THE national government’s budget deficit came close to tripling in March from the preceding month as expenditure increased by twice the speed of growth in revenue collections, pulling the first-quarter position back into negative territory.
The budget deficit widened to P61.5 billion in March from a P23.7 billion gap in February, data from the Bureau of Treasury (BTr) showed on Wednesday.
The government has set a cap on its budget deficit for the whole of 2017 at 3 percent of the country’s gross domestic product (GDP). The Treasury does not report such figure for its monthly data.
Revenue vs expenditure
Government revenue in March rose 18.7 percent to P180.23 billion from P151.83 billion in February.
Collections by the Bureau of Internal Revenue (BIR) grew 10.6 percent to P117.14 billion from P105.86 billion, while Bureau of Customs (BoC) collections surged 20.9 percent to P37.33 billion from P30.85 billion.
Expenditure, on the other hand, increased by 37.6 percent to P241.70 billion in March from P175.56 billion in February, with the bulk going into tax expenses and “other expenditures,” for which the Treasury report showed no details. The Department of Budget and Management (DBM) is scheduled to report such details weeks from now.
For now, the Treasury report included figures for interest payments, which widened 29 percent month-on-month to P31.27 billion in March. That comprised 16 percent of March expenditures.
Allotment to local governments rose 0.10 percent to P40.77 billion in the same period.
Other expenditures and tax expenditures rose to P161.80 billion and P81 billion, respectively, while subsidies declined to P8.4 billion, the report said.
Showing a different trend on a year-on-year basis, the budget deficit in March narrowed 17 percent from P74.4 billion. Again, the report gave no explanation.
Revenue for the month rose 14 percent from P157.8 billion a year earlier, while spending grew only 4 percent from P232.2 billion.
The Treasury, however, said in its report the BIR “achieved double-digit growth for the third consecutive month of the year with March collection amounting to P117.4 billion, from which, P204 million in tax refunds paid to claimants results in final collections of P117.1 billion, still up 11 percent over last year’s level.”
This resulted in a P370.4 billion collection for the first quarter – a 12 percent or P40.2 billion increment from 2016, it said.
BoC collections for March were up 15 percent year-on-year to P37.3 billion, net of the P803 million in tax refunds, it noted.
“This is also the third consecutive month of double-digit growth for the BoC, which improved its first-quarter collection by 15 percent year-on-year to P104.1 billion,” it added.
Meanwhile, income generated and collected by the Bureau of the Treasury (BTr) amounted to P9.6 billion for the month, down 14 percent from a year earlier.
“The reduced holdings of the BSF/SSF [bond sinking fund/securities stabilization fund]weighed on investment income, offsetting gains from other sources. First-quarter BTr income amounted to P22.9 billion, down 8 percent compared to last year,” it said.
Non-tax revenue from other offices for March reached P14.3 billion, doubling the collections from a year earlier while reversing the year-on-year decline recorded for the first two months. This brings the end-March collections to P29.9 billion for a 4 percent improvement from last year, it added.
The March deficit brought the cumulative shortfall for the first three months of the year to P83 billion, 26 percent narrower than the P112.5 billion during the corresponding three-month period a year ago.
The bureau said January to March revenues grew 11 percent year-on-year to P532.4 billion from P479 billion in 2016.
Year-to-date expenditures registered slight growth of 4 percent to P615.4 billion from P591.5 billion.
In terms of interest payments in the year to date, IP dropped by 5 percent to P97.8 billion in the three months to March.
Primary budget in the quarter posted a surplus of P14.9 billion, a reversal of the P9.9 billion gap a year earlier “due to lower interest payments, coupled with strong revenue growth for the period.” By