September budget deficit narrows on weak revenues, spending

MANILA - The national government's budget deficit narrowed in September from its year ago figure, as spending dipped together with revenue collections. 

The September budget deficit was at P138.5 billion or 22.42 percent lower compared with the P178.6 billion posted over the same period last year. 

January to September budget gap however widened to P879.2 billion, "almost three times" higher than the shortfall from a year ago but 32.3 percent below the revised program of P1.298 trillion for the period, it said.

"The budget gap narrowed as the 10.19 percent year-over-year decline in revenue collections was matched by a 15.45 percent dip in public spending," the Bureau of Treasury said in a statement released Friday. 

Government collections dropped by 10.19 percent year-on-year in September to P212.4 billion, bulk of which were from tax sources.

"The resulting cumulative collections for the nine-month period also decreased to P2.143 trillion, 7.92 percent lower than the 2019 comparable revenue, but 8.8 percent above the P1.970 trillion revised target. To date, 85 percent of the P2.520 trillion full-year program has been collected," it said.

Collections by the Bureau of Internal Revenue (BIR) dropped 6.56 percent, while the Bureau of Customs (BOC) revenue performance was lower by 13.69 percent for the month.

Income from the Bureau of the Treasury also declined by 19.35 percent. 

Expenditures for September declined by 15.45 percent to P350.9 billion due to the timing of subsidy releases and the base effect of higher infrastructure spending in the same month last year. 

Despite this it said, year to date spending still achieved a 15.07 percent growth, boosted by COVID-19 related expenditures but was still 7.53 percent lower than the revised program of P3.269 trillion. 

"The lag is attributed mainly to measures under RA No. 11494 or the “Bayanihan to Recover as One Act” which are still to be implemented following the approval of the law last September 11, 2020," it said.

• PH budget deficit widens in August as pandemic drags revenues

"The expectation is that government would fast track spending but September figures were low. The other side of this is that it highlights the government's fiscal prudence and spend on just what's really needed," said Jonas Ravelas, chief market strategist at BDO.

The Philippines crash landed into recession after the second quarter gross domestic product dived 16.5 percent due to the pandemic and resulting lockdowns which started in March. 

Metro Manila and other areas remain under general community quarantine (GCQ) until end-October.