National Government Posts P33.5 Billion Deficit for Q1 2015

Revenue growth at a robust 18% as fiscal space continues expansion

The National Government’s budget balance was at a deficit of P33.5 billion for the first quarter (Q1) of 2015. This is 60% or P50.6 billion lower compared to the shortfall posted in Q1 2014, and 66% or P64.6 billion narrower than expected, owing in part to robust revenue growth at 18% year-on-year.

Surging collections in the Bureau of Internal Revenue (BIR), the Bureau of Customs (BOC), and the Bureau of the Treasury (BTr) have pushed performance to only 3% or P13.6 below program. Expenditures for the quarter picked up the pace, increasing 4% year-on-year.

Netting out interest payments, the government achieved a P67.1 billion primary surplus for Q1 2015, more than triple the P19.0 billion surplus recorded in Q1 2014.

Strong revenue performance continues uptrend

The national government raised P470.5 billion in Q1 2015, growing 18% or P72.1 billion year-on-year. The BIR hauled a total of P307.1 billion, higher by 16% compared to the same period last year. Meanwhile, the BOC raised P92.3 billion, higher by 7% year-on-year. BTr income leaped to P37.9 billion, more than double the P16.7 billion target. This figure is higher by 81% compared to Q1 2014.

Finance Secretary Cesar V. Purisima said, “I am pleased to note that the BIR notched consistent double digit year-on-year growth for each month of the quarter. Further, despite lower oil prices, BOC collections still managed to continue growing. The key is always to look at the overall trend lines—and for the recent years they have kept moving on up.

“Robust revenue growth drives the expansion of our fiscal space. This is a critical foundation of the virtuous cycle we are consolidating towards the last year of this administration. I am encouraged looking at the ever improving trend lines being posted by our revenue generating agencies. I expect the trend to curve up even more as we continue pursuing our legislative agenda on boosting tax administration capacity and modernizing the Bureau of Customs.

“Recently, the Department of Finance and the Department of Trade and Industry came up with a consolidated position on our proposed Tax Incentives Management and Transparency Act, a reform that will enable us to leverage tax incentives in a more efficient and transparent manner. Using data to inform public policy decisions is a long-awaited development in our bid for greater competitiveness.

“We continue to push the envelope in proactive liability management. I am also pleased to report that the Treasury rolled out its Non-Restricted Trading and Settlement initiative for Peso-denominated coupon bearing Government Securities (GS), enabling tax-exempt institutions to deal their securities and access investments from secondary market trades with the active taxable sector. I expect this initiative to promote liquidity in the market, as well as price discovery or transparency.”