Jan P2.2B surplus reverses yr-earlier, Dec deficits
THE Philippine national government wiped out its previous budget deficits and posted a P2.22-billion budget surplus in January, a turnaround traced by the Bureau of Treasury to improved revenue collection efforts amid prudent spending.
The January surplus reversed a deficit of P118.22 billion in December and P3.47 billion in January 2016, data from the Treasury bureau showed on Thursday.
Revenue for the month rose 10 percent year-on-year to P200.31 billion, while spending increased only 7 percent to P198.09 billion.
A private bank analyst said such an increase in spending fell short of expectations.
The government had set a cap on its budget deficit for 2017 at 3 percent of the country’s gross domestic product (GDP).
The Bureaus of Internal Revenue (BIR) and Customs (BoC) collected P147.39 billion and P35.94 billion, respectively, in January.
At the BIR, collections increased on the back of higher taxpayer compliance and other reforms undertaken, such as the expansion of its Large Taxpayers Service.
The BoC, meanwhile, has started implementing sweeping reforms to improve collections.
Other offices, however, registered a 13-percent decline in collections to P1 billion from P1.16 billion previously.
Non-tax revenue contracted 21 percent to P15.97 billion from P20.33 billion. The Treasury bureau reported an income of P8 billion, up 1 percent from P7.93 billion, while revenue reported by other offices fell 36 percent to7.96 billion from P12.4 billion.
“The minimal BTr income growth was made possible by the higher interest on advances to GOCCs [government-owned and -controlled corporations] well as a higher uptake of the share in PAGCOR [Philippine Amusement and Gaming Corp.] income. These compensated for the lower interest income earned on NG [national government]deposits lodged with the BSP [Bangko Sentral ng Pilipinas],” the bureau said.
“Strong growth from the two major revenue generating agencies of the NG ensured that the contraction was counterbalanced, leading to total revenue growth of 10 percent year-on-year,” it added.
In terms of government spending, only 21 percent of January expenditures went into interest payments (IP), reaching P42.25 billion, the Treasury said.
Net of interest payments, the budget yielded a P44.57 billion primary surplus in January, 6 percent wider than a surplus of P42.12 billion posted a year earlier, it added.
Spending below expectations
An economist with a foreign bank expressed disappointment over the level of government spending in January at only P198.09 billion.
The “January fiscal performance is a disappointment. We had expected that government headline and core spending would be faster than January 2016 growth,” ING Bank Manila senior economist Joey Cuyegkeng said.
Looking forward, the ING economist is optimistic about higher government spending in February and this month.
“An indication that government spending may have been accelerating is the surprise announcement of a three-year Retail Treasury Bond (RTB) issue (with the offer amount at P30 billion),” he said.
In past issues, RTBs were offered in the second half, were normally lumpy and substantially exceeded the offered amount, he explained.
“If the RTB issuance (with an offer period of 28 March to 6 April) is well received by the market and generates a substantial amount of financing, the future financing program or schedule could be cut,” he added.