THE national government posted a budget surplus of P66.8 billion in April, over 1,250 percent higher from last year, as revenue collections outmatched spending during the period.
The Bureau of the Treasury said the budget surplus during the reference month was P61.9 billion higher than the P4.9 billion recorded surplus in April of last year. The national government’s budget surplus in April was the highest in four years, or since the P86.872 billion recorded in April 2019, historical BTr data showed.
The budget surplus allowed the national government to trim its overall budget deficit on a year-to-date basis. The national government’s budget deficit in January to April was at P204.1 billion, about 35 percent lower than the P311.9-billion recorded deficit in the same period last year.
Rizal Commercial Banking Corp. Chief Economist Michael Ricafort attributed the surge in government earnings in April to the “seasonal peak” of revenue collections, which government officials describe as the tax season.
Ricafort added that the reopening of the economy as well as the better-than-anticipated economic performance in the first quarter contributed to the government’s improved tax revenue collections.
“More disciplined spending by the government, together with reduced need for costly Covid-related spending/programs with no more large-scale lockdowns since 2022 and as a policy priority, going forward, also helped improve the country’s fiscal performance recently, thereby partly adding to the latest budget surplus,” he said.
Furthermore, Ricafort said there is “still a chance” for a “narrower” budget deficit in the coming months as the economy moves toward “greater normalcy,” thereby lifting employment, incomes and livelihoods that leads to higher tax collections.
Nonetheless, the economist noted hat the lower individual income tax rates could still lower the revenue collections of the tax bureau.
Ricafort stressed the “urgency” of pushing for more tax reforms and fiscal reform measures to boost the national government’s tax revenue collections.
He said this could be done by implementing new or higher taxes, more intensified tax collections from existing tax laws, and “more disciplined” government spending that includes rightsizing the government.
Revenue performance
The Treasury said the national government earned P440.7 billion in April, more than a quarter over the P92.7 billion a year ago because of better collections of the tax and customs bureaus.
The 26.66-percent increase in April collections lifted the national government’s earnings in the January-to-April period to P1.259 trillion.
The amount was 11.22 percent higher than the P1.132 trillion collected by the national government in the same four-month period last year.
The Treasury explained that the Bureau of Internal Revenue’s (BIR) April collections expanded by 40.24 percent to P336 billion from P96.4 billion because of the TRAIN law provision mandating the filing of quarterly VAT returns.
From January to April, the BIR raked in P841.2 billion, 13.31 percent over the P742.4 billion it collected in the same period last year.
“Collections from the Bureau of Customs [BOC] registered modest growth of 2.87 percent, increasing by P1.9 billion in April 2023 to P67.6 billion from P65.7 billion in the previous year,” the Treasury said.
“BOC’s [year-to-date] collection reached P281.4 billion, 10.68 percent or P27.2 billion better [year-on-year],” it added.
Expenditures
The national government’s disbursements in April grew by 9 percent to P373.9 billion from P343 billion last year due to the subsidy released to a state-run firm and larger capital expenditures for infrastructure.
The Treasury noted that the national government’s expenditure last month grew because of subsidy release to Philippine Health Insurance Corp., “larger” capital expenditures of the Department of Public Works and Highways and the Department of Transportation, as well as higher interest payments.
“The spending growth was tempered by the decline in transfers to Local Government Units due to lower National Tax Allotment shares,” it said.
“Total expenditures for the 4-month period reached P1.5 trillion, inching up by 1.33 percent or P19.2 billion on a [year-to-date] basis.”
The Treasury said primary expenditures accounted for 87.63 percent or P327.6 billion of total expenditures in April, about 7.18 percent higher than the P305.7 billion last year.
Cumulative primary expenditures of P1.3 trillion from January to April reflected a slight growth of 1.40 percent or P17.7 billion compared to last year, according to the Treasury.
Interest payments, meanwhile, reached P46.3 billion in April, growing by nearly 24 percent on an annual basis.
As of end-April, the national government’s total interest payments reached P188.2 billion, 1.6 percent higher than the P186.6 billion recorded in the four-month period of last year.