October 25, 2024 | 12:00am
Nine-month deficit at P970 Billion
MANILA, Philippines — The country’s budget gap softened to P970 billion in nine months as both revenue collections and state spending exceeded targets, with the overall shortfall falling below forecast.
Data from the Bureau of the Treasury showed that the government incurred a budget deficit of P970.2 billion from January to September, 1.35 percent lower than the P983.5 billion recorded in the same period last year.
A budget deficit means that the government is still spending beyond what it earned from revenue collections, but at a slower pace this time around.
The nine-month budget shortfall is also nine percent lower than the P1.07 trillion expectation set by the Cabinet-level Development Budget Coordination Committee for the period.
The figure is just 65.36 percent of the P1.5 trillion full-year program. The cooling deficit for the nine-month period was attributed to the increase in revenue collections, offsetting the minimal rise in expenditures.
Data showed that total revenue collection as of the end of the third quarter improved by 16 percent to P3.29 trillion as against the P2.84 trillion in the same period last year, as both tax and non-tax revenues increased.
It also surpassed the programmed revenue collection of P3.15 trillion or by almost five percent.
The bulk or 85 percent of the revenues were from tax collections at P2.81 trillion, rising by 10.6 percent. Non-tax collections, on the other hand, soared by 62.5 percent to P481.1 billion.
The Bureau of Internal Revenue’s haul increased by 12.8 percent to P2.09 trillion, effectively reaching 74 percent of the P2.8 trillion full-year target.
The Treasury said the nine-month expansion for the BIR was driven by higher collection on value-added tax, partly due to the impact of the change in payment schedule which allows taxpayers to shift from monthly to quarterly filing of VAT returns.
The double-digit increase in BIR’s haul was also due to better income, domestic and percentage taxes.
The Bureau of Customs (BOC) managed to post a 4.6 percent increase in collection to P690.7 billion also due to higher VAT and import duties.
BOC’s uptake as of end-September is 73.5 percent of the P939.7 billion target for the year.
Both BIR and BOC, however, slightly missed their targets by 0.98 percent and 0.46 percent, respectively.
Income generated by the Treasury also jumped by 33 percent to P210.2 billion on the back of higher government share from the profits of the Philippine Amusement and Gaming Corp., interest income from government deposits and guarantee fee collections.
Collection from other offices including privatization proceeds and fees and charges nearly doubled to P270.9 billion. This includes the P30-billion remittance from the Manila International Airport Authority, representing the upfront payment for the MIAA-Ninoy Aquino International Airport privatization project.
On the other hand, government spending in the nine-month period went up 11.56 percent to P4.26 trillion.
The increase was driven by the implementation of capital outlay projects of the Department of Public Works and Highways, larger personnel services expenditures following the first tranche of salary adjustments of qualified civilian government employees and the payments for health emergency allowance claims of healthcare workers.
Primary expenditures at P3.68 trillion accounted for 86 percent of the total spending, up by almost 10 percent.
Apart from primary expenditures, the government increased its interest payments by 27 percent to P583.3. billion from P460.1 billion a year ago.
This was due mainly from the servicing of new external loans taken out from the International Bank for Reconstruction and Development, as well as the impact of foreign exchange fluctuations.
Primary expenditures slightly exceeded the program by 1.09 percent while interest payments were flat.
Government spending is around 20 percent of the country’s gross domestic product.
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