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Budget balance swings to surplus in August

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Tax payers catch up for the filing of Income tax return at Bureau of Internal Revenue main office in Quezon city last April (2017). -- Michael Varcas/PHILIPPINE STAR

By Melissa Luz T. Lopez, Senior Reporter

THE country’s budget balance swung to a surplus in August, clipping three straight months of deficit on the back of higher tax collections even as government spending maintained double-digit growth, Treasury data showed.

The fiscal gap stood at a P28.8-billion surplus last month, reversing the P50.5-billion deficit posted in July but was narrower than the P32.6-billion surplus seen a year ago, according to the Bureau of the Treasury.

The national government usually posts a seasonal surplus in August.

Revenues grew by a tenth to reach P230.4 billion, jumping from the P209.6 billion which the government collected in August last year. In particular, Customs collections surged by 16% to P38.3 billion. On the other hand, taxes raised by the Bureau of Internal Revenue (BIR) – the country’s main collection agency – reached P171.7 billion, 9% higher from P157.5 billion previously.

Duties collected by other government offices also soared by 63% to reach P2.4 billion, while other fees paid to the state inched up by 3% to hit P18.1 billion.

Despite the budget surplus, government spending still climbed to P201.6 billion, jumping by 14% from the P177 billion which was disbursed a year ago. This marked the fourth straight month when expenditures posted double-digit increases, the Treasury said in a statement.

In particular, interest payments grew by 12% year-on-year to P26.4 billion as the government settled foreign loans, including the early payment for its dues covering P2.4 billion worth of samurai bonds, the bureau said.

The August tally brought the year-to-date budget balance at a P176.2-billion shortfall, narrower than the P205-billion deficit logged as of end-July. Still, the fiscal gap is wider than the P138.4-billion deficit recorded during the first eight months of 2016.

Disbursements grew by a tenth during the period to reach P1.778 trillion, outpacing the 8% revenue growth that amounted to P1.601 trillion. BIR collections reached P1.456 trillion, 10% higher than the P1.325 trillion it raised during the same period last year.

Economic managers of President Rodrigo R. Duterte have said government spending will accelerate during the third quarter as more big-ticket infrastructure projects are rolled out as part of the administration’s “Build, Build, Build” plan.

The government is looking to spend P847.22 billion on public infrastructure projects which would account for 5.3% of the country’s gross domestic product this year. If realized, this is expected to push full-year growth to 6.5-7.5%.

Growth has averaged 6.45% between January-June, just a tad below target.

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