First quarter budget deficit narrows as revenue collection grows
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MANILA, Philippines—Faster growth in the government’s revenue collections than in spending on public goods and services slightly narrowed the budget deficit to P316.8 billion during the first quarter of 2022.
The Bureau of the Treasury’s (BTr) latest cash operations report released on Wednesday (April 26) showed that the end-March fiscal deficit was 1.4-percent smaller than the P321.5 billion posted in 2021.
Three-month expenditures—amounting to P1.1 trillion—exceeded the total of P784.4 billion in tax and non-tax revenues, resulting in a deficit. But revenue collections jumped 12.6 percent from P696.5 billion during the first three months of 2022, outpacing the 8.2-percent increase in disbursements from P1.02 trillion in 2021.
The rise in interest payments was also a faster 18.7 percent year-on-year to P149.3 billion than the 6.7-percent growth in primary expenditures — or what the government considers as productive spending — to P951.9 billion during the first three months.
From January to March, the Bureau of Internal Revenue’s (BIR) tax take reached P502.8 billion, up 7.1 percent year-on-year but below the P569.8-billion target for the period. The Bureau of Customs (BOC) not only surpassed its end-March goal but also grew its collections of import duties and other taxes by 26.4 percent to P188.6 billion.
Last March alone, the budget deficit also narrowed by 1.9 percent year-on-year to P187.7 billion.
Expenditures in March climbed 18.1 percent year-on-year to P481.5 billion, of which productive spending—P426 billion—rose 18.4 percent.
The BTr attributed the increase in March spending to “higher national tax allocation (NTA) releases and budgetary support to GOCCs [government-owned and/or -controlled corporations] for the period.” The NTA refers to local government units’ (LGUs) bigger share in the national budget with the implementation of the Supreme Court’s Mandanas-Garcia ruling in full swing.
“Higher year-on-year disbursements by the Department of Education (DepEd) and the Commission on Higher Education (CHEd) mainly for their educational assistance/scholarship programs, and by the Department of Public Works and Highways (DPWH) and the Department of National Defense (DND) for their capital outlay projects also contributed to the said expansion” in disbursements, the BTr added.
Revenue growth was stronger last March, at 35.9 percent year-on-year to P293.9 billion.
The BIR collected P170.4 billion that month, up 27.8 percent year-on-year as well as higher than its P157.4-billion target for March.
The government had programmed to end 2022 with a P1.65-trillion budget deficit, equivalent to 7.7 percent of gross domestic product.
Last year, the fiscal deficit hit a record P1.67 trillion, or 8.6 percent of GDP, as the government had to spend more to fight the prolonged COVID-19 pandemic.
