Govt budget deficit exceeds 2023 target
THE government incurred a budget deficit of P1.512 trillion last year, the Bureau of the Treasury reported on Thursday, exceeding the targeted P1.499 trillion even as revenue growth outpaced spending.
The result was also equivalent to 6.2 percent of gross domestic product (GDP), just over the programmed 6.1 percent. It was still lower than 7.3 percent recorded in 2022 when the shortfall was higher at P1.614 trillion.
“The narrower fiscal gap for the year was attributed to the 7.86 percent increase in revenue collection, surpassing the 3.42 percent growth in government spending,” the Treasury said in a statement.
Full-year revenues exceeded the P3.729-trillion target at P3.824 trillion and was driven primarily by an overperformance in nontax collections. It was also an improvement from 2022’s P3.545 trillion.
The bulk or P3.429 trillion of this comprised tax revenues, slightly below the P3.538-trillion target but higher than the previous year’s P3.22 trillion.
Nontax collections accounted for the balance. These were 21.41 percent higher year on year and almost 107 percent more than the 2023 target.
The Bureau of Internal Revenue collected a total of P2.517 trillion for the year but missed its P2.6-trillion target.
The Bureau of Customs, meanwhile, improved its take to P883.2 billion, surpassing a P874.2-billion goal.
Treasury income hit P227.6 billion, exceeding the P58.3-billion program, while collections from other offices amounted to P167.2 billion, also breaching the P132.8billion target for the year.
The 2023 revenue effort slipped to 15.7 percent from 16.1 percent in 2022 but was better than the 15.2-percent target. The tax effort also plunged to 14.1 percent from 14.6 percent and was below the 14.4-percent target.
Full-year spending, meanwhile, rose to P5.336 trillion from P5.16 trillion in 2022 and exceeded the P5.228 trillion programmed last year. It comprised 22.0 percent of GDP, above the implicit target of 21.3 percent but below the 23.4 percent achieved in 2022.
Interest payments totaled P628.3 billion last year, surging from 2022’s P502.9 billion and “caused by the tightening of global funding conditions and the impact of higher borrowing to provide stimulus during the pandemic.”
The full-year total was also above the programmed P610.7 billion.
Netting out interest payments from expenditures, the 2023 primary deficit was P883.8 billion, down from the previous year’s P1.111 trillion and below the P888.8-billion target.
Full-year interest payments as a share of expenditures grew to 11.8 percent from 9.8 percent a year ago and were slightly higher than the projected 11.7 percent. As a percentage of total revenue, interest payments were at par with the 16.4-percent implicit target but surpassed the 14.2 percent recorded in 2022.