NG budget swings to surplus of P45.75 billion in Jan.

 NG budget swings to surplus of P45.75 billion in Jan.
Dark clouds hover over Manila before dawn, Sept 3. — PHILIPPINE STAR/ MIGUEL DE GUZMAN

By Luisa Maria Jacinta C. Jocson, Reporter

The National Government’s (NG) budget balance swung to a surplus in January as revenue growth outpaced state spending.

The Philippines’ budget recorded a surplus of P45.75 billion, a turnaround from the P23.38 billion deficit a year earlier, the Bureau of the Treasury (BTr) reported on Friday.

The last time the government recorded a budget surplus was in April 2022, with P4.94 billion.

“This favorable outcome was a result of revenues outgrowing government spending: revenues grew by 25.2% while spending rose by 0.3%,” Finance Secretary Benjamin E. Diokno said in a Viber message to reporters.

Revenues for January grew 25.21% to P348.17 billion from P278.08 billion the previous year.

Accounting for 88% of total revenues, tax collections rose 19.48% to P305.43 billion from P255.63 billion in the same month last year.

The Bureau of Internal Revenue collected P234.82 billion, up 19.94% from a year ago.

“The higher outturn can be partly attributed to the revenue collection reforms undertaken by the agency, including its digitalization programs,” the BTr said in a press release.

Collections from the Bureau of Customs increased by 21% to P70.59 billion due to “stringent collection efforts.”

Non-tax revenues surged 90.37% to P42.73 billion from P22.45 billion. The BTr’s revenues totaled P17.75 billion, up 60% from the same period a year ago.

“This was primarily driven by higher investment, interest income on NG deposits and remittance of NG shares in the Philippine Amusement and Gaming Corp. profit,” it added.

Meanwhile, government expenditures inched up 0.32% to P302.42 billion in January from P301.46 billion previously.

Primary spending — which refers to total expenditures minus interest payments — went up 8.28% to P255.45 billion from P235.91 billion. It accounted for 84% of disbursements during the month.

“This resulted mainly from higher disbursements by the Department of National Defense and Department of Transportation for their capital outlay projects,” the BTr said.

It also attributed spending to the Department of Social Welfare and Development and the Department of Education for the implementation of social protection programs and educational grants or subsidies, respectively.

However, interest payments declined by 28% to P46.97 billion from P65.55 billion year on year.

According to Nicholas Antonio T. Mapa, a senior economist at ING Bank N.V. Manila, the growth in revenue for January suggests that the Philippines’ economic recovery is still strong.

“This should help alleviate some pressure on the overall debt, but government spending remains tepid and will not be counted on to drive or support growth this year,” he said in a Viber message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the improvement in the budget gap was due to eased mobility restrictions leading to increased spending.

“[This led] to increased sales, employment, livelihood, and other business activities that fundamentally increased the government’s tax revenue collections,” he said in a Viber message.

Mr. Ricafort also noted that the government can employ tax reform measures to further improve revenue collections.

“Fiscal reform measures such as the proposed rightsizing of the government would further reduce government expenditures and increase productivity, alongside anti-corruption and anti-leakage measures to further reduce unnecessary government expenditures,” he added.

The NG fiscal gap narrowed to P1.61 trillion in 2022, bringing the deficit to 7.33% of gross domestic product (GDP). This was lower than 8.6% in 2021 but higher than the government’s target of 6.9%.

This year, the government has set a budget deficit ceiling of P1.47 trillion, equivalent to 6.1% of GDP. The program consists of P3.71 trillion in revenues and P5.18 trillion in disbursements.