PH fiscal position swings to surplus in April 2024

The Philippine government's fiscal position swung to a surplus in April as state collections outgrew spending during the period, data released by the Bureau of the Treasury (BTr) on Thursday showed.

The budget surplus stood at P42.7 billion last month, from a deficit of P195.9 billion in March.

"The said budget surplus is expected due to the seasonal increase in the government's tax collection and filing for the month of April, a consistent pattern for many years/decades," Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an emailed commentary.

Year-on-year, the April fiscal glut was lower by 36.03% from P66.8 billion surplus recorded in the same month in 2023.

"The budget surplus is smaller compared to a year ago due to faster year-on-year growth in government expenditures compared to the growth in government revenues, partly due to higher prices/inflation, higher interest rates, and weaker peso exchange rate since 2022 that increased the government's debt servicing costs," Ricafort said.

Year-to-date fiscal position stood at a deficit of P229.9 billion, up 12.66% from P204.1 billion in January to April 2023.

A budget surplus occurs when the government spends less money than what it collects during a period, while a deficit means expenditures exceed collections.

Total government revenues in April reached P537.2 billion, up 21.90% from P440.7 billion while expenditures reached P494.5 billion, higher by 32.25% from P373.9 billion year-on-year.

BIR, BOC collections

Broken down, the Bureau of Internal Revenue (BIR) collections totaled P378.5 billion, up 12.65% from P336 billion in April last year.

The BIR's collection grew on the back of an "over-performance" in all major tax types compared to the same period in 2023 as both income tax and VAT posted double-digit growth as annual income tax filing, and first quarter 2024 VAT payments are due during the month.

The Bureau of Customs, likewise, collected P80.7 billion, up 19.52% year-on-year while the BTr saw its income rise to P64 billion, driven by the increase in dividend remittances as some Government- Owned and Controlled Corporations (GOCCs) already increased their remitted annual net earnings to 75% from the previously mandated 50% in compliance with the Department of Finance's directive.

Other non-tax collections, including privatization proceeds and fees, amounted to P11.4 billion, down from P17 billion a year earlier due to the timing of the one-off remittance of disposition proceeds from the Bases Conversion Development Authority (BCDA) last year.

Government expenditures in April, on the other hand, reached P494.5 billion, up 32.25% from P373.9 billion a year earlier.

"The expansion was driven by higher releases of the National Tax Allotment (NTA) and subsidies to GOCCs, including releases to PSALM pursuant to the Murang Kuryente Act, as well as the release of the fourth tranche of capitalization of the Coconut Farmers Industry Trust Fund (CFITF)," the Treasury said. — VDV, GMA Integrated News