Lower budget deficit reported in October

The Bureau of Treasury reported a much lower fiscal deficit incurred by the national government in October this year compared to that of the same month a year ago.

The BTr reported submitted to the Department of Finance on Friday said the government’s budget deficit dropped by 91% to 2.3 billion last October from P27 billion in the same month last year.

Finance Secretary Carlos Dominguez III, in a statement took note of the significant decrease in national government’s budget deficit last month as the government’s total revenues also increased up to seven percent in the same month, or P174.6 billion compared to P163 billion in October 2015.

Of the total increase last month, the Bureau of Internal Revenue (BIR) collected P121.9 billion or five percent growth in tax collection compared to P115.8 in October last year; while the Bureau of Customs (BOC) garnered P33.4 billion collection or a three percent increase in revenues last month compared to P32.5 billion collection in the same month in 2015.

The BTr added that tax collection of other offices, meanwhile, posted a 98 percent jump in October to P2.3 billion from P1.1 billion while non-tax revenues also improved by over a quarter to P17.1 billion from P13.6 billion a year ago.

Despite of the increases in collection this month, the BTr’s said its own income was down last month, or 13% decrease to P4.9 billion from P5.6 billion in the same month last year.

In a statement to the media late last week, National Treasurer Roberto Tan explained that the decline in Treasury’s revenue was due to lower income from government deposits with the Bangko Sentral ng Pilipinas (BSP) and lower dividends on share of stocks from state-owned and -controlled corporations.

Tan said the government’s expenditures in October amounted to P177 billion, down by 7 percent year-on-year from P190 billion.

But setting aside the P16.1 billion in interest payments, the national government recorded a primary surplus of P13.7 billion in October, a reversal of the P10.9 billion primary deficit in the same month last year.

In the first 10 months this year, the government’s budget deficit stood at P216 billion, up by more than threefold compared from P52.6 billion in the same period last year, but still well below the P388.87 billion ceiling for 2016.

Tan said that at end-October, total government revenues increased by 3 percent to P1.821 trillion from P1.768 trillion a year before, adding that government tax collection also improved by 8 percent to P1.629 trillion in the January to October period from P1.505 trillion in the same period last year.

Of that amount, the BIR contributed P1.293 trillion, while the BOC raised P321.3 billion.

BTr also reported that tax collection of other offices likewise jumped by 9 percent to P15 billion at end-October from P13.8 billion in the same month last year.

Revenues generated by the Treasury, meanwhile, declined by 6 percent during the period to P91.1 billion, while other offices’ tax collection suffered a 39 percent drop to a combined P100.7 billion, the BTr added.

“But netting out the one-off transfer of P62.5 billon in coconut levy assets in May last year, the government’s 10-month total non-tax and tax revenue collection growth reached 7 percent year-on-year,” the BTr continued in its report.

Government expenditures in January to October, on the other hand accelerated by 12 percent to P2.037 billion from P1.820 trillion in the same period last year.

BTr said netting out interest payments, the government ended the first 10-month period with a P49.8 billion primary surplus, lower than the P219.3-billion primary surfeit in the same period last year.

Meanwhile, the Development Budget Coordination Committee (DBCC) earlier raised the government’s budget deficit ceiling to 2.7 percent of gross domestic product (GDP) this year and to 3 percent next year.

DBCC said the deficit ceiling was raised to enable the government to spend big on infrastructure, human capital and social protection, as part of President Duterte’s 10-point socioeconomic agenda to sustain high and inclusive growth.