• Govt deficit swings to P52.8B surplus in April

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    THE national government’s budget balance registered a P52.8 billion surplus in April, reversing a deficit in March, data from the Bureau of Treasury (BTr) released on Friday showed.

    The fiscal surplus of P53 billion is more or less on a par with April 2016 and Apr 2015 which brings the four-month deficit to only P30 billion, better than the P57.5 billion deficit in 2016 and P19 billion surplus in 2015, ING Bank Manila senior economist Joey Cuyegkeng said.

    In March, the Philippine posted a P61.5 billion deficit. Year-on-year, the surplus in April was lower compared with P55 billion.

    This trend is expected to continue this year, an analyst said, as government revenue usually spike at the start of the second quarter, consistent with the scheduled filing and payment of income taxes.

    “The size of the surplus might be moderated by an increase in government expenditure, aligned with the Durterte administration’s plan to boost infrastructure spending,” said Guian Angelo Dumalagan, market economist of Land Bank of the Philippines.

    The declaration of martial law in Mindanao might not have any permanent negative impact on the Philippine economy. It is likely just a temporary noise, which could cause some risk aversion. It may not overshadow the country’s strong macroeconomic fundamentals, Dumalagan noted.

    Revenue performance

    The BTr said revenue totaled P235.9 billion in March, down 4 percent or P10.8 billion from a year earlier.
    Tax revenue was relatively well, up P8.1 billion, but was fully offset by non-tax revenue which dropped P18.9 billion.

    In January to April, government revenue totaled P768.3 billion, up 6 percent or P42.7 billion from a year earlier.

    The Bureau of Internal Revenue (BIR) managed to collect P187.7 billion in April, up 6 percent or P10.0 billion year-one year.

    Total collections in January to April reached P558.1 billion, 10 percent or P50.2 billion in the same comparable period.

    Non-tax revenue was weighed by the lower income of the BTr in April. Its income of P7.1 billion during the period was cP20.8 billion or 75 percent lower.

    In January to April, BTr registered P30.1 billion in income, down 43 percent.

    Expenditure

    Government spending reached P183.1 billion, a 4 percent or P8.5 billion decline.

    Interest payments, which accounted for 7 percent of total expenditure, declined by 9 percent to P13.5 billion from P14.8 billion year-on-year as payments falling due as of end-April were moved to May due to official holidays.

    Steady growth for the period ensured that year-to-date spending is still higher than last year’s, reaching P798.4 billion and up 2 percent year-on-year.

    Excluding interest payments from expenditures, the government recovered from the primary deficit in March and registered a surplus of P66.3 billion for April.

    The primary surplus totaled P81.2 billion year-to-date, up 35 percent over the same period last year.

    The four-month performance is likely to bring the full year 2017 deficit to below the target deficit of P478 billion unless the succeeding months show a major improvement in spending, Cuyegkeng noted.

    Spending growth is important to bring the full-year deficit to within the government target growth rate of 6.5 percent to 7 percent, he added

    A slower pace of spending performance in the second quarter support our view that the second quarter GDP growth would be slower than a year earlier and could be on a par with the first quarter of 2017, “ Cuyegkeng said.

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