The National Government’s (NG) budget deficit widened to P213 billion in November, as revenue collections slowed and accelerated, Treasury data shows.
Data from the Bureau of the Treasury (BTr) showed the budget deficit more than doubled to P213 billion in November from P93.3 billion in the same month last year.
Month-on-month, this was a P6.3-billion surplus change in October.
In November, revenue collection decreased by 0.61% to P338.3 billion from P340.4 billion last year, due to a 70.7% drop in nontax revenue collection.
Nontax income fell to P15.9 billion in November from P54.3 billion a year ago which included the one-off issuance of P23.8-billion additional shares from the Bangko Sentral ng Pilipinas (BSP).
Revenue from the Treasury decreased by 80.86% year-on-year to P7.9 billion, while that from other offices decreased by 37.83% to P8 billion.
On the other hand, tax revenue increased by 12.7% to P322.4 billion in November from P286.1 billion in the same month last year.
Collections of the Bureau of Internal Revenue (BIR) increased by 17.77% year-on-year to P247.6 billion in November.
“The positive year-on-year growth in BIR collections for November 2024 can be attributed to the double-digit increase in collections from income taxes, value-added tax (VAT), excise tax, and document stamp duty (DST). The increase in income tax can be attributed to the influx for taxpayers who file their third Quarterly Income Tax Return on or before Nov. 15 of the current taxable year tax,” said BTr.
Bureau of Customs (BoC) collections fell 1.69% year-on-year to P72.4 billion in November, “driven by lower year-on-year collections of import and excise duties, but offset by higher VAT collections. “
Meanwhile, NG consumption jumped 27.13% to P551.3 billion in November from P433.6 billion last year.
“The significant increase can be attributed to the high cost of road and defense infrastructure projects, social protection and education-related programs, as well as the needs of personnel services,” said BTr.
The rapid spending in November was also due to higher National Tax Allotment shares for local government units (LGU), and the release of special shares from the national tax revenue.
Primary spending – which refers to total expenses minus interest payments – rose 25.85% to P484.6 billion year-on-year in November.
Interest payments increased by 37.29% to P66.7 billion in November from P48.5 billion in the same month in 2023.
MASSIVE FAILURE
Meanwhile, the budget deficit increased to P1.18 trillion in the January to November period from a deficit of P1.11 billion last year. This represents 79.29% of the P1.5-trillion full year deficit.
In the 11-month period, revenue collection increased by 15.16% to P4.11 trillion from P3.56 trillion last year.
“Nevertheless, the year-to-date collection of P4.11 trillion, representing 96.12% of the revised P4.3-trillion plan for the full year, made the total for the 11 months of last year by 15.16%,” it said. BTr.
Tax collections increased by 11.51% to P3.55 trillion at the end of November. The BIR’s revenue increased by 13.88% to P2.67 trillion, which already accounts for 93.64% of the revised P2.8-trillion plan.
BoC collections increased by 4.68% to P850 billion in the January to November period. This is equivalent to 90.46% of the annual goal of P939.7 billion.
“The positive year-to-date growth is due to higher year-on-year collections of import duties, VAT, and excise duties due to higher oil import (net of rice), PHP. /USD exchange rate, and the price and volume of petroleum oil purchases, among others,” said BTr.
On the other hand, nontax income increased by 45.6% to P555.3 billion as of the end of November.
The Department of Finance’s income increased by 7.57% to P232.7 billion due to “higher interest income from GOCCs (government and controlled corporations), guarantee payments, and NG share from PAGCOR (Philippine Amusement and Gaming Corp. ) does not come. “
“Furthermore, BTr’s annual revenue to date has already exceeded the revised full-year plan of P187 billion in 2024 by 24.43%,” the statement said.
Revenue from other offices increased 95.46% to P322.6 billion in the 11-month period, beating the revised full-year P262.6-billion plan by 22.84%.
In the January to November period, government spending jumped 12.96% to P5.28 trillion, accounting for 91.78% of the revised P5.8-trillion full-year spending plan.
Principal spending increased by 11.4% to P4.6 trillion, while interest payments grew by 24.25% to P705.3 billion.
Chief Economist Rizal Commercial Banking Corp. Michael L. Ricafort said the November budget shortfall is more indicative of the government’s rapid spending.
“This also reflected the increase in debt service/interest costs amid the increase in debt incurred since the COVID-19 (coronavirus disease of 2019)… interest on external debt and capital payments,” he said.
Mr. Ricafort also pointed out that the year-on-year decrease in Customs revenues in November is “partially due to the reduction in the tax rate on imported rice which has partially reduced government revenue.”
President Ferdinand R. Marcos, Jr. ordered the rice tax to be reduced to 15% from 35% previously, until 2028.
Customs Commissioner Bienvenido Y. Rubio earlier estimated about P16.34 billion in advance revenue for the second semester due to the lower rice tax.
“One step that can help reduce NG’s budget deficit and also reduce additional borrowing/total debt of NG would be to increase the remittance of profits and surplus to other GOCCs,” said Mr. Ricafort.
Mr. Ricafort said further rate cuts by the BSP and the US Federal Reserve will help reduce debt servicing costs and reduce the budget deficit.
“However, the continued budget deficit in recent months will still lead to more National Government borrowing and overall debt, thus requiring more taxation and other fiscal consolidation measures in an effort to reduce the NG-to-GDP debt ratio to below international levels. it reaches 60%,” he said.
Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, said that despite the BIR’s “aggressive” anti-trafficking efforts, the tax effort should increase.
“Nevertheless, tax efforts should be increased but the administration does not like rising taxes even though some taxes are effective and politically acceptable to the public such as ‘health taxes,’ taxes on alcohol, soda and highly processed foods, vape and hot cigarettes. products, cigarettes,” Mr. Sta. Ana said. – Aubrey Rose A. Inosante
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