Budget balance swings to P2.6-B surplus in May

MANILA, Philippines — The national government’s budget balance swung to a surplus in May, further narrowing the five-month deficit as the delayed implementation of this year’s appropriations took its toll on public expenditures.

The latest Bureau of the Treasury data released Tuesday showed that the government posted a P2.6-billion surplus last May, the third month this year that the amount of revenues collected exceeded spending on public goods and services.

May’s surplus reversed the P32.9-billion deficit recorded a year ago.

Tax and non-tax revenues in May reached P317.2 billion, up 22.5 percent year-on-year thanks to “improved collections by major revenue generating agencies,” the Treasury said.

The Bureau of Internal Revenue (BIR) saw its tax take last May jump 19.1 percent year-on-year to P204.8 billion, which the Treasury said was the fastest monthly growth rate registered by the country’s biggest tax-collection agency so far this year.

Collections of import duties and other taxes by the Bureau of Customs (BOC) rose 10.3 percent to P58.2 billion that month.

Non-tax revenues generated by the Treasury climbed 61.3 percent to P51.8 billion, which it attributed to “higher dividends on shares of stocks” that increased 89.5 percent year-on-year to P30.8 billion, of which P16.2 billion or over half came from the state-run Philippine Amusement and Gaming Corp. (Pagcor).

Meanwhile, disbursements in May reached P314.7 billion, up 7.8 percent year-on-year but falling below that month’s revenues.

The increase in expenditures last May was attributed by the Treasury to “the last tranche of salary increase of government personnel, release of midyear bonus, and the execution of new programs in line with the approval of the 2019 GAA [General Appropriations Act] in mid-April.”

Net of interest payments, primary expenditures grew by a faster 9 percent to P295 billion.

To recall, President Rodrigo Duterte signed the P3.7-trillion 2019 national budget only on April 15 or more than four months late as the two houses of Congress squabbled over “pork” funds, such that the government operated under reenacted 2018 appropriations at the start of the year and underspent about P1 billion a day.

During the January to May period, the budget deficit narrowed by 99.4 percent to only P809 million from P138.7 billion in the first five months of last year.

The Treasury said the narrower five-month cumulative deficit was “mainly caused by the delay in the approval of the 2019 budget.”

End-May expenditures declined 0.8 percent year-on-year to P1.315 trillion, while disbursements not including interest payments dropped by a faster 1.7 percent to P1.164 billion.

Due to underspending at the start of the year, gross domestic product (GDP) growth fell to a four-year low of 5.6 percent in the first quarter, below the government’s downgraded 6-7 percent full-year target range.

Total revenues as of May rose 10.7 percent to P1.313 trillion.

BIR and BOC’s end-May tax collections both rose 9.8 percent year-on-year to P908.5 billion and P251.7 billion, respectively.

The Treasury’s revenues from January to May reached P77 billion, up 31.9 percent and already surpassed the full-year goal of P73.9 billion.

For 2019, the government had programmed a budget-deficit ceiling of P624.4 billion—equivalent to 3.2 percent of GDP, in line with plans to roll-out more big-ticket infrastructure projects.

A budget deficit meant that the government intended to spend a bigger amount than the tax and non-tax revenues it had targeted to collect.