PHL posts P179.8-B budget deficit in September 2022

The National Government (NG) recorded a P179.8 billion budget deficit in September, slightly lower than the previous year’s level of P180.9 billion as revenue growth of 24.79% outperformed the 13.63% acceleration in expenditure.

This brought the cumulative fiscal deficit for the January-September period to P1.0 trillion, down by 11.09% (P126.3 billion) from the 2021 comparable outturn and 20.47% or P260.6 billion behind the year-to-date (YTD) goal of P1.3 trillion^[1] due to higher receipts and slower expenditure growth.

Revenue Performance

Total revenues rose to P288.8 billion in September, up by 24.79% or P57.4 billion year-over-year (YoY) as both tax revenues and non-tax collections posted positive growth for the month.

The resulting P2.7 trillion YTD figure which already accounted for 80% of the full-year program, similarly outstripped the previous year’s performance for the same period and the 2022 program by 18.79% (P420.3 billion) and 7.74% (P190.9 billion), respectively.

Tax collections made up P2.4 trillion (90%) of total revenues with the remaining 10% or P272.6 billion coming from non-tax sources.

The Bureau of Internal Revenue’s (BIR) collection for the reference month reached P173.6 billion after deducting the P877.0 million tax refund, showing a 12.58% or P19.4 billion growth over last year’s level.

The agency’s aggregate collection for the 9-month period amounting to P1.7 trillion likewise grew by 12.29% or almost P190.0 billion on a YTD basis and was 72% of the full-year target.

However, collection was still 1.99% (P35.2 billion) short of the P1.8 trillion YTD goal.

Likewise, collections by the Bureau of Customs (BOC) for September jumped 37.72% (P21.7 billion) to P79.3 billion (net of P56.0 million tax refund) from last year’s P57.6 billion.

This drove BOC’s cumulative uptake as of end-September to P638.5 billion, almost 36% (P168.6 billion) better than its performance for the equivalent period last year and P96.3 billion or 17.76% above the P542.2 billion YTD revenue target.

BOC has already achieved 88% of the full-year program of P721.5 billion.

For September, the Bureau of the Treasury (BTr) generated P7.3 billion in revenue, registering double-digit growth of 30.29% or P1.7 billion over the 2021 comparable collections.

The YoY improvement resulted mainly from higher NG share from PAGCOR profit, BTr managed funds and interest on NG deposits.

BTr’s cumulative income as of end-September increased to P129.7 billion from P105.5 billion a year ago and more than double the P58.6 billion programmed for the period.

Moreover, BTr YTD collections already exceeded the P61.2 billion original 2022 full-year program by P68.5 billion (112.0%).

Total collections from other offices (other non-tax including privatization proceeds and fees and charges) for the month amounted to P28.2 billion, more than twice the revenue recorded in September 2021.

The amount included the remittance of the P7.3 billion unutilized Unconditional Cash Transfer (UCT) Program funds by the DSWD and the PCSO’s P2.6 billion mandatory contribution to Universal Health Care (RA 11223).

Consequently, the January to September collections grew by 40.51% or P41.2 billion YoY to P142.9 billion and was 83.53% (P65.0 billion) higher than the YTD target of P77.8 billion.

Expenditures

NG expenditures grew by 13.63% (P56.2 billion) to P468.6 billion in September 2022 from the P412.4 billion posted in the comparable period last year.

This was driven mainly by higher capital expenditures, National Tax Allotment of LGUs, and Interest Payments (IP), alongside the subsidy releases to the PhilHealth for the National Health Insurance Program.

As of end-September, total expenditure has reached P3.7 trillion, outperforming the previous year’s level by 8.71% or P293.9 billion, but fell behind the nine-month program by 1.86% or P69.7 billion.

Nonetheless, this narrowed down from the 3.04% percent or P75.4 billion program gap during the first semester of this year, indicating the gradual catching-up of agency disbursements.

To date, the NG has already disbursed 74% of the P5.0 trillion full-year program.

Primary expenditures (net of interest payments) exhibited a 12.12% or P44.2 billion YoY increase for the month, reaching P408.7 billion.

The aggregate primary expenditures for the 9-month period of P3.3 trillion also went up by 7.68% from a year ago but was 1.74% or P 57.8 billion lower than the YTD program.

IP for the month increased by 25.16% (P12.0 billion) to P59.9 billion from the P47.9 billion registered a year ago.

To date, the total IP amounting to P400.0 billion also indicated a 17.87% or P60.6 billion increase from the Jan-Sep 2021 level but stood 2.88% lower than the P411.8 billion program as of end-Sept.

IP comprised 10.90% of total expenditures for the Jan-Sep period, up from 10.05% in 2021.

Meanwhile, IP as a percentage of total revenue decreased to 15.05% from 15.17% recorded last year.

Primary Surplus/ (Deficit)

Net of interest payments, NG’s primary deficit for the month reached P119.9 billion, contracting by 9.92% (P13.2 billion) on a YoY basis.

This narrowed the total primary deficit as of end-September to P612.8 billion, down by 23.38% or P187.0 billion from last year’s comparable figure and P248.8 billion (28.87%) less than the level programmed for the period.

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[1] Based on the approved Quarterly Fiscal Program by the DBCC during their 181^st meeting held on May 24, 2022.