Philippines: Budget deficit narrows to P124 billion in November

MANILA, Philippines — The country’s budget shortfall narrowed in November as the growth in revenues managed to outpace overall state spending during the month, according to the Department of Finance. DOF data showed that the deficit in November shrank by 3.7 percent to P123.9 billion from  P128.7 billion in the same period last year.

The budget shortfall is back to easing mode after a short hiccup in October when the deficit expanded again. Prior to this, the deficit had been declining for four straight months.

Still, the deficit means that the government is spending beyond what it earned from revenue collections, although at a much softer pace.

Similarly, the fiscal deficit from January to November of P1.235 trillion was 7.23 percent lower than the P1.332 trillion a year ago.

Data showed that total revenue collection for November improved by 17 percent to P331.1 billion compared to last year’s P284 billion, with the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR) both posting increases.

This effectively brought the 11-month revenue to P3.28 trillion, 18.13 percent higher than the P2.77 trillion in the same period last year. This already accounted for 99 percent of the full-year program of P3.3 trillion.

The bulk or 95 percent of the revenues were from tax collections at P313 billion – up 16 percent.

Non-tax collections also improved by 29 percent to P18.2 billion in November.

BIR’s haul grew by 12.5 percent to P237.1 billion while Customs saw its collection jump by 31 percent to P75.7 billion from P57.9 billion last year.

BIR’s year-to-date revenue also improved  by 13 percent to P2.16 trillion, reaching 90 percent of its P2.4 trillion full year program.

On the other hand, BoC’s January to November aggregate at P789.2 billion already breached its full-year target of P721.5 billion.

However, income generated by the Treasury for November slipped by 13 percent to P5.3 billion while collection from other offices including privatization proceeds and fees and charges for the month soared  by 61 percent to P12.9 billion.

Meanwhile, government spending in November went up by 10.2 percent to P455 billion from P412.7 billion in the comparative period.

Primary expenditures at P428.9 billion accounted for 94 percent of the total monthly spending while interest payments reached P26.1 billion, down 16 percent.

This brought the year-to-date spending to P4.51 trillion, 9.91 percent higher than last year’s P4.11 trillion.

To date, the national government has already disbursed 91 percent of the P5 trillion full-year program.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said disciplined government spending helped narrow the budget deficit, partly through the reopening of the economy as well as signals to cut unnecessary expenditures and leakages.

“One of the key fiscal reform measures is the rightsizing of the government to further reduce government expenditures,” he said.

“This is now part of the reform measures being prioritized by lawmakers and could be passed in the coming months of 2023, as a source of new leads on the country’s fiscal performance,” he added.