January budget surplus narrowed to P23 billion

MANILA, Philippines — The national government’s budget surplus narrowed to P23 billion in January as spending on public goods and services climbed thanks to on-time budget approval.

The latest Bureau of the Treasury data released Friday showed that last January’s surplus was almost half of the P44.5 billion posted a year ago.

In 2019, the surplus ballooned as expenditures declined when the government spent reenacted 2018 appropriations after Congress failed to approve the 2019 national budget, while revenues continued to rise due to the second round of excise hikes under the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

In January, tax and non-tax revenues rose 14.8 percent year-on-year to P294.6 billion.

The Bureau of Internal Revenue’s (BIR) tax take increased 5.3 percent to P194.9 billion but fell below the P229.4-billion target for the month.

BIR gave Batangas taxpayers relief when Taal Volcano erupted in January.

Meanwhile, the Bureau of Customs (BOC) collected P55.9 billion in excise taxes and other duties, up 15.5 percent.

Non-tax revenues jumped 89.5 percent year-on-year to P40.8 billion on the back of the 195.5-percent hike in the Treasury’s income, which it attributed to “the P17.3-billion dividend remittance from the Bangko Sentral ng Pilipinas (BSP) and P1.4-billion increase in Bond Sinking Fund (BSF) investment income.”

Disbursements climbed 27.9 percent year-on-year to P271.6 billion as the Treasury pointed to “the timely release of the January 2020 internal revenue allotment (IRA) along with funds for the newly created Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), as well as payments for negotiated checks issued in the latter part of 2019.”

In 2019, local government units’ (LGUs) IRA for the month of January were released in February no thanks to delayed budget approval, the Treasury noted.

Net of interest payments, primary expenditures reached P210.2 billion, up 26.4 percent year-on-year.

Interest payments grew by a faster 33.8 percent to P61.4 billion “due to coupon payments for treasury bonds, discount on treasury bills, and the timing of payments for global bonds,” the Treasury said.

For global bonds, “[interest] payments due in February were made in January this year as the original schedule fell on a weekend (Feb. 1),” the Treasury explained.

So far, every month of January under the Duterte administration—from 2017 to 2020—recorded a budget surplus.

From P2.2 billion in 2017, the January surplus widened to P10.2 billion in 2018 during the first year of implementation of new or higher taxes slapped on consumption under the TRAIN Law.

For 2020, the Cabinet-level Development Budget Coordination Committee (DBCC) had programmed to end the year with a budget deficit of P671.2 billion, equivalent to 3.2 percent of GDP, as the government wanted to spend more, especially on infrastructure.

However, economic managers had said this year’s budget deficit may instead hit up to 3.6 percent of GDP due to projected foregone revenues of P91 billion as the COVID-19 outbreak slowed tourism receipts and trade.

The government targets to collect P3.5 trillion in revenues this year, exceeded by programmed spending of P4.2 billion.