Budget gap narrows by 83.78% in April on tax collection surge

The national government’s fiscal balance yielded a narrower deficit in April as state revenues increased due to payment of income taxes during the period as well as the decline in public spending, Bureau of the Treasury (BTr) said Tuesday.

Data released by the Treasury showed the budget deficit last month stood at P44.4 billion, down 83.78% from P273.9 billion in April 2020.

The narrower fiscal shortfall “was driven by the 55.46% growth in revenue performance due to the payment of income taxes, vis-a-vis a 27.14% decline in expenditures from the substantial COVID-19 spending at the height of the imposition of the enhanced community quarantines last year.”

April’s budget gap brought the year-to-date fiscal gap to P365.9 billion, 1.63% higher than the P360 billion deficit recorded in the same period last year.

Revenues

The government’s revenue collections in April totaled P291.9 billion, up 55.46% from P187.8 billion in April 2020. This brought the January to April revenue performance to P988.4 billion, up 3.95% year-on-year.

The BTr said the Bureau of Internal Revenue (BIR) contributed the bulk of the growth last month as its actual collections stood at P219 billion, more than double last year’s P90.5 billion.

“The positive outturn for the period can be attributed to the timing of payment of income taxes,” the Treasury said, noting that the BIR stood firm with the April 15 deadline for the filing and payment of income and other taxes.

The Bureau of Customs (BOC), likewise, saw a 50.42% increase in its collections to P51.8 billion in April “driven by the continued improvement in importation volume.

The Treasury’s income, meanwhile, slid by 84.5% to P9 billion, “coming from the high base effect of last year’s remittances in compliance with RA 11469 (Bayanihan 1).”

“The decline in income from government services and dividends on shares of stocks held by the government was partially offset by the higher income from interest on advances from GOCCs (government owned and controlled companies) and government deposits,” the BTr said.

Other non-tax collections, which include privatization proceeds and fees and charges, rose to P10.8 billion, up 140.45% from P4.5 billion last year.

“Growth was partly propelled by the remittance of the BCDA (Bases Conversion and Development Authority) of the disposition proceeds amounting to P2.7 billion as well as eased restrictions on the operations of government collecting offices versus last year,” the Treasury said.

Expenditures

Government spending in April, on the other hand, reached P336.3 billion. This is 27.14% lower than the P461.7-billion expenditures last year “owing to the high base effect of releases for COVID-19 emergency response and measures under RA No. 11469 or the Bayanihan to Heal as One Act in 2020.”

“These included the first tranches of the Social Amelioration Program and Small Business Wage Subsidy Program, and the Bayanihan Grant to provinces, cities, and municipalities which were released in April last year,” the BTr said.

Nevertheless, the Treasury said the year-to-date expenditure of P1.354 trillion was still 3.31% higher from last year, with primary spending making up 89% of the total disbursement.

April primary expenditure, net of interest payments, declined to P312.5 billion from P439.8 billion in the same month in 2020.

Interest payments, meanwhile, increased by 8.86% to P23.8 billion “largely due to coupon payments for reissued Treasury Bonds.”—AOL, GMA News