Higher tax collections trimmed deficit in Aug.

MANILA, Philippines–A higher budget surplus of P29.9 billion was posted in August, which helped slash the deficit to P25.9 billion during the first eight months, the Department of Finance (DOF) reported on Thursday.

The narrower deficit came as a result of higher tax collections last month, Finance Secretary Cesar V. Purisima said in a statement.

The DOF said August’s fiscal surplus was 36 percent higher than the surplus of P21.9 billion recorded in the same month last year. The end-August deficit, meanwhile, was 69 percent lower than the P82.6 billion posted in the same eight-month period of 2013.

Also, more revenues were collected in August, with the bureaus of Customs (BOC), Internal Revenue (BIR) and Treasury (BTr), as well as other offices, generating a combined P170 billion.

Collections of the BOC last month amounted to P29.1 billion (up 11 percent year-on-year), while the BIR collected P127.6 billion (up 8 percent). The non-tax income of the BTr, meanwhile, jumped 54 percent year-on-year to P5.3 billion “due to higher investment income and better dividend collections,” according to the DOF.

Expenditures in August rose by a slower pace of 5 percent to P140.1 million from P133.2 million last year. This, even as interest payments grew by 13 percent year-on-year to P20.6 billion “due to higher domestic payments, which offset the contraction in external interest payments,” the Finance department said.

At the end of August, total revenues hit P1.27 trillion—12 percent higher than the P1.139 trillion collected in the same eight-month period last year. From January to August, the BOC’s revenue reached P232.9 billion (up 17 percent year-on-year) while that of the BIR hit P890.7 billion (up 10 percent). The eight-month income of the BTr grew by a faster rate of 24 percent year-on-year to P75.7 million.

Total expenditures during the first eight months, however, continued to outpace growth in revenues. As of end-August, the government spent P1.296 trillion—6 percent more than last year’s P1.222 trillion.

Still, “improved revenue collection and proactive liability management continues to allow us to service debt obligations efficiently,” the DOF said, citing that, as of end-August, interest payments were below the program for the eight-month period at P228.6 billion.

According to the DOF, interest payments’ share to revenues during the January-August period went down to 18 percent from 20.1 percent last year. Interest payments, as a percentage of expenditures, likewise dropped to 17.6 percent in August from 18.7 percent in 2013, “indicating greater capacity to service debt and fiscal space for more productive spending.”