Gov't coffers felt pinch of COVID-19 in February
By CHINO S. LEYCO
Two weeks before the Luzon-wide lockdown, the national government begun to feel the pinch of the coronavirus pandemic after taxes paid by importers weakened following the factory shutdowns in China, the Philippines’ one of the major trading partners.
Based on the Bureau of the Treasury data, collections of the Bureau of Customs saw a snail’s pace growth in February that somehow affected the national government’s fiscal situation in the first two-months of the year.
The Duterte administration incurred a budget deficit of ₱14.6 billion in January to February of the year, but it was still lower by 54 percent compared with ₱31.8 billion in the same period last year.
At end-February, public spending amounted to ₱516 billion, while total revenues reached ₱501.5 billion.
According to the treasury, revenue growth quickened by nine percent during the two-month period from ₱458.8 billion a year ago, while expenditures increased by five percent year-on-year from ₱490.7 billion.
Tax collections improved by six percent to ₱443.7 billion from ₱417.7 billion in the previous year. The Bureau of Internal Revenue (BIR) contributed ₱337.1 billion, while Customs raised ₱100.7 billion and other offices with ₱5.9 billion.
Non-tax revenues, on the other hand, accelerated by 40 percent to ₱57.8 billion at end-February from ₱41.1 billion. Of that amount, the treasury bureau shared ₱34.2 billion and other offices raised the remaining ₱23.5 billion.
Meanwhile, the government spent ₱439.3 billion in January to February for its operations, social services and projects. The amount is higher by four percent compared with ₱419.4 billion a year ago. Interest payments also rose eight percent to ₱76.8 billion from ₱71.2 billion.
For February budget operations, the treasury admitted that the coronavirus disease (COVID-19) pandemic already took a toll on the government’s finances after imports slowed down during the month due to China lockdown.
While the national government’s fiscal gap in February narrowed by 51 percent year-on-year to ₱37.6 billion from ₱76.4 billion, the treasury noted that Customs collections grew by only one percent during the month.
“The slow growth for the month was mainly due to the slowdown of importation from China amid the coronavirus outbreak,” the bureau said.
Customs raised ₱44.8 billion in February, a marginal increase compared with ₱44.2 billion last year.
The BIR, meanwhile, saw a five percent jump in revenue take to ₱142.2 billion from ₱135.7 billion in the previous year while collections of other offices increased reached ₱2.8 billion, up eight percent compared with ₱2.6 billion last year.
Earlier, Finance Secretary Carlos G. Dominguez III said that tax collections would weaken this year following the enhanced community quarantine (ECQ) that restricted economic activities in Luzon, the nation’s main growth engine.
Dominguez said that the BIR, the government’s main tax agency, is hard-pressed to collect taxes, particularly after the extended deadline for the annual income tax returns (ITR) filing, which was expected to raise around ₱140 billion in April.
But despite the difficulties, the finance chief assured that the national government is working on ways to mitigate the ill-effects of COVID-19 by providing financial aid to people in need of support from the state.
The national government released last week its ₱100 billion, half of the ₱200 billion requirement for the social amelioration program.