Sept. budget deficit slightly narrows

By Luisa Maria Jacinta C. Jocson, Reporter

THE National Government’s budget deficit slightly narrowed in September, as revenue growth outpaced expenditures, the Bureau of the Treasury (BTr) said on Wednesday.

The BTr’s cash operation report showed the budget gap stood at P179.8 billion in September, down 0.61% from P180.9 billion a year earlier. However, this was more than double the P72-billion fiscal deficit in August.

Total revenues rose by a quarter to P288.8 billion from P231.45 billion a year ago, as tax and nontax collections grew by double digits.

Tax revenues went up by 18.6% to P253.3 billion in September. The bulk came from the Bureau of Internal Revenue (BIR) which collected P173.6 billion, up 12.6% year on year. Bureau of Customs (BoC) collection jumped 37.7% to P79.3 billion.

Nontax revenues surged 98.9% to P35.6 billion, thanks to the 30.29% rise in BTr revenues to P7.3 billion.

“The improvement resulted mainly from higher government share from Philippine Amusement and Gaming Corp. (PAGCOR) profit, BTr managed funds and interest on government deposits,” the Treasury said.

Meanwhile, expenditures rose by 13.63% to P468.6 billion from P412.4 billion in 2021.

“This was driven mainly by higher capital expenditures, national tax allotment of local government units, and interest payments, alongside the subsidy releases to the PhilHealth for the National Health Insurance program,” the BTr said.

National tax allotments to LGUs jumped by 43.2% to P95.8 billion, while interest payments rose by 25.1% to P59.9 billion and subsidies surged by 157.6% to P23.7 billion.

Analysts attributed the continued growth in revenues to increased economic activity and mobility restrictions amid a coronavirus pandemic.

“There has been a considerable uptick of total revenues this year and it has consistently outpaced expenditure growth,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail. “This is due to the reopening of the economy and the economic activity growth that went along with it. Nevertheless, we still observed a moderate fiscal stimulus from the National Government, while the double-digit growth of revenues continued.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the absence of lockdowns and the Marcos administration’s priority on fiscal discipline reduced the government financial assistance.

“Large lockdowns in the past have proven to be costly for the government that led to wider budget deficits that, in turn, led to large government borrowings,” he said in a text message.

Mr. Ricafort said elevated inflation, the weaker peso and higher interest rates could increase state spending.

Mr. Asuncion said rising interest rates are also putting pressure on the government to tighten spending.

“This is why we see financing efforts such as dollar denominated bonds and planned dollar retail Treasury bonds in spite of rising revenues. We think that the National Government is making sure that it has enough to sustain spending and fund the budget deficit moving forward,” he added.

NINE-MONTH GAP
For the first nine months of the year, the fiscal deficit narrowed to P1 trillion, 11.09% lower than the P1.14-trillion gap a year ago, and 20.47% behind the year-to-date goal of P1.3 trillion “due to higher receipts and slower expenditure growth.”

Total revenues jumped by 18.79% to P2.7 trillion in the nine-month period, accounting for 80% of the P3.3-trillion full-year program.

Tax collection rose by 17.48% to P2.4 trillion, while nontax revenues increased by 31.55% to P272.6 billion.

The BIR collected P1.7 trillion, up by 12.29% year on year but fell 1.99% short of its P1.8-trillion year-to-date goal.

Customs collections went up by 35.89% year on year to P638.5 billion, and exceeding the P542.2-billion year-to-date target by 17.76%.

The BTr’s cumulative income of P129.7 billion also exceeded the P61.2-billion full-year program.

On the other hand, nine-month expenditures went up by 8.71% to P3.7 trillion, still 1.86% lower than the nine-month program.

“Nonetheless, this narrowed down from the 3.04% or P75.4-billion program gap during the first semester of this year, indicating the gradual catching-up of agency disbursements,” the BTr said.

Primary expenditures rose 7.68% to P3.3 trillion, but 1.7% lower than the year-to-date target.

Interest payments increased 17.87% to P400.0 billion, but 2,88% below the target.

To date, the National Government has already disbursed 74% of the P5 trillion full-year program.

The government aims to reduce the deficit to 7.6% of GDP this year, bringing it down to 3% of GDP by 2028.