Revenues, spending top 1st half targets
STATE revenues and spending topped targets last semester, even as the deficit was 27% off program as revenue growth outstripped that of disbursements, the Treasury bureau reported on Monday ahead of President Rodrigo R. Duterte’s annual speech to Congress.
Cash operations data from the Bureau of the Treasury (BTr) showed the budget shortfall at P193 billion in the first half, 25% wider than the P154.5 billion in January-June last year but still more than a fourth short of the P264.3-billion program.
Revenues totaled P1.411 trillion, 20% more than the year-ago P1.176 trillion and eight percent higher than a P1.305-trillion goal.
Tax revenues accounted for P1.255 trillion of that amount, growing 17% from P1.069 trillion. The Bureau of Internal Revenue (BIR) raked in P964.5 billion, 14% more than the year-ago P848 billion, while the Bureau of Customs ( BoC) collected P279.4 billion, 33% more than P210.3 billion.
Both tax bureaus exceeded their respective P938.7 billion and P270.3 billion targets by 3%.
“The Bureau credits improved tax administration and the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) Law for the strong performance during the first half of the year,” the BTr said, referring to Republic Act No. 10963 that cut personal income tax rates and simplified estate and donors taxes, but reduced value-added tax exemptions and imposed more levies on tobacco, cars, minerals, sugar-sweetened beverages and other items.
Rizal Commercial Banking Corporation (RCBC) economist Michael L. Ricafort said that on top of the TRAIN law and campaigns against unpaid taxes, the depreciated peso and the higher world market price of fuel contributed to better revenues.
“Higher prices of imported crude oil among 3.5-year highs (up by about +50% year-on-year) and higher US dollar vs. the peso exchange rate among 12- year highs (up by at least five percent year-on-year) could also increase import value and taxable amount of imports, thereby supporting further growth in the revenue collections by the Bureau of Customs,” Mr. Ricafort said in an email.
Non-tax revenues accounted for P155.8 billion, 45% up from P107.5 billion a year ago and topped an P83.9-billionprogram by 86%. The BTr raised P66.1 billion of that amount, up 25% from P52.7 billion, and more than double a P31.5-billion program, “on account of higher dividend collections.” Other offices raised P89.7 billion, a 64% increase
from P54.7 billion and 71% past a P52.4-billion goal.
Disbursements grew 20% to P1.604 trillion in the first semester from P1.331 trillion a year ago, surpassing a P1.569-trillion spending goal by two percent.
Interest payments grew by nine percent to P165.5 billion from P151.6 billion, but fell four percent short of a P173- billion program by four percent.
Stripping out interest payments, spending grew by an even faster 22% to P1.438 trillion from P1.179 trillion, beating a P1.396trillion target by three percent.
Angelo B. Taningco, economist at Security Bank Corp., said in a separate e- mail that “government spending performance is relatively healthy since it has exceeded its targets for the first two quarters of the year.”
“It’s just that it was outperformed by government’s revenue collections, thus, resulting in a fiscal deficit that’s less- thanprogrammed.”
Mr. Taningco said that disbursements are likely to accelerate further this semester “because government disbursements is usually backloaded, and I expect the heaviest spending on personnel services, capital expenditures and maintenance expenditures to occur in the last quarter of the year.”
RCBC’s Mr. Ricafort said state spending “could also accelerate in coming months as part of the preparations for the May 2019 elections.”