Budget deficit shrank 26% to P83B in Q1

The budget deficit narrowed by a fourth to P83 billion at the end of the first quarter as double-digit revenue growth outpaced the increase in government spending on public goods and services from January to March.

The latest Bureau of the Treasury data released yesterday showed that while first-quarter expenditures of P615.4 billion exceeded the P532.4 billion in combined tax and non-tax revenues, the deficit was 26-percent lower than the P112.5 billion posted during the first quarter of 2016.

At end-March, disbursements grew only 4 percent from P591.5 billion a year ago. To compare, government spending jumped 17 percent year-on-year in the first quarter of last year as the Aquino administration ramped up expenditures ahead of the 2016 national elections in May.

The Department of Budget and Management had said in a recent report that “the growth of disbursements for the first few months of 2017 will be moderate partly due to base effect considering the high disbursements recorded for the same period in 2016 and since most line agencies are still in the process of obligating their allotments at the earlier part of the year.”

According to the DBM, spending was expected to rack up in the succeeding months toward the summer season.

On the other hand, revenue collections during the January-to-March period jumped 11 percent from P479 billion last year. In contrast, tax and non-tax revenues in the first three months of 2016 increased by only 2 percent.

During the month of March alone, the budget deficit of P61.5 billion was also narrower than a year ago’s P74.4 billion. Expenditures in March rose 4 percent to P241.7 billion from P232.2 billion a year ago, while revenues climbed by a faster 14 percent to P180.2 billion from P157.8 billion last year.

In a statement, the Treasury noted the strong collections growth posted by the country’s two biggest tax agencies—the bureaus of Internal Revenue (BIR) and of Customs (BOC).

“The BIR achieved double-digit growth for the third consecutive month with March collection amounting P117.4 billion, from which P204 million in tax refunds paid to claimants resulted in final collections of P117.1 billion, still up 11 percent over last year’s level. This resulted in a P370.4-billion collection for the first quarter—a 12-percent or P40.2-billion increment from the first quarter of 2016,” the Treasury said.

The BOC’s collections for March was also up 15 percent year-on-year to P37.3 billion, net of the P803 million in tax refunds, and was the third consecutive month of double-digit growth for the BOC, the Treasury added.

For this year, the budget deficit is targeted to reach P478.1 billion.