MANILA (UPDATE) – Government spending fell by 15 percent in July, despite higher tax collections, data from the Department of Finance (DOF) showed.
The DOF said government spending fell 15 percent to P168.5 billion in July, while revenue collections jumped 15 percent to P166.7 billion.
The national government's budget deficit narrowed to P1.8 billion in July, 97 percent lower than a year ago.
This brought the cumulative budget shortfall to P55.7 billion for the first seven months of 2014 compared to P104.5 billion in 2013. The January to July gap represents 21 percent of the target for 2014.
For the 7-month period, total revenue collections went up 12 percent to P1.10 trillion.
On the other hand, national government disbursements for the January to July period stood at P1.16 trillion, 6 percent higher than the same period a year ago.
"In the first semester of the year, we have recorded a tax effort of 13.7% and a revenue effort of 15.6%, higher than last year’s comparable figures of 13.6% and 15.3%, respectively. For the first six months of 2014 revenues expanded at 11.2% year-on-year, higher than the 9.2% growth in nominal GDP in the same period. We have maintained this trend of faster revenue growth than nominal GDP growth since 2011," Finance Secretary Cesar Purisima said.
Meanwhile, Budget Secretary Butch Abad blamed the drop in spending to the lingering effects of typhoon “Yolanda” and the Supreme Court rulings declaring the Priority Development Assistance Fund (PDAF) and several acts on the Disbursement Acceleration Program (DAP) unconstitutional.
“After Yolanda and the PDAF/DAP rulings, disbursements have been erratic. Some also due to problems common to agencies (e.g. low obligation rate, poor execution), others are peculiar to agencies,” he said.
Abad earlier said that the DAP funds were realigned savings meant to spur government spending.