By Aubrey Rose A. Inosante, A reporter
The National Government’s (NG) financial position rose to surplus in October, driven by a 23% jump in profits, the Bureau of the Treasury (BTr) said on Wednesday.
NG posted a budget of more than P6.3-billion in October, a change from P34.4-deficit billion of in the same month a last year.
This was the first surplus since the P42.7 billion surplus in April.
Month-on-month, the budget balance shifted to a surplus from a deficit of P273.2 billion in September.
Data from BTr showed government revenue increased 22.63% to P473.1 billion in October from P385.8 billion a year ago, as tax revenue jumped 16.94% to P414.9 billion.
Total tax revenue from the Bureau of Internal Revenue (BIR), collected P325.5 billion in October, up 18.62% year-on-year.
“The double-digit growth in October can be attributed to higher collection of value-added tax (VAT), personal income tax (PIT), document stamp tax (DST), corporate income tax (CIT), excise duty on tobacco products, and taxes percent,” said BTr.
Bureau of Customs collections jumped 11.5% to P86.9 billion in October, while individual collectionsfSnow was flat at P2.4 billion.
On the other hand, nontax income also increased by 87.65% year-on-year to P58.3 billion in October. The Treasury’s income decreased by 13.5% to P14.5 billion, due to the “primary effect of the early issuance of dividends from state-owned and controlled companies last year.”
Collections from other offices increased by 206.72% to P43.7 billion.
Meanwhile, expenditures increased by 11.08% to P466.8 billion in October from P420.2 billion last year.
“This is mainly due to the high cost of personnel services due to the first phase of salary adjustments for qualified government employees and the release of the FY 2022 Performance-based Bonus of the Department of Education,” he said.
Spending also got a boost in the implementation of infrastructure projects of the Department of Public Works and Highways and foreign-aided rail projects of the Department of Transportation, as well as social security and health programs.
Interest payments decreased by 6% to P55.4 billion, while other expenses increased by 13.89% to P411.4 billion.
“The budget surplus (in October) could be attributed to the low level of budget utilization of several agencies due to various factors such as procurement and disbursal,” said John Paolo R. Rivera, senior researcher at the Philippine Institute for Development Studies, in a statement. Viber message.
FEE FOR 10 MONTHS
In the first 10 months, the budget deficit decreased to P963.9 billion from P1.02 trillion in 2023.
As of the end of October, the deficit represents only 64.94% of the P1.48-trillion deficit ceiling for the year.
Revenue collection jumped 16.83% to P3.77 trillion in the January to October period. This accounted for 88.2% of this year’s revised P4.27-trillion revenue plan.
Taxes, which make up 86% of total revenue, rose 11.4% to P3.23 trillion.
Revenue received by the BIR increased by 13.49% to P2.42 trillion at the end of October, making up 84.95% of the revised P2.85-trillion plan for the full year.
“The 10-month increase year-on-year is due to higher VAT, 12-month VAT was collected by changing the filing system from monthly to quarterly. Other sources of higher BIR collection are PIT, CIT, combined taxes on bank deposits and government securities, DST, and percentage taxes,” said the Treasury.
Tax collection increased by 5.32% to P777.6 billion, representing 82.75% of the revised P939.7-billion plan.
Nontax income, which accounts for 14.32% of total income, jumped 64.93% to P539.4 billion.
On the other hand, expenses increased by 11.52% to P4.73 trillion in the first 10 months from P4.24 trillion in the comparable period last year.
Interest payments increased by 23.03% to P638.7 billion from P519.1 billion last year.
“The better budget balance data for the month of October 2024 and the first 10 months of the year may be attributed to the rapid growth of recurring tax revenue especially from the BIR as the economy reopens,” Rizal Commercial Banking Corp. Chief Analyst. Michael. L. Ricafort said in a Viber message.
He said many businesses reported improved sales which led to higher tax collections.
“Moving forward, CREATE MORE (Corporate Recovery and Tax Incentives for Enterprises to Increase Opportunities for Economic Recovery) will lead to foresight. the collection of tax money,” he said.
But this could be solved by “increased foreign direct investment, more jobs, and increased business/economic activity in the country which would lead to continued tax revenue collection,” said Mr. Ricafort.
The Ministry of Finance said the effort to raise money in the first three funds has improved to 17.5% of the gross domestic product (GDP), slightly higher than 16.4% last year and exceeding the target of 16.1% for 2024.
The tax rate also increased to 14.91% in the first three quarters compared to 14.72% in 2023, and above the full-year target of 14.42%.
Cost efficiency rose to 22.6%, up from 22.13% last year and surpassing the full-year target of 21.72%.
“The fiscal deficit to GDP ratio stands at a manageable 5.14% of GDP in the first quarter of 2024. This is below the rate of 5.7% at the same time last year and well below the target of 5.6% in 2024,” said the Treasury.
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