THE government's budget balance continued to run a deficit as spending outpaced revenues, a Cabinet official reported on Tuesday.

The P642.8-billion budget shortfall in the January to July period is 7.2-percent higher than the P599.5 billion deficit logged in the same period last year.

During the budget deliberation of the Department of Finance on Tuesday, Secretary Ralph Recto said that government spending totaled P3.25 trillion in the seven-month period, outpacing the P2.61-trillion revenue collection.

The revenues, however, grew at a faster rate of 14.8 percent compared to the 13.2-percent increase in expenditures.

Tax collections accounted for the bulk of the revenues at P2.34 trillion in the January to July period, 11-percent higher than the P2.02 trillion recorded in the same period last year.

"We credit this feat to the BIR (Bureau of Internal Revenue) and BoC's (Bureau of Customs) Brave digitalization strategies and the balikatan with allied agencies to kick our revenue operations into high gear.

Brave is the government's initiative to combat smuggling and illicit trade, and has five components: Border security enhancement; Revenue collection and revenue-base protection; Adaptive regulations and compliance monitoring; Vigilant enforcement operations and vigorous intelligence gathering activities; and Effective engagement with stakeholders and inter-agency cooperation.

Broken down, the BIR collected P1.68 trillion during the period, 12.7-percent higher than the P1.49 trillion last year.

Customs revenue collections, meanwhile, totaled P535.9 billion, up 5.8 percent from P506.5 billion last year.

Nontax revenues, on the other hand, totaled P368.8 billion in the January to July period, 44.5-percent higher than the P255.3 billion last year.

Recto said that the dividends from the government-owned and controlled corporations contributed much to the increase, which is approximately P185 billion, up by 65 percent from P112 billion collected last year.

Meanwhile, the Bureau of the Treasury recorded a 27.8-percent increase in its collection to P183.8 billion from P143.8 billion last year.

"This strong revenue performance placed us among Asia's top revenue-to-GDP (gross domestic product) ratios at 17.1 percent for the first half of the year. And this is above our full-year target of 16.1 percent," Recto said.

"As we ramp up Brave, we anticipate a 10.3 percent average annual growth in total revenues over the medium term to support our people's growing needs," he added.