PH gov’t ends 2023 with narrower fiscal gap —Treasury data

The Philippine government closed the year 2023 with a narrower fiscal balance shortfall as growth in state collections surpassed expenditures.

Data released by the Bureau of Treasury (BTr) on Thursday showed the national government incurred a budget deficit of P1.512 trillion last year.

Last year’s fiscal gap was narrower by 6.32% compared to 2022’s budget shortfall of P1.614 trillion.

However, the P1.512-trillion budget deficit in 2023 was wider by 0.85% than the P1.499-trillion ceiling.

As a percentage of gross domestic product (GDP), the fiscal gap stood at 6.2%, slightly higher than the 6.1% program, but lower than the 7.3% deficit-to-GDP ratio seen in 2022.

The Treasury said the lower year-on-year deficit-to-GDP level indicates “progress of fiscal consolidation.”

The BTr, moreover, attributed the narrower year-on-year budget deficit to the 7.86% growth in state revenues which surpassed the 3.42% growth in government spending.

Revenues

The national government’s total collections last year amounted to P3.824 trillion, up 7.86% from P3.545 trillion in 2022.

The Treasury said the growth in state revenues was “driven by improvements in both tax and non-tax revenue during the period.”

Total revenues last year also exceeded the target of P3.729 trillion by 2.55%.

Bulk or 89.68% of state collections were from taxes, which grew 6.49%, while non-tax revenues accounted for 10.32%.

Broken down, the Bureau of Internal Revenue (BIR) collected P2.517 trillion in 2023, up 7.76% from P2.336 trillion in 2022.

The BIR, however, failed to meet its collection target of P2.639 trillion by 4.63% “due to the shift in the schedule of the value-added tax returns remittance” from monthly to quarterly.

The Bureau of Customs (BOC), meanwhile, saw its collections grow by 2.41% to P883.2 billion from P862.4 billion in 2022.

The BOC also surpassed its P874.2-billion collection target last year by 1.04%.

“The BOC’s strong performance may be attributed to its enhanced revenue collection efforts, intensified anti-smuggling measures as well as digitalization projects for trade facilitation,” the BTr said.

The Treasury collected P227.6 billion, up 47.09% from P154.8 billion in 2022.

The BTr, likewise, exceeded its P58.3-billion target “on account of higher remittances from GOCCs, income from investments, and interest on national government deposits, as well as national government share in PAGCOR profit.”

Revenues from other offices such as privatization proceeds, fees, and other charges slipped by 1.91% to P167.2 billion in 2023 on the back of the “base effect” of one-off remittances in 2022, particularly “higher collections in 2022 from the BCDA’s remittance of AFP share from the disposition of assets, DFA’s collections and DSWD remittance of unutilized balance from the Unconditional Cash Transfer Program.”

Expenditures

The national government’s full-year disbursements last year totaled P5.336 trillion, up 3.42% from the P5.159-billion spent in 2022 and 2.06% above the P5.228-trillion program.

Primary expenditures accounted for 88.23% of the total disbursements, amounting to P4.708 trillion. This was higher than the P4.657 trillion disbursed in 2022.

“Productive expenditures, particularly infrastructure and other capital outlays, as well as personnel services expenses, helped buoy government disbursements in 2023,” the Treasury said.

Interest payments, meanwhile, stood at P628.3 billion, up 24.95% year-on-year “caused by the tightening of global funding conditions and impact of higher borrowing to provide stimulus during the pandemic.” —LDF, GMA Integrated News