By means of Aubrey Rose A. Inosante, Reporter
The National Government’s (NG) fiscal position turned to surplus in October, driven by a 23% increase in revenues, the Bureau of the Treasury (BTr) said on Wednesday.
The NG posted a budget surplus of P6.3 billion in October, a turnaround from the P34.4billion deficit in the same month a years ago.
This was the first budget surplus since April’s P42.7 billion surplus.
Month after month, the budget balance changed to a surplus from September’s P273.2 billion deficit.
BTR data shows that government revenues rose 22.63% to P473.1 billion in October from P385.8 billion a year ago, while tax revenues rose 16.94% to P414.9 billion.
The bulk of tax revenue came from the Bureau of Internal Revenue (BIR), which collected $325.5 billion in October, up 18.62% year-on-year.
“The double-digit growth in October can be attributed to higher collections of Value Added Tax (VAT), Personal Income Tax (PIT), Documentary Stamp Tax (DST), Corporate Income Tax (CIT), Excise Duty on tobacco products, and percentage taxes,” BTR said.
Collections by the Bureau of Customs increased by 11.5% annually to €86.9 billion in October, while collections by other customs officesFThe ice remained flat at P2.4 billion.
On the other hand, non-tax revenues also rose 87.65% year-on-year to P58.3 billion in October. Treasury income fell 13.5% to P14.5 billion, due to “the base effect of early dividend payments by state-owned enterprises last year.”
Collections by other offices rose 206.72% to P43.7 billion.
Meanwhile, expenditures rose 11.08% to P466.8 billion in October from P420.2 billion a year ago.
“This was mainly attributed to higher expenditures on human resources services due to the first tranche of salary adjustments of qualified civilian government employees and the release of the Department of Education’s FY 2022 performance-based bonus,” the report said.
Spending was also boosted by the implementation of infrastructure projects of the Ministry of Public Works and Highways and foreign-supported railway projects of the Ministry of Transport, as well as social protection and health programs.
Interest payments fell 6% to P55.4 billion, while other expenses rose 13.89% to P411.4 billion.
“The budget surplus (in October) may stem from the low utilization of various agencies’ budgets due to various factors such as procurement and disbursement issues,” said John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies , in a Viber message.
SHORTAGE OF 10 MONTHS
In the first ten months, the budget deficit fell to P963.9 billion from P1.02 trillion in 2023.
As of end-October, the deficit represents only 64.94% of the P1.48 trillion deficit ceiling for the year.
Revenue receipts rose 16.83% to P3.77 trillion from January to October. This accounted for 88.2% of the revised P4.27 trillion revenue program for this year.
Taxes, which accounted for 86% of total revenues, rose 11.4% to P3.23 trillion.
Revenue generated by the BIR rose 13.49% to P2.42 trillion at the end of October, representing 84.95% of the revised full-year program of P2.85 trillion.
“The ten-month annual growth is due to the higher VAT. A total of twelve months of VAT has already been collected due to the change in the filing schedule from monthly to quarterly. The other sources of higher BIR collection are PIT, CIT, combined taxes on bank deposits and government securities, DST and percentage taxes,” the Ministry of Finance said.
Customs collections increased by 5.32% to 777.6 billion euros, representing 82.75% of the revised program of 939.7 billion euros.
Non-tax revenues, which accounted for 14.32% of total revenues, rose 64.93% to P539.4 billion.
On the other hand, expenditures rose 11.52% to P4.73 trillion in the first ten months, compared to P4.24 trillion in the comparable period last year.
Interest payments rose 23.03% to P638.7 billion from P519.1 billion a year ago.
“The better budget balance figures for the month of October 2024 and for the first ten months of the year can be attributed to faster growth in recurrent tax revenues, especially from the BIR, as the economy further opened up,” Rizal Commercial Banking Corp. . chief economist Michael. L. Ricafort said in a Viber message.
He said many businesses reported improved sales, resulting in higher tax revenues.
“Going forward, the CREATE MORE (Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Revitorating the Economy) would lead to a number of missed opportunities. tax revenue,” he said.
But this could be offset “by more foreign direct investment, more jobs and more business/economic activities in the country, which would result in more recurring tax revenues,” Mr Ricafort said.
The Treasury Department said revenue efforts for the first three quarters improved to 17.5% of gross domestic product (GDP), slightly higher than 16.4% a year ago and exceeding the 2024 target of 16.1%.
Tax efforts also rose to 14.91% in the first three quarters, up from 14.72% in 2023, and above the full-year target of 14.42%.
Spending rose to 22.6%, compared to 22.13% a year ago, exceeding the full-year target of 21.72%.
“The budget deficit-to-GDP ratio for the first three quarters of 2024 is a manageable 5.14% of GDP. This is down from the level of 5.7% in the same period last year and well below the 2024 target of 5.6%,” the Treasury said.