Higher revenues in May shrink budget deficit to 132.9 B

The national government’s budget deficit narrowed in May this year on the back of higher revenue collections despite the double-digit growth in expenditures, data from the Bureau of the Treasury showed.

The Duterte administration incurred a R32.9 billion fiscal gap last month, down by 2.0-percent compared with R33.4 billion in the same month last year, the Treasury bureau reported yesterday on its website.

May’s budget deficit was also a reversal of the fiscal surplus registered in the previous month.

“The deficit is slightly lower than last year’s level by two percent as revenue growth narrowly exceeded the acceleration in government spending,” the Treasury said in a statement.

During the month, public spending increased by 12 percent to R292 billion from R261.7 billion in May last year. Of that amount, interest payments reached R21 billion, while “others” amounted to R270.8 billion.

“Foreign interest payments of R2.5 billion generated the uptick, mainly due to peso depreciation and an increase in rates for outstanding floating rate loans,” the Treasury said.

However, the bureau further said that the rise in interest payments was partially offset by lower domestic payments worth R18.6 billion owing to maturities of various fixed rate and retail bonds last year.

Revenues, meanwhile, amounted to R259 billion, an increase of 13 percent compared with R228.3 billion a year before. Tax collections stood at R227 billion, while non-taxes cornered R32 billion.

Of that total tax income, the Bureau of Internal Revenue (BIR) and the Bureau of Customs collected R172 billion and R52.7 billion, respectively.

Tax revenues from other offices, on the other hand, declined by 10 percent to R2.2 billion from R2.5 billion.

Non-tax revenues from the Treasury’s operations also jumped by 19 percent to R21.4 billion from R18 billion, while other offices generated R10.6 billion, up by 12 percent year-on-year from R9.5 billion.

At end-May, the national government posted a budget deficit of R138.7 billion, more than double compared with R63.6 billion in the same period last year, but lower than the ceiling by 32 percent.

According to the Treasury, the below ceiling budget deficit in the first five-months was “on account of higher revenue collections which exceeded the program by R81.5 billion or seven percent, outpacing the one percent or R15.2-billion increase in spending.”

In January to May, expenditures rose by 25 percent to R1.325 trillion, while revenues accelerated at a much slower pace at 19 percent to R1.186 trillion.

The BIR collected R1.067 trillion at end-May, while the Customs bureau generated R229.3 billion, and other offices raised R9.8 billion.

Non-tax revenues, including income from operations of the Treasury and other offices, reached R119.4 billion in January to May this year.

The government reverted to a primary deficit last month amounting to R11.8 billion, cutting the cumulative primary surplus to R2.7 billion, far lower than the R68.7 billion for the same period last year.