 billion miles of spending plan.
As of June, primary spending rose 9.41% to 22.61 trillion, while interest payments rose 9.97% to 414.8 billion pesos.
In the first half of the year, NG’s major deficit increased by 48.16% to P350.7 billion. It exceeded 2.04% of the first half of the PPE 343.7 billion.
Oikonomia Advisory and Research, Inc. “Despite the increase in interest payments, most of the deficit growth may be attributed to higher spending due to government programs and payments to local government departments,” said Reinielle Matt M. Erece, an economist.
“The budget deficit is still manageable because the income from revenue is still strong and the debt obligations are growing moderately. As long as each expenditure increases productivity, the deficit can still be managed.”
For this year, the upper limit of NG’s deficit is P1.56 trillion, accounting for 5.5% of GDP. – Aubrey Rose A. Inosante
