Gov’t nets P32.6-B budget surplus in August

MANILA, Philippines – The national government’s revenue collection beat out its spending last August, marking the first time it has recorded a surplus since the Duterte administration took the helm.

Data released by the Department of Finance (DOF) on Thursday, October 20, showed that the national government more than doubled its budget surplus as it netted P32.6 billion in August 2016, compared to P15 billon in August 2015.

August’s surplus means the government has closed the 8-month fiscal gap to P138.4 billion, “which leaves the government ample fiscal room to support growth for the remainder of the year,” the DOF said in a statement.

The government agency added that this was within the P388.87-billion ceiling for the year, although it is significantly higher compared to the P3.4-billion gap incurred in the same period in 2015.

Government collections

For the month of August, government revenues reached P209.6 billion, up by 19% from the P176.7 billion in the previous year.

The collection was led by the DOF’s two main revenue sources – the Bureau of Internal Revenue (BIR), which contributed P157.5 billion, and the Bureau of Customs (BOC), which generated P33.1 billion.

The two agencies accounted for 90% of government revenue and raised their tax take during the month by 14% and 23% respectively, said the DOF.

Non-tax revenues from other government agencies also increased 75% to P12 billion from P6.9 billion, while the Treasury’s income doubled from last year’s P2.7 billion to P5.8 billion.

For 2016, total government revenues amounted to P1.481 trillion at end-August, a 3% improvement from P1.441 trillion a year ago.

The government explained that the slower growth pace was due to the one-time transfer of coconut levy assets worth P60.1 billion in May last year.

Excluding the coconut levy assets, data showed that government revenues improved by 7% year-on-year in the first 8 months of 2016.

Expenditures

The increased collection for August, however, was tempered somewhat by accelerated spending. The government recorded 9% growth in expenditure to P177 billion from P161.6 billion last year.

Interest payments took up 13.2% of total spending, amounting to P23.4 billion in August, up 42% from last year’s P16.5 billion.

Excluding interest payments, the government recorded a primary surplus of P56 billion in August, following last month’s fall to a primary deficit. Likewise, the figure was higher by 78% year-on-year.

The government has spent a total of P1.619 trillion between January 2016 and August 2016, up by 12% compared to P1.444 trillion a year ago.

The Duterte administration has promised to significantly increase spending as a core part of its 10-point socioeconomic agenda.

Budget Secretary Benjamin Diokno earlier said the government plans to spend at least P860.7 billion for infrastructure projects across the country next year to kickstart what he said would be the “golden age” of infrastructure building.

Last month, the DOF also submitted the first package of its proposed tax reforms. – Rappler.com