News – PH – Pandemic pushes Philippines budget deficit to P137 trillion in 2020


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The Philippine government made a whopping P1 budget deficit of 37 trillion in 2020, however, a closer look at the numbers revealed that the government had failed to meet its targets, particularly spending on the pandemic

The Treasury Department said on Friday, Jan. February that the deficit was more than double or 107% higher than the P6602 billion deficit in 2019 and corresponds to 76% of the country’s gross domestic product

The larger budget gap, however, was 24 45% smaller than the revised full year program of P1815 trillion

Government spending on goods and services soared 113% to P423 trillion in 2020, mainly due to programs to combat the effects of the coronavirus pandemic

Note, however, that while spending increased, it was still below the government’s intended spending

President Rodrigo Duterte’s economic team programmed P4335 trillion for 2020, which means the spending was 249% lower or P1078 billion than the target

Meanwhile, revenue fell to P2856 trillion, 897% lower than the P32019, 31 trillion was collected, but 133% better than the P252 trillion revised 2020 collection target

A budget deficit arises when expenses exceed government income, the opposite of which is known as a surplus, where collections exceed disbursements

It is normal for governments to run a deficit, especially in developing countries, as nations aim to stimulate the economy. It fills the deficit by borrowing money from domestic and international sources

And while spending has increased over the past year, the government has failed to meet its spending target

For 2021, the government expects a larger budget deficit, equivalent to 8.9% of GDP

The total payout program for 2021 is P466 trillion, while the revenue forecast is P288 trillion

The government expects another year of lower revenues as the CREATE bill – a measure that will cut corporate taxes to give businesses more money to spend – is expected to be signed by Duterte – Rapplercom

A sociologist by heart, a journalist by profession Ralf is Rappler’s business reporter for macroeconomics, public finances, companies and agriculture

Deficit spending, government budget balance, budget gap

News – PH – Pandemic pushes Philippines budget deficit to P137 trillion in 2020
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