Treasury: Gov’t fiscal balance posted wider deficit in March

The Philippine government’s fiscal balance saw a wider deficit in March as state collection declined, albeit spending also slipped during the period, data released by the Bureau of the Treasury (BTr) on Tuesday showed.

The national government’s budget deficit stood at P210.3 billion, up 12.04% from P187.7 billion in March 2022.

The March fiscal balance also compares with the P106.4-billion deficit seen in February.

“The higher fiscal gap was brought about by an 11.99% decrease in government receipts even as spending was lower by 2.62%,” the Treasury said.

Year-to-date, the budget shortfall for the January to March period amounted to

P270.9 billion, down 14.51% from P316.8 billion year-on-year.

In an emailed commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the budget deficit in March is “the widest in three months” or since December 2022.

Ricafort said the wider fiscal gap in March was due to the reduction of some individual income tax rates that increased the take home pay of most income brackets under the TRAIN law.

In particular, total government revenues in March totaled P258.7 billion, down 11.99% from P293.9 billion a year earlier.

The Bureau of Internal Revenue’s, the government’s largest tax collector, slipped by 17.27% to P141 billion from P170.4 billion “due in part to the impact of the transitory provisions of the Bureau’s Revenue Memorandum Circular No. 5-2023 in line with Section 37 of the TRAIN law.”

The said circular allowed value-added tax-registered taxpayers to no longer file monthly VAT declarations for transactions starting January 1, 2023, but will instead file quarterly VAT returns within 25 days following the close of each taxable quarter. 

The Bureau of Customs, on the other hand, collected P80.3 billion, up 13.51% year-on-year; while income from the BTr slowed to P14.9 billion, down 55.47% from a year earlier.

Non-tax collections from other offices including privatization proceeds and fees and charges increased to P22 billion in from P16.7 billion year-on-year mainly due to the remittance of the unutilized balance from the Unconditional Cash Transfer program, according to the BTr.

Government expenditures also declined in March to P468.9 billion, down 2.62% "largely due to the lower National Tax Allotment shares of LGUs, as well as the timing of significant releases for some programs, such as the Department of Transportation’s (DOTr) Public Utility Vehicle (PUV) Service Contracting Program and Fuel Subsidy Program.”

Broken down, primary expenditures, net of interest payments, reached P408.0 billion, down 4.22% year-on-year.

Interest payments (IP) for March stood at P60.9 billion, up 9.63% from a year earlier. — RSJ, GMA Integrated News