Gov’t deficit narrows in November on 16% higher collections

MANILA, Philippines – Stronger collections kept pace with increased spending last November, based on data released by the Bureau of Treasury (BTr) on Tuesday, December 26.

The Philippine government hit an P8.6-billion fiscal deficit for the month, down from P19.1 billion a year ago, as revenue collection grew 16% against the 10% increase in public spending.

Despite November’s contraction, the year-to-date deficit is still wider by 4% to P243.5 billion compared to the P235.2 billion recorded last year.

Collections up

Total government revenue for November was up 16% to P243.5 billion, resulting in a year-to-date collection of P2.25 trillion which in turn is 11% better than the January to November period last year.

The Bureau of Internal Revenue (BIR) raised P179.4 billion for November, up 14% over last year’s level.

Total BIR collections as of end-November hit P1.621 trillion, up 12% from the same period in 2016. The BTr noted that amount would be P1.628 trillion if tax refunds were included.

The Bureau of Customs (BOC), meanwhile, saw collections rise by 15% to P46.4 billion. Year-to-date, BOC revenue has grown 14% over the 2016 level to P413.1 billion.

Total BOC collections for the year amounted to P415.7 billion after the tax refund for January to November was taken into account.

The BTr, for its part, raised P4.3 billion in November, up 2% year-on-year on higher collections of foreign exchange risk cover and guarantee fees which offset the decline in Bond Sinking Fund (BSF) and Securities Stabilization Fund (SSF) income as well as the government share in airport terminal fees.

From January to November, BTr income totaled P86.5 billion, down by 9% from the same period last year.

Non-tax revenue also saw a 51% increase to P11 billion for the month on the back of higher remittances of fees and charges from various offices. This put the year-to-date collection at P109.5 billion, up 2% over the same period last year.

Increased spending

Government spending, meanwhile, grew by 10% to P252.1 billion for the month. So far, this year, total government expenditures are also up by 10% to P2.493.5 trillion.

Interest payments for November increased by 5% or P1 billion year-on-year to total P20.6 billion, owing to coupon payments which were P1.3 billion higher than the 2016 level.

Interest payments totaled P290 billion for January to November which is 2% or P4.6 billion higher compared to the same period last year.

The BTr noted that total interest payments for the year currently account for 12% of expenditures and 13% of revenues, down from 13% and 14% in 2016, respectively.

Excluding interest payments, the government hit a primary surplus of P12 billion, P11.6 billion better compared to the P406-million surplus in November 2016.

But so far, this year, the primary surplus of P46.5 billion is down from the P50.2 billion recorded a year ago.

The government’s economic managers retained the deficit ceiling of 3% of gross domestic product (GDP) for 2018 with the first tax reform package expected to generate around P90 billion in additional government revenue. – Rappler.com