By Elijah Joseph C. Tubayan
THE GOVERNMENT saw its fiscal deficit dip last month from the past year, as revenue growth slightly outpaced that of spending, the Bureau of the Treasury (BTr) reported on Monday.
The government posted a P32.9-billion fiscal deficit in May, down two percent from P33.4 billion in the same month last year.
“The deficit is slightly lower than last year’s level by two percent as revenue growth narrowly exceeded the acceleration in government spending,” the BTr noted.
Overall government revenues grew 13% to P259 billion from P228.3 billion, with tax revenues alone increasing by the same pace to P227 billion from P200.7 billion.
The Bureau of Internal Revenue (BIR) collected P172 billion that month, eight percent more than P158.7 billion a year ago, while the Bureau of Customs (BoC) raked in P52.7 billion, a 33% jump from P39.6 billion. Collections from other state offices that month, however, were 10% less at P2.2 billion from P2.5 billion in the same comparative months.
“The increase was due to the combined effects of the weaker peso, higher oil price and higher import volumes,” the BTr explained of the surge in Customs collections.
Non-tax inflows, meanwhile, accounted for P32 billion of overall revenues in May, recording a 16% increase from P27.5 billion a year ago. The BTr generated P21.4 billion of that amount, 19% more than the P18 billion recorded in 2017. Other government offices raked in P10.6 billion, 12% more than the past year’s P9.5 billion.
Overall expenditures last month, meanwhile, totaled P291.9 billion, 12% more than the P261.7 billion disbursed a year ago.
Interest payments were P21.1 billion, steady from May 2017, “mainly due to peso depreciation and an increase in rates for outstanding floating rate loans”.
Stripping out interest payments, net state disbursements grew 12% to P270.8 billion from P240.7 billion.
Michael L. Ricafort, economist at the Rizal Commercial Banking Corp., said that sustaining above-than-expected revenues would send a good signal to international rating agencies that the Tax Reform for Acceleration and Inclusion law, or Republic Act No. 10963, is delivering on its promise.
“Narrower budget deficits compared to the target ceiling set by the government amid improved government revenue collections may be taken more positively by credit rating agencies, especially if this is due to the structural improvements in government revenue collections as a result of tax reform measures and other reform measures to further improve tax collections/tax effort in a sustained/recurring manner,” Mr. Ricafort said in an e-mail.
He attributed the relatively slower year-on-year expenditure growth to “higher base/denominator effects in the same period last year.”
“A combination of improved government revenues and sustainable growth in government expenditures — especially on infrastructure — would be the ideal scenario, in terms of improved fiscal performance with structural improvements in tax revenue collections and increased economic growth brought about by greater contribution of more government spending on infrastructure and other spending that support long-term economic development/prospects,” Mr. Ricafort said.
The January-May fiscal deficit is now at P138.7 billion, more than double the P63.6 billion recorded in the same five months last year.
This is equivalent to 26.48% of the P523.7-billion full-year programmed budget shortfall.
“Compared to program, year-to-date deficit was 32% or P66.3 billion lower than programmed on account of higher revenue collections which exceeded the program by P81.5 billion or 7%,” the BTr said.
Revenues in the five months to May totaled P1.186 trillion, 19% more year-on-year from P996.5 billion.
Of that total, tax collections were P1.067 trillion, up 18% from P900.8 billion. The BIR collected P827.7 billion as of May, growing 15% from P716.8 billion a year ago, while the Customs bureau raked in 31% more at P229.3 billion from P174.9 billion. Collections from other state offices were P9.8 billion, eight percent more than the year-ago P9.1 billion.
Overall non-tax revenues amounted to P119.4 billion, 25% more than the P95.8 billion collected a year ago, with the BTr growing collections by 22% to P58.4 billion from P48 billion and other government offices increasing these inflows by 28% to P61.1 billion from P47.7 billion.
Expenditures in the first five months of the year totaled P1.33 trillion, up 25% from P1.06 trillion the past year.
Total interest payments amounted to P141.4 billion, seven percent more than P132.3 billion last year.
Net of interest payments, state spending grew 28% to P1.184 trillion from P927.8 billion in the same comparative five months.