MANILA – The Philippines posted a budget deficit of P121.2 billion in July bringing the total budget gap from January to July to P837.3 billion, the Bureau of Treasury said on Tuesday.
Treasury noted that last month’s budget deficit was lower by 13.57 percent compared to P140.2 billion booked in July last year. The agency credited this to 9.21 percent growth in revenue collection alongside a 0.69 percent modest increase in government expenditures.
Despite the improvement in July, the total budget gap for the first 7 months of 2021 was still 19.5 percent higher than the P700.6 billion booked in the same period last year.
Treasury added that the deficit-to-GDP ratio for the first semester rose to 7.86 percent from last year’s level of 6.53 percent as expenditure growth outpaced revenue collection over the period.
“This is reflected in the higher expenditure effort of 24.21 percent compared to 23.47 percent for the same period in 2020 while revenue effort moderated to 16.35 percent from 16.94 percent due to the high base effect of dividend remittances last year.”
The Philippines has been borrowing heavily to finance its COVID-19 response and the Build, Build, Build program.
At the end of June, the country’s debt hit almost P11.17 trillion. Government economic managers however maintain that debt levels remain manageable.
Earlier this year, Finance Secretary Carlos Dominguez said the debt-to-GDP ratio is expected to settle at 57 percent this year, which is still within a “sustainable threshold”.
The Bangko Sentral ng Pilipinas also said the Philippines' debt situation is under control and the country will not exceed its borrowing threshold.