Gov’t set to exceed 2024 revenue target, collections up 15.2% in end-Nov. —Treasury

The Philippine government is on track to overshoot its revenue target for 2024 as collections so far as of end-November this year were already 96.12% of the full-year goal, the Bureau of the Treasury (BTr) said Thursday.

Treasury data showed that national government revenue from January to November 2024 stood at P4.1 trillion, about P200 billion shy of the P4.3-trillion target for the entire year.

Year-on-year, state collections grew by 15.16% from P3.56 trillion in the same period in 2023.

The Treasury said that taxes accounted for 86.47% or P3.5 trillion of the government’s revenue for the period.

Tax collections grew 11.51% year-on-year “as the main government collecting agencies all posted positive performance for the period.”

Collections from non-tax sources, likewise, increased by 45.6% to P555.3 billion, also accounting for 13.53% of the total state collections for the January to November 2024 period.

The government’s top revenue collector, the Bureau of Internal Revenue (BIR), saw its year-to-date collections rise by 13.88% to P2.667 trillion.

The BIR’s end-November 2024 revenue was also 93.64% of the taxman’s P2.8-trillion target for full-year 2024.

“The year-on-year positive growth in the BIR collections for November 2024 can be attributed to the double-digit rise in collections from income taxes, value-added tax (VAT), excise taxes, and documentary stamp tax (DST). The increase in income tax can be attributed to the influx of taxpayers filing for their third Quarterly Income Tax Return on or before November 15 of the current taxable year,” the Treasury said.

“The significant growth in VAT, a major contributor to the increase in the first eleven months of 2024 BIR collections, is due to the 12 months’ worth of VAT that was gathered from the change of filing schedule from monthly to quarterly. It is then followed by higher collections from personal income tax, particularly on withholding on wages, which can be attributed to the increase in the salaries of government employees and the favorable employment conditions,” the BTr said.

The Treasury added that other sources of higher BIR collection are corporate income tax, combined taxes on bank deposits and government securities, DST, and percentage taxes.

Meanwhile, the Bureau of Customs’ (BOC) total collections as of the end-November reached P850 billion, up 4.68% from the P812-billion collection in the same period in 2023.

The BOC’s year-to-date collections already accounted for 90.46% of its P939.7-billion target for 2024.

“The positive year-to-date growth can be primarily attributed to the higher year-on-year collections from import duties, VAT, and excise taxes as a result of a higher value of non-oil imports (net of rice), PHP/USD exchange rate, and value and volume of petroleum oil imports, among others,” the BTr said.

Non-tax revenues, on the other hand, grew 45.6% from P381.4 billion on the back of the Treasury’s year-to-date revenue of P232.7 billion “on account of higher interest on advances from GOCCs, guarantee fees, and the national government share from PAGCOR income.”

The Treasury said its January to November income already surpassed its full-year program of P187.0 billion for 2024 by 24.43.

Non-tax revenues from other offices, including privatization proceeds, fees and charges, and grants stood at P322.6 billion for the 11- month period, up 95.46% from P165 billion in 2023 and has already exceeded the P262.6-billion target for 2024 by 22.84%.

Expenditures

The Treasury also reported that the government’s expenditures for the 11-month period totaled P5.281 trillion, up 12.96% from P4.675 trillion in the same period last year which also reached 91.78% of the full-year target of P5.8 trillion.

The year-to-date primary expenditure, which excludes interest payments, amounted to P4.6 trillion, outpacing the previous year’s primary spending by 11.40%.

The BTr said the expansion in state spending can be attributed to higher capital expenditures for road and defense infrastructure projects, social protection and education related programs, as well as personnel services requirements. 

Meanwhile, total interest payments for the 11-month period reached P705.3 billion, up 24.25% year-on-year.

Budget balance

The resulting fiscal balance due to the P4.1-trillion revenue and P5.28-trillion expenditures was a budget deficit of P1.176 trillion.

The Treasury said the January to November fiscal gap “remains well within the target, representing 79.29% of the P1.5 trillion full-year program for the year.”

The 11-month period budget deficit was wider by 5.92% compared to the fiscal gap of P1.11 trillion in the same period in 2023.

In an emailed commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the “still relatively high prices/inflation” bloated the national government's various expenditures, thus the higher deficit during the period.

Ricafort added that higher interest rates and tighter monetary policy both in the globally and locally for the meantime as well as a weaker peso “would still lead to still higher debt servicing costs of the national government as seen in recent months, all of which would continue the budget deficits and fundamentally increase the outstanding national government debt.” — BM, GMA Integrated News