The Duterte administration’s revenue collection has outstripped expenditures last August owing to prudent spending and strong tax payments, the Department of Finance (DOF) announced today.
Based on the Bureau of the Treasury report submitted to Finance Secretary Carlos Dominguez III, the national government doubled its budget surplus in August this year to P32.6 billion from P15 billon in the same month last year.
The surplus in August, the first under the Duterte administration, dragged down the eight-month fiscal gap to P138.4 billion, leaving the government ample fiscal room to support growth for the remainder of the year.
The end-August budget deficit is also well within the P388.87 billion ceiling for the year, but significantly higher compared to P3.4 billion gap incurred in the same period in 2015.
During the month, government revenues reached P209.6 billion, up by 19 percent from P176.7 billion in the previous year.
Of that amount, the Bureau of Internal Revenue (BIR) contributed P157.5 billion to the state coffers, while the Bureau of Customs (BOC) generated P33.1 billion in revenues.
Both the BIR and BOC, accounting for a combined 90 percent of government revenues, raised their tax take during the month by double-digits, or 14 percent and 23 percent, respectively.
Likewise, non-tax revenues from other government agencies posted a hefty jump of 75 percent to P12 billion from P6.9 billion, while the Treasury’s income doubled from last year’s P2.7 billion to P5.8 billion.
Cumulatively, total government revenues amounted to P1.481 trillion at end-August 2016, a 3 percent improvement from P1.441 trillion a year ago. The slower growth pace was a result of the one-time transfer of Coconut Levy assets worth P60.1 billion in May last year.
Netting-out the non-recurring Coconut Levy assets, the treasury data revealed that government revenues improved by 7 percent year-on-year in the first eight month of 2016.
In August, the government posted a 9 percent growth in expenditure to P177 billion from P161.6 billion in the same month last year.
The government’s level of spending is a closely watched driver of economic growth as it contributes about a tenth to gross domestic product (GDP).
Interest payments, which took up 13.2 percent of total spending, amounted to P23.4 billion in August, up 42 percent from last year’s P16.5 billion.
Netting out interest payments, the government was also able to revert to a primary surplus of P56 billion in August, following last month’s fall to a primary deficit. Likewise, the figure was higher by 78 percent year-on-year.
In January to August 2016, the government total spending stood at P1.619 trillion, up by 12 percent compared to P1.444 trillion a year ago.
Netting out interest payments, the government ended the first eight-month period with a P78.8 billion primary surplus, lower than P222.2-billion primary surfeit in the same period last year.
Dominguez earlier said the Duterte administration would be responsible with its finances as it reverses the underspending in the previous administration.
The new government has committed to raise public investments in infrastructure, human capital and social protection for vulnerable sectors, as part of President Duterte’s 10-point socioeconomic agenda to sustain high growth and make its benefits trickle down to all Filipinos.
But to help raise needed funds for public investments, the government is pursuing a comprehensive tax reform program to discourage evasion and avoidance, broaden the tax system’s narrow base and make the current system simpler and more equitable.
The DOF last month submitted to the House of Representatives the first package of its proposed Tax Reform Roadmap for Acceleration and Inclusion Act in keeping with the Duterte administration’s 10-point socioeconomic agenda.
