Budget gap narrows to P73.1 B

MANILA, Philippines - Solid economic growth and the government’s reluctance to spend more helped narrow the country’s budget deficit last year.

According to the Department of Finance, the country’s deficit narrowed by more than half to P73.1 billion in 2014 or well below the P266.2-billion target by the government.

Driven by higher tax revenues, the shortfall was 37.2 percent lower than the P164.1 billion recorded in 2013 and about a fifth the size of the record P314-billion deficit in 2010.

The deficit has declined in each of the past three years, thanks to liability management efforts of the Aquino administration which set the stage for sustained robust growth.

When measured against the size of the economy, the shortfall in the 12 months ended December last year equaled 0.6 percent of gross domestic product, lower than both the two-percent program and the 1.4 percent recorded the previous year.

The deficit in December 2014 fell 12 percent to P46.3 billion.

Government revenues amounted to P1.91 trillion in 2014, up 11 percent from 2013 with tax collections accounting for P1.72 trillion and non-tax sources contributing in P188.1 billion.

Full year revenue, however, was five percent short of the   government’s goal.

The Bureau of Internal Revenue and the Bureau of Customs sustained double digit growth, posting revenues of P1.33 trillion and P369.3 billion, respectively.

The BOC posted the biggest jump in collections among the government’s revenue generating agencies.  Revenues of the customs bureau grew 21 percent last year while BIR improved its collections by 10 percent.

The Bureau of the Treasury (BTr) contributed P93.4 billion to state coffers, 66 percent above the 2014 program and 15 percent more than the previous year’s figure.  This was attributed to the agency’s pro-active cash and investment management as reflected in investment and deposit income, as well as dividends on shares of stocks.

Other government offices pitched in P111 billion, down two percent year on year.

Finance Secretary Cesar Purisima said robust collections contributed to the improvement of the country’s tax to GDP ratio to 13.6 percent, putting the Philippines on a firm fiscal footing.