Gov't fiscal gap reached P250.9B in September - Treasury

The Philippine government saw its fiscal balance yield a wider shortfall in September as state collections declined while expenditures expanded.

Data released by the Bureau of the Treasury on Wednesday showed the national government’s budget deficit stood at P250.9 billion last month, higher by 39.6% from P179.8 billion in the same period in 2022.

“The fiscal outturn for the period was underpinned by an 8.06% year-over-year acceleration in expenditures coupled with an 11.57% decrease in government receipts,” the Treasury said.

The year-to-date fiscal gap, however, was narrower by 2.89% to P983.5 billion from P1.012 trillion seen in the January–September 2022 period.

The Treasury added that the cumulative budget deficit was 11.11% lower than P1.106 trillion and was also 66% of the P1.499 trillion full-year deficit ceiling “due to higher revenue and lower expenditure performance than programmed for the period.”

In an emailed commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the budget gap was “the widest so far this year or since December 2022.”

Ricafort said the wider fiscal gap was brought about by “higher prices/inflation could have slowed down spending by consumers, businesses/industries, government, and other institutions, thereby reducing sales/revenues and the corresponding taxes paid.”

“The budget deficit also widened after government expenditures grew faster amid some catch-up spending by the national government, especially on infrastructure, after some underspending earlier in 2023 that partly slowed down economic growth,” the economist said.

Revenues

The government collected P255.4 billion in September, down 11.57% from P288.8 billion a year earlier.

This brought the year-to-date state collections to P2.837 trillion, up 6.79% from P2.657 trillion collected during the January–September 2022 period.

The cumulative revenue for the period accounted for 76.10% of the P3.729 trillion full-year target as well as surpassing the nine-month goal by 2.98%.

Of the total collections, 89.55% or P2.541 trillion was generated through taxes, while the balance of 10.45% was from non-tax sources.

The Bureau of Internal Revenue (BIR) collected P152.2 billion in September, down 12.36% from P173.6 billion year-on-year.

Despite the lower collections last month, the BIR still saw its year-to-date revenues grow to P1.858 trillion, surpassing last year’s P1.732 trillion by 7.25%.

To date, the taxman has already raised 70% of its P2.639-trillion target for this year.

The Bureau of Customs (BOC), meanwhile, collected P78.9 billion, down 0.47% from P79.3 billion in September 2022.

However, the BOC’s January to September revenue collection of P660.4 billion was 3.43% higher than the P638.5 billion collected year-on-year.

The Customs also exceeded its nine-month goal of P644.2 billion by 2.52% and achieved 76% of its full-year target.

“Income collected and generated by the Bureau of the Treasury was recorded at P7.9 billion, 8.79% better compared to the previous year’s level,” the Treasury said, adding that growth for the period was largely due to higher interest earnings on national government deposits and shares from PAGCOR income. 

“This drove the BTr’s January to September 2023 collections to P158.0 billion, marking a 21.84% year-on-year increase and a 194.37% or P104.4 billion overachievement of the P53.7 billion program for the period,” it said.

“Moreover, the year-to-date performance has already exceeded the P58.3 billion full-year program by 171.10% (P99.7 billion) attributed to higher receipts from dividend remittances, interest income from BTr’s managed funds, and NG share from PAGCOR (Philippine Amusement and Gaming Corporation) and MIAA (Manila International Airport Authority) profit,” it added.

Other non-tax collections in September, including privatization proceeds and fees, slipped by 47.34% to P14.0 billion. 

“The downturn was due to the base effect of last year’s one-off inflows from the return of the P7.3 billion in unutilized funds of the Unconditional Cash Transfer Program and the P2.6 billion PCSO (Philippine Charity Sweepstakes Office) mandatory contribution to the Universal Health Care Program,” the BTr said.

“The resulting year-to-date revenue slightly decreased to P138.5 billion from the previous year’s outturn but outpaced both the January-September and full-year programs by P32.0 billion and P5.7 billion, respectively,” it added.

Expenditures

State spending stood at P506.3 billion in September 2023, up 8.06% from the P468.6 billion recorded for the same period in 2022. 

“This was mainly attributed to the implementation of banner social protection and health programs of the Department of Social Welfare and Development and the Department of Health, respectively, as well as capital outlay projects of the Department of Public Works and Highways,” the Treasury said.

The third quarter disbursements, moreover, reached P1.409 trillion, up 11.12% year-on-year and exceeding the program for the period by 10.13% or P129.6 billion, largely on account of the continued acceleration of infrastructure expenditures.

Year-to-date government disbursements totaled P3.821 trillion, up 4.12% from a year ago. 

“The robust disbursement performance for the third quarter helped trim down government underspending to P40.9 billion or 1.06% of the program for the first nine months of the year,” the BTr said.

“This compares to the P170.5 billion underspending recorded during the first semester, representing 6.60% of the program for the period,” it added. —VBL, GMA Integrated News