Budget deficit below target in Q1

The national government incurred a fiscal deficit of P162.2 billion in the first quarter, lower than the government’s program due to higher-than-expected revenue performance, the Department of Finance (DOF) said yesterday.

In a text message to Finance Secretary Carlos Dominguez, National Treasurer Rosalia De Leon said preliminary data showed the budget deficit in the first three months was recorded at P162.2 billion, nearly 27 percent lower than the P220 billion target.

However, this was almost two times wider than the P83 billion budget deficit recorded the same period in 2017.

The below-program deficit was attributed to the strong performance of revenue collecting agencies, such as the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).

“The BIR exceeded its target by P61.3 billion, while the BOC by P307 million. The overall deficit of P162.2 billion was P57.8 billion lower than the program,” De Leon said.

Based on computations, this means the BIR collected P416.14 billion in the first quarter, 17.28 percent higher than its P354.84 billion target. This is also 12.35 percent higher than the P370.4 billion generated by the agency last year.

The BOC, for its part, likely generated P133.54 billion, based on computations. This is likewise 28.28 percent up from P104.1 billion the same period last year.

Meanwhile, De Leon said disbursements in the first quarter surpassed the first quarter expenditure program of the government by P26.2 billion.

The Department of Budget and Management (DBM) has yet to release its quarterly fiscal program pending the approval of the Development Budget Coordination Committee (DBCC) today.

Economic managers earlier attributed the increase in revenue to the implementation of the Tax Reform For Acceleration and Inclusion (TRAIN) Act.

The law, which was impleOn mented starting Jan. 1, aims to simplify the country’s tax system by by lowering personal income tax rates.

It also seeks to adjust excise taxes of fuel, automobile, coal and sugar-sweetened beverages, and expand the tax base by removing value-added tax exemptions.

The administration’s massive infrastructure program, also contributed to the higher spending during the period, they said.

For 2018, government disbursements are targeted to reach P3.313 trillion, while revenues are programmed to increase to P2.789 trillion, resulting in a fiscal deficit of P523.7 billion, equivalent to three of the gross domestic product.