Budget gap widens to P273 billion in 3 months

MANILA, Philippines —  The country’s budget shortfall slightly increased in the first quarter as the government continued to spend more than what it generated from revenues.

Data from the Bureau of the Treasury showed that the budget deficit inched up by 0.65 percent to P272.6 billion from January to March compared to last year’s P270.9 billion.

This developed even as the budget gap in March narrowed by seven percent to P195.9 billion from P210.3 billion.

The deficit in the first quarter still means that the government spent beyond what it generated from revenues, although at minimal percentage this time.

Data showed that total revenue collection in March increased by 11 percent to P287.9 billion from P258.7 billion in the same period last year, largely driven by the expansion in non-tax revenues.

The bulk or 78 percent of the revenues in March came from tax collections at P223.9 billion, down by 0.23 percent from a year ago.  Non-tax collections, however, surged by 87 percent to P64.1 billion in March.

The Bureau of Internal Revenue’s haul rose by three percent to P145.3 billion, while the Bureau of Customs saw its collection decline by seven percent to P74.9 billion from P80.3 billion year-on-year.

The Treasury said the slower outturn for the BOC was due to the fewer working days in the month due to holidays.

Further, income generated by the Treasury more than tripled to P49.1 billion, driven by higher dividend remittances, interest on advances from state-run corporations and government share from the income of the Philippine Amusement and Gaming Corp.

Collections from other offices including privatization proceeds and fees and charges for March slipped by 23 percent to P15 billion, which was attributed to last year’s one-off return of P5.7 billion in unutilized unconditional cash transfer program funds as well as lower Malampaya proceeds.

From January to March, the cumulative revenue collections grew by 14 percent to P933.7 billion, with both tax and non-tax revenues posting growth.

On the other hand, government spending in March went up by three percent to P483.8 billion.

Primary expenditures at P412.9 billion accounted for 85 percent of the total spending, also slightly up by 1.2 percent.

The Treasury explained that while higher disbursements were recorded in state agencies, it was weighed down by lower subsidies to state corporations, particularly the timing of release to the Power Sector Assets and Liabilities Management Corp. for the implementation of Murang Kuryente Act.

A total of P5 billion was released in March 2023, while the 2024 subsidy is expected only within the second quarter.

The Treasury also attributed this to lower transfers to local government units, specifically the special shares of LGUs in the proceeds of national taxes.

For one, the P15 billion coco levy fund transfer to the Coconut Farmers and Industry Trust Fund will only be released this month instead of March last year.

Apart from primary expenditures, the government increased its interest payments by 16.5 percent to P70.9 billion due to coupon payments for domestic securities and the downward adjustments to last year’s re-issued bonds.

For the first quarter, disbursements expanded by 11 percent to P1.21 trillion from P1.09 trillion as interest payments and primary spending both went up.