THE NATIONAL GOVERNMENT (NG) budget deficit narrowed in May as revenues grew in double digits and spending fell at the height of the election period, the Bureau of the Treasury (BTr) reported on Thursday.
In a statement, BTr said the budget gap fell by 26.72% to P146.8 billion in May, from P200.3 billion in the same period last year.
Month on month, the financial balance of maize fluctuated to a deficit from April’s profit of P4.9 billion.
Total revenue increased by 18.91% to P304.9 billion in May, from P256.4 billion in the same period last year. This was driven by a 21.8% increase in tax revenue to P285.6 billion, but this was offset by a 12.24% decrease in non-tax revenue to P19.4 billion.
Tax revenues were driven by double-digit growth in collections from the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC). BOB collected P216.6 billion, an increase of 17.91% year-on-year, while BoC collected P66.3 billion, an increase of 36.35%.
BTr’s revenue decreased by 28.22% to P8.9 billion due to lower dividend transfers, while collections from other o.ffices increased by 8.35% to P10.4 billion.
Security Bank Corp. Chief Economist Robert Dan J. Roces attributed the higher revenues to increased economic activity as the restrictions remained at the most lenient level.
“Attribution may be through increased revenues with looser alarm levels that help the economic reopening, allowing the government to achieve better tax collection … There is also the weaker pesos factor that is channeled through import duties,” he said via email .
The peso closed at P54.70 against the US dollar on Thursday, the lowest since November 21, 2005.
Nicholas Antonio T. Mapa, senior economist in the Manila branch of the Dutch bank ING Bank NV, said the customs collections may have received a boost from the more expensive fuel imports.
At the same time, public spending fell 1.1% year-on-year to P451.7 billion in May, when a ban on public construction projects was in place until May 8, or a day before the May 9 national election.
Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said the decline in spending was expected as this is usually seen in the election months.
“It should serve as a warning shot for the Q2 GDP report, which we believe will be quite markedly tarnished.fiboldly by the natural pause in public spending in periods of political transition, ”said Mr. Chance.
Primary expenses, or expenses less interest payments, fell by 2.32% to P417.9 billion in May.
Interest payments for May increased by 16.93% to P33.8 billion.
Meanwhile, the year-to-date budget is theyficit fell by 18.99% to P458.7 billion as revenue growth exceeded spending.
Total revenue increased by 15.46% to P1.43 trillion in the first five months of 2022, while expenditure increased by 4.69% to P1.9 trillion.
The majority of the revenue came from tax collections, which grew by 14.15% to P1.28 trillion. BOB collections increased by 9.92% to P959 billion, while BoC collections increased by 28.42% to P320.5 billion.
Nontax revenue, on the other hand, increased by 28.32% to P147.6 billion thanks to a 37% increase in BTr revenue to P83.4 billion.
“Admittedly, the strong revenue figures this year to date are an encouraging sign of the economic recovery, although I would be wary of praising any significant increase in indirect taxes in the currentflationic environment, ”said Mr. Chance.
INflning was 5.4% in May, the highest in three and a half years, exceeding the Philippine central bank’s target range of 2-4%.
Primary expenditure amounted to P1.67 trillion in fifive months to May, an increase of 2.64% year-on-year. Interest payments increased by 23.43% to P220 billion.
“For the period January-May, interest payments accounted for 15.34% of revenue and 11.63% of expenditure, up from last year’s 14.35% and 9.86%, respectively,” BTr said.
The government expects the budget deficit to hit P1.65 trillion this year, slightly lower than the actual deficit of P1.67 trillion in 2021.
“Going forward, the future administration must continue to push on increased revenue to bring thoseficit within the program of P1.6 trillion for the year, ”said Mr. Map. “Improved revenue collection will be crucial all the more given [President-elect Marcos’] Directive on spending and boosting the economy. “
Pr fi1st quarter, they budgetficit as a share of gross domestic product (GDP) was 6.4%.
The government aims to reduce the deficit to 7.6% of GDP this year and further to 6.1% in 2023, 5.1% in 2024 and 4.1% in 2025. – Diego Gabriel C. Robles